Going forward, the Company intends to hedge approximately 60% of its domestic fuel-price-related earnings exposure in every quarter on a rolling basis.
The instruments are designed to enhance the visibility and predictability of the Company’s future earnings. The program uses instruments that create a “costless collar” based upon both the U.S. Department of Energy’s weekly diesel fuel price index and NYMEX unleaded gasoline contracts.
The February purchase locked in a fuel price range of approximately $3.39 to $3.45 per gallon.
The following table states the approximate range of the collar and percentage of fuel-price-related earnings exposure:
|Average low end of range||$3.38||$3.36||$3.37||$3.34||$3.34||$3.36||$3.39|
|Average top end of range||$3.44||$3.42||$3.43||$3.40||$3.40||$3.42||$3.45|
|Approximate % locked in||60%||60%||60%||60%||60%||40%||20%|
For more information about WEX, please visit http://www.wexinc.com.