Good morning, everyone, and welcome to the Wright Express Corporation second quarter 2008 conference call. (Operator Instructions) Today’s call is being recorded. At this time, for opening remarks and introductions, I’d like to turn the call over to Steve Elder, Vice President of Investor Relations.

Good morning. With me today is our CEO, Mike Dubyak and our CFO, Melissa Smith. The financial results press release we issued early this morning is now posted in the Investor Relations section of our web site at wrightexpress.com. A copy of the release has also been submitted as an exhibit to an 8-K we filed with the SEC. We’ll be discussing a non-GAAP metric, specifically adjusted net income, during our call. Please see Exhibit 1, included in the press release for an explanation and reconciliation of adjusted net income to GAAP net income. As a reminder, adjusted net income excludes the amortization of purchased intangibles. I’d also like to remind you that we will discuss forward-looking statements under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those forward-looking statements as a result of various factors, including those discussed in our press release, most recent Form 10-K and other SEC filings. While we may update forward-looking statements in the future, we disclaim any obligation to do so. You should not rely on these forward-looking statements after today. With that, I’ll turn the call over to our CEO, Mike Dubyak.

Good morning, everyone, and thanks for joining us. This was a strong quarter for Wright Express. In a very difficult quarter for the economy, we met or exceeded our internal projections on every one of our key metrics. As a result, revenue for the second quarter exceeded our guidance by $6 million and adjusted net income exceeded the top-end of our guidance by $0.01 per share. Netting out the various moving parts, in determining earnings, the key factor leading to the upside this quarter was fuel price, which at $3.96 per gallon was nearly $0.40 higher than we forecast. Generally speaking, the higher fuel prices translate into a higher dollar value on payment processing transactions, which flows through our model in a positive way. We’re also seeing greater business interest in fleet card solutions, as price per gallon rises, resulting in an increase in new business coming on the books in our direct line of business. Of course the economy is a challenge. So first let’s talk about how economic conditions are affecting the core of our business: fuel purchasing by fleets. Here we look at three key things: First, how is our existing customer base performing in terms of the number of active vehicles and transaction volume; Second, how are we doing on attrition; that is, are we retaining the fleets and vehicles in the installed base; And third, what kind of growth are we generating on the front-end; that is the number of new vehicles and fleets we add to our base. In the first of these areas, transaction volume in the installed base, our metrics this quarter were inline with our forecast. Historically, transaction growth on our existing customer base has closely tracked overall growth in GDP. For about the past year and a half, activity in…

Good morning, everyone. We are pleased to report another strong quarter of earnings and continued revenue growth. Once again, our business demonstrated predictability while the broader economy remained clouded with uncertainty. All of our key business drivers came in as expected, with the exception of the price of fuel, which was significantly higher than the NYMEX curve predicted at the time we provided guidance. New sales drove our volume growth in Q2. Similar to last quarter, we observed a decline in fueling amongst existing customers. This decline was evident across all the diverse types of businesses we serve, from construction trades to state fleets, to pharmaceuticals to telecommunication companies. The diversity of our customer base also helps mitigate our losses on customer payments. While the credit environment is weaker than in 2007, customer behavior patterns are consistent with trends we’ve seen in the past. Losses came in as expected in Q2, reinforcing our confidence in the full-year guidance. Our diversification initiatives are starting to bear fruit, with approximately $4 million of revenue in Q2 relating to the TelaPoint and Pacific Pride acquisitions, and our telematics offering, WEXSMART. These initiatives were well timed to supplement our growth while adding to the overall predictability of our business model with reoccurring revenue streams. Looking at our results for the second quarter of 2008 in detail, total revenue increased 29% to $111.2 million from $86 million for the second quarter of 2007. Net loss to common shareholders on a GAAP basis was $24.4 million or $0.63 per share. This compares with net income of $16.4 million or $0.40 per diluted share for Q2, last year. The company’s adjusted net income for the second quarter of 2008 increased 17% from last year to $22.4 million or $0.57 per diluted share. This non-GAAP figure excludes an…

Our first question comes from the line of Tien-Tsin Huang - JP Morgan Chase.

Good morning. Great results. I’ll start with the losses. Losses were better than we expected. It sounds like you’ve got some visibility into losses, stated losses to the high end of your historical range, Melissa, for the year. What’s your confidence level there? What kind of visibility do you have going into the second half?

All I can say is, if we look at the trends they’ve been, again, consistent with what we’ve seen historically over obviously a broader period of time. Both the first quarter and the second quarter have come in really dead-on what we had anticipated and so that’s increased our level of confidence of our ability to predict this even in the market that we’re in right now. Overall, we’re feeling pretty good about the year coming in, again, the high-end of that 11 to 22 or slightly above that.

Can you remind us of the historical seasonality and charge-offs that you’ve seen or losses that you’ve seen in 3Q and 4Q?

Typically, we’ve seen some pretty dramatic swings. And you can see that even in Q2 compared to last year.

All right.

Q3 has traditionally been lower than Q4, and I’d say this year, we haven’t seen the same seasonality impact that we’ve seen in most years. There is definitely some volatility quarter-to-quarter; we’ve seen that since we’ve been public.

Got it. Then any update on your thinking on the fuel hedge, specifically with the timing and where the new hedge could get struck today?

We will do a hedge in the third quarter. I’m not going to comment on when exactly we’ll execute the hedge.

If we look at the hedge right now, as the prices in 2010 are around $3.60, that’s excluding diesel.

Got it. Given your negotiations on the discount and the hybrid pricing, is that going to require some change in the form of how you strike those hedges, for example, the 90%, which you typically hedge to?

We had anticipated, even in the hedges that we’ve purchased, that we would be moving more to these hybrid prices, and so, we’ve been factoring that into the amounts that we’ve purchased overtime.

As we’ve looked at this knowing the hybrid start to reduce, if you will, the amount of the needed hedge on a percentage or variable basis, we’ve also felt that we can take a little bit more volatility in our business model and accept a little more of that, so we’re actually reducing the percentage from 90% to 80% as we go forward; 2010 and beyond, as we get into 2010.

Got it, good to know. Then lastly, the share repurchases, the timing and appetite for repurchases under that new authorization given what you’re seeing in the M&A pipeline today?

We’re going to weigh each, as we look at how much and when the time purchases. We’ve said before we’re going to do it mostly out of our free cash flow as opposed to levering out; we’re looking at both avenues to determine what we think is the best use of cash giving the information we have right now.

Great. Thank you.

Our next question comes from the line of Anurag Rana - KeyBanc Capital Markets.

Good morning, everyone. Congratulations on a good quarter. I just wanted to get an update on the Citi portfolio, as to when do you expect that to roll out, as to which quarter next year?

As you know, we’ve talked about two portfolios with Citi. It looks like now because there’s three parties involved: us, the oil company and Citi, that has to do all the work to get this in place. As we get more visibility, it looks like we’re going to do one of the portfolios in the first half of next year, and the second one will be in the second half of next year. We might see some new business from the first portfolio by the end of this year, but the actual conversion will be in the first half of 2009.

Great. And as I look at the spread for the transaction processing revenue, it declined sequentially. The PHH portfolio was primarily the reason for that. As we look for next year, should we assume further decline in that rate, when the Citi portfolio comes in?

The Citi portfolio would be transaction processing, so it would be a part of transaction fee.

That’s what I was referring to, Melissa. The transaction processing, transaction sequentially went up from $11.6 million to $17 million, and I think there is some acquisition-related transactions there?

Yes. It wasn’t the PHH. It was the Pacific Pride that you were referring to.

Sorry about that.

Okay. Thanks.

So should we expect that spread to decline even more next year, when the Citi portfolio comes in?

We’ve said that it’s a much larger than the average, and so it will reduce the average fee and overall reduce our margin by roughly 1%.

Great. I know, Mike, you’ve said that you’re not going to comment on the acquisition, but could you just give us an idea as to how large this would have been?

No, I don’t think we want to comment.

Okay. Thank you.

Our next question comes from the line of Robert Napoli - Piper Jaffray.

Thank you. Good morning and congratulations on a good quarter. A question on the payment processing rate; with adding a variable pricing as you give an outlook, how much further decline would you expect on the payment processing rate? And if oil were to decline significantly from where we’re at, do you think you can recoup some of the reductions in the rate?

As we said, we’re increasing the number, so we’ll be going from approximately 30% that has the hybrid pricing and we’ll start to approach 60%. With the price of oil where it is today, we’ve seen declines in the first half of this year in the payment processing numbers, and that would be somewhat consistent going into the second half of this year, as well. If the price of oil goes down, quite frankly, the overall percentage together, in terms of the transaction as well as the variable piece, will go up because the transaction fee will be a higher percentage on a lower price of oil.

Okay, that makes sense. On the hedging, given that we’re positive on your stocks, I was rooting that you would put the hedge in right at the beginning of the quarter when oil was at $145. I don’t understand the intricacies and how difficult it would have been to do, and everybody was saying oil was going to $200 or whatever but it just seemed to me that with oil prices as high as they were, why wouldn’t you have put a hedge on as quickly as you could?

I think in hindsight, it’s easier to see what happened. We try to just say that we do the best we can within a quarter to try to time it properly, and sometimes you’re on the mark, sometimes you’re not. But that’s something that we just talk about internally and try to make a decision that’s best for the company. And clearly in hindsight it looks like we could have done something earlier in the quarter.

Okay. The MasterCard business was pretty strong and what is your outlook for that business? You’re still not generating like a heavy amount of income, and I know most of that is travel-related, and given we would have expected that to be somewhat softer given the economy, but the growth was nice to see. What is your outlook for that business? Why did it grow that strongly in a weak economy? And how meaningful can it become to the bottom line?

We’ve looked at growth in that channel; we’ve seen revenue growth pretty consistently, over 20%. And part of what we’ve been able to do is to find other avenues of spend. Mike’s talked quite a bit in the past of different markets that we’ve entered. We’ve also increased some of the existing relationships we’ve had with the travel providers to increase spend within their business. All those things have factored into our growth historically, and we look forward in seeing ability to continue to grow that portfolio.

Okay. The international business, it was nice to see the move into the international markets. The growth in that area, will you look for other platforms in other countries? Or is this the platform you want to build your base from, and are there other acquisitions? Are there a lot of other interesting acquisition opportunities or not?

We look at the FAL transaction as being our core international platform. So it has the ability to move around the globe, which may mean we’re hosting it in different parts of the world overtime, depending on the business we have in those parts of the world. But it was specifically built, in construction and architected, to take care of currency, taxes, language, metrics, and it’s been in different parts of the world in the past. We see this as our core processing system, as we look to do international processing for our oil partners around the globe. We don’t see a need for an acquisition for a processing system. If something enhances our abilities in the international market, we’ll look at it, but not on the processing side.

Have you had conversations with some of your current U.S. customers and working with them internationally in conjunction with making this acquisition?

Yes. And that’s why I was careful to say, some of these are three to four to five years out. There’s no doubt we’ve got great relationships in North America. They appreciate the value we drive with them and continue to drive. And, as you know, some of those people have upped on long-term contracts with us. We have also seen over the last two years, the major start to manage themselves on a global basis, where in the past they were geographically managed. So with all of that happening, and I think with our reputation in the world, we felt, we had to do something to get into this market and we’re doing it with this acquisition and we’ll build slowly as there’s opportunities to expand with the oil companies around the globe.

All right. Great. Thank you very much.

Our next question is from the line of Gregory Smith - Merrill Lynch & Co. Gregory Smith - Merrill Lynch & Co.: Nice quarter. Looking at the hedging more broadly, just given the volatility we’ve had and the fact that it seems like there’s a mismatch between contracts you’re negotiating and where the economics are today versus where your hedge is. It seems like you’re getting zero benefit in the stocks multiple for the hedging. Have you reconsidered lately the whole idea of hedging to begin with and maybe biting the bullet and buying your way out of the hedges? Is that something you’re even considering?

Our plan is to continue to do the hedge. As you know, I did talk about reducing it somewhat. And then I think we’ve also reduced it by doing some of these hybrid prices that effectively reduces the amount of the variability pricing that we have to hedge. But we’re still going to continue with our hedge policy. Gregory Smith - Merrill Lynch & Co.: But on the variable pricing, you view that as a net positive for you then?

There’s a piece of it that’s variable that we think that we need in order to cover the variable cost of operating interest expense and our credit exposure. So there’s a piece of it we want to keep that floats with the price of gas. That part is definitely intentional. Then, what we’re trying to do is fix the larger part, which is obviously not tied into fuel prices. Gregory Smith - Merrill Lynch & Co.: Yes, okay. Visa’s made some noise about moving interchange around based on fuel prices. It looks like it’s really just smoke and mirrors when you work through it. But has that had any direct impact on your pricing at all?

I don’t think there’s any one particular card issue or association that has any impact. I think just because of the high price of gas there has been pressure on the merchants with their margins that are somewhat tied to cents per gallon. I think it’s just been felt across the board and that’s why we’ve moved in some of these areas to put in more of our hybrid pricing with some of the majors. But I don’t think there’s any one association or whatever that’s having a direct impact. It’s just across the board. Gregory Smith - Merrill Lynch & Co.: I think you now have three new federal contracts. Were those all three competitive takeaways?

They were, yes. Gregory Smith - Merrill Lynch & Co.: Excellent. And lastly, you did mention, I think Melissa, you had a client moving from payment to transaction processing. Just wondered, what happened there and any other details you can provide on that?

I think we make it available to our partners to look at what’s best for them. And this partner, just for different reasons, decided they wanted to move to a transaction processing. They were already carrying the bad debt and responsible for their customers, so they just decided to take it all in-house and we’ll just move to a transaction processing relationship. Gregory Smith - Merrill Lynch & Co.: Okay. So it has less of an impact, if they hadn’t been responsible for anything on the bad debt side?

Yes.

That’s right. Gregory Smith - Merrill Lynch & Co.: Okay.

It is just going to move our metrics around more than anything. Gregory Smith - Merrill Lynch & Co.: Okay, perfect. Great, thank you.

Our next question comes from the line of Patrick Burton - Citigroup.

Hi, congratulations on the quarter. I’ll ask about Mike your early comments about fleet card solution interest up in the direct channel. Can you just maybe talk about in this environment the opportunity to gain more clients?

We’re somewhat limited by the people we have on the Street. We have coverage models and with the inside sales, what we do in terms of lead generation. But we’ve seen the leads increase, hits on our website increase, we’ve seen the close rates go up, significantly. We’ve seen application flow coming in from even what we’re doing with the ExxonMobil sales force, where we’re controlling that directly. From small fleets on private label that we have control over to our direct channel where we have control, we are seeing applications up; we’re seeing close rates up. So, all of that’s been very positive.

Thank you.

Our next question comes from the line of Marshall Jaffe - Henry H. Armstrong.

Can you just provide some color on what you’ve been doing to put a cap on the credit exposure in light of the environment and in light of the higher average transaction amount?

We’ve been pretty aggressively working our customer base. More aggressively than in the past and there’s a balance to make sure that you keep the relationship over the long haul. But we’ve been looking through and doing postmortems on every loss and based on that information we make tweaks to our overall credit policy, if we need to make tweaks to our credit adjudication model. We’ve tightened down the amount of credit that we’re giving out to individual customers and so it’s a little bit more restrictive than we’ve seen in the past. And overall, we’ve seen a drop in our approval rates as a result of, business is coming in, it’s not getting approved as fast as it would in the past. It’s a combination of a bunch of different factors.

One thing I was thinking about specifically is that given the higher tickets, you might reach a limit in for a month or in for many billing period and I wonder how you handle that specific issue?

There are hard credit lines, so if someone actually hits their credit exposure, they get shut-off at the pump. And that would happen too if someone doesn’t make a payment within a certain period of time; we actually shut it down; it’s about 50 days. There’s a whole host of controls that are automatically in place.

Okay. Even on an interim billing period basis?

Yes. If they’re fueling and are maxed out on a credit line, they’d be shut down at the tank. They wouldn’t be able to actually fill.

Let me just also mention though, from a customer satisfaction standpoint, they are notified a few days before that happens. So, they’re not caught by surprise with all their drivers sitting at a pump and can’t get authorization. One form or another, they at least know they’re bumping up and they’ve got to get more money into us.

Thanks very much.

Our next question comes from the line of Robert Dodd - Morgan Keegan.

Congratulations. Since you mentioned, you’re having such a lot of success right now, signing government contracts, more productivity in the sales force, and getting more applications and more close rates. How do you feel about your current head count levels and your current capabilities to support that increased level of activity, if your success keeps going? Are you going to have to staff-up or do you feel pretty good right now?

There is some level of staffing as we bring on more business, but it’s in a step function, but we’ve continued to drive productivity within the organization. Which shows when I think Melissa talked about, our head count was up 42 or whatever, but only 3 was in the core business outside of TelaPoint and Pacific Pride. Through productivity, through getting our fleets to use more of our online program, whether calling less into our Qs; just a host of things that we have done to improve productivity throughout the company. But there will be some step function of some needs for customer contacts as we do grow the portfolio.

The government contracts that we are anticipating coming on at the end of the year, and we’ll staff-up a little bit for that. It’s going to bring about 9 million fuel transactions and a couple of million service transactions annually, once it comes on. There’ll be a little bit of an increment to that, but it’s not significant.

Okay. Obviously in the heavy truck area you’ve had to do some investments in the product and the software platform. Is there anything you have to do to continue gaining share on the government side in terms of the additional functionality or different reporting or anything like that?

There are some basic requirements that they may have that are a little specific, but based on our online capabilities and what we can do, we’re satisfying that with our core large fleet product.

Okay, excellent. On moving back to the hedge, looking at where your guidance is for the fuel price for the back half of the year, it’s relatively close to what you saw in Q2. Your hedge range is relatively close to what we saw in Q2. Should we expect the realized loss to be roughly similar to the Q2 levels? Obviously, one of the things I have a little bit of difficulty predicting accurately. So any hints you can give about where it would be relative to that 13 million would be very helpful.

Clearly it’s going to depend on what happens within the market. So, all things being neutral, that would be true.

Okay. Got it. And then one final question. With the percentage of transactions that have a fixed fee as well as a variable component in the payment processing segment. Is that still about a third of transactions that have that, which you expected to go up?

Yes. I think we had said in the past, it was around 30%. I mentioned earlier that it’s going to be approaching with some of the new contracts we put in place with some of these merchants. By the end of this year, you’ll see it step-up to close to 60%.

Okay. Got it. Thank you.

Being as there are no further questions, I’d like to turn the call back to management for concluding remarks.

Thank you, Ryan, and thanks everyone else for listening. We look forward to speaking with you again next quarter. That concludes our call.

Ladies and gentlemen, that concludes our conference call. Thank you for joining us today.