Good morning, my name is Kela and I will be your conference operator today. At this time I would like to welcome everyone to the Wright Express second quarter 2012 financial results conference call. (Operator Instructions). Thank you. Mr. Elder you may begin your conference.

Good morning. With me today is our CEO, Mike Dubyak. The financial results press release we issued early this morning is posted in the Investor Relations section of our website at wrightexpress.com. A copy of the release has also been included in an exhibit, as an 8-K to the SEC this morning. As a reminder, we will be discussing a non-GAAP metric, specifically adjusted net income, during our call. For this year’s second quarter, adjusted net income excludes non-cash mark-to-market adjustments on our fuel price related derivative instruments and the amortization of acquired intangible assets as well as the related tax impacts, which includes impact from recently enacted tax legislation in Australia which I will discuss later. Please see Exhibit 1 included in the press release for an explanation and reconciliation of adjusted net income to GAAP net income. I would 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 obligations to do so. You should not place undue reliance on these forward-looking statements all of which speak only as of today. With that, I’ll turn the call over to Mike Dubyak.

Good morning everyone and thanks for joining us. Second quarter was a good quarter for Wright Express with both revenue and adjusted net income exceeding our expectations. Revenue in the second quarter increased 8% to $153 million, despite the decline in fuel prices and EPS on an A&I basis increased 10% to $1 per share versus prior year. Our three-prong strategy of expanding our Americas fleet business, diversifying our revenue streams and building out our international presence continues to serve as our platforms for growth. Highlights from the Americas fleet business included approximately 270,000 gross new cards added by our salesforce in the first half of 2012 and the signing of the State of Pennsylvania. This coupled with a record lower domestic fleet credit loss and continued low attrition rates yielded good performance in this arena despite economic headwinds. Our diversification efforts continue to be led by very strong performance from our corporate charge card product with spend volume increasing 49% over the prior-year period to $2.8 billion. We also announced our entering in to the healthcare vertical with the signing of PaySpan, one of the nation’s largest healthcare payments and reimbursement processors. On the international front, in May we acquired a CorporatePay, a leading provider of corporate prepaid virtual cards to the travel industry in the UK. OTA wins included the implementation of our first customer in the UK and the signing of Webjet, a leading OTA in Australia. On the fleet side, we announced an agreement to resell our fleet processing capabilities in South Africa. Moving on to the segments, in the second quarter we continue to focus on driving new business growth in our fleet business and achieved vehicle growth of 7% over the prior year. Consolidated payment processing transactions increased 1% over the prior year and…

Thank you Mike. For the second quarter of 2012, we reported total revenue of $153.1 million, an increase of $11.8 million or 8% from the prior year period and above the high end of our guidance range of $145 million to $150 million. This compares to our previously stated long-term revenue growth rate of 8% to 10%. The predominant driver of this performance was our corporate charge card product. Net income to common shareholders on a GAAP basis for the second quarter was $30.3 million or $0.78 per diluted share. Our non-GAAP adjusted net income increased to $39.1 million or $1 per diluted share, an increase of 10% from Q2 last year. The outperformance relative to our guidance was due primarily to lower credit losses. In terms of some key performance metrics for the second quarter, total fuel transactions increased 3% over the prior year. Payments processing transaction were up 1% in total while transaction processing transactions increased 8%, primarily driven by the addition of the BP contract in Australia. Each of these growth rates were in line with our expectations for the quarter. The net payment processing rate for Q2 2012 with 1.63% which was down one basis point versus Q2 2012 and to the first quarter of 2012. Finance fee revenue in the fleet segment was up $600,000 compared to Q2 last year. As a percentage of total dollars of fuel purchased, it was approximately 5% higher than last year and better than our expectations as we had conservatively anticipated late fees to move in line with credit losses. In the other payment segment, revenue for the second quarter increased 39% or $10.8 million year-over-year to $38.4 million and now represents 25% of our total revenue. Revenue growth in this segment was driven primarily by our corporate charge…

Thank you. (Operator Instructions) Your first question comes from the line of Robert Napoli with William Blair & Company.

May be to start off with PaySpan and may be a little bit of color on how you won that business and talking about the size of $35 billion to $40 billion I believe the PaySpan thinks that it’s somewhere around 20% on a run rate basis will be done on cards by the end of this year that’s almost $7 billion of volume and I know you guys are conservative, but it hasn’t even started, but can go wrong and how does the program work; is that 20% of $40 billion is more like $8 billion of potential volume for 2013?

I know you have done a little bit work on that your self; clearly this was a great win, because it puts us in a new vertical. It’s a vertical that we believe will continue to grow inspite of the economy or whatever just knowing the dynamics that’s going in the country and PaySpan is a large provider of services. They basically manage payments for insurance companies and third party administrators and they have to reconcile basically all the payments to make sure that ties that on both ends. They do that today through a non-card program, primarily checks. They look at our product as being I would say best-in-class and they will use that product initially to pay again on behalf of the insurance companies and the third party administrators to the medical providers. So that’s basically what they are going to initially; we think there are other strategies and opportunity we will pursue with them, but that’s where we are going to get started in the fourth quarter. There is no doubt, they can become a very large player for us; I would say that they and we would say if we are only doing $1 billion next year we would be disappointed, but don’t think we are in a position to say over and above that what that looks like and that’s why we said we would share more during the Q3 call. But they are very bullish; we are very bullish. The integration is not difficult; it’s very similar with what we do with the OTAs and a lot of the work is going to be their side, but they think they will have it up and running by the end of the third quarter and be ready to do transactions in the fourth quarter.

And then just in that segment, the OPS I mean the spend growth that you had 49% spend growth you know really not down much from the first quarter. Where is that still coming primarily from the two largest players and have you moved into new geographies because they are not growing that fast, but they are doing well, but not that well.

They are growing. And it is coming primarily from our online travel companies.

So you must be moving into new geographies because they are top line, their hotels’ growth is in 49%.

I think mostly it's just continued increased penetration and they are growing at pretty healthy rates. I would say the 49% does include the impact of CorporatePay in the quarter which was in the range of $100 million of spend as well, but as you would tell, I mean it is our biggest customers that are driving the majority of this growth.

And just last question on your core business, in the US and same-store sales being weak with this economy is not surprising, but your attrition rate sounded a little bit higher than it historically has been. I mean I think your head sales person is now running Europe. Have you lost any focus or I mean this company is growing rapidly in a lot of different directions. Do you have the internal executive level support that you need or are you thinner than you have been.

No I know that as you know, Melissa Smith is running the Americas. She has a very strong team that Dave Maxsimic has in place and had in place, that's still driving our core business. I don't think the attrition rate is indicative. A lot of that comes from also what's going on with our client service organization. It's slightly up over last year but not much, I mean anything under 5% all in, we think is pretty spectacular numbers. So we don't see any change there. I think that's also probably indicative of the economy being controlled. I think our customers, if we look at that aspect, we look at the ageing buckets, we look at bad debt, it also tells us even though the economy is sluggish at least businesses are managing their programs better. But on the attrition, we are very pleased with those numbers of 4.4% all in.

And any slight increase we did have came on the involuntary side, it wasn’t that customers choose to wave off.

Our mantra has always been on the voluntary to be under 3%, so it would be all in voluntary and involuntary at 4.4%, we feel is very strong.

Your next question comes from the line of Sanjay Sakhrani with KBW.

I know Bob kind of rattled about some numbers in terms of what the potential could be for you guys from PaySpan, but I was just wondering if you could just clarify that or at least kind of articulate how significant that ramp could be over a short period of time and obviously over a longer period of time it could be in the entire [pot]. That's question one. And then just question two on the fleet business, could you just maybe just talk about the M&A opportunity. I know you guys had some stuff in Africa, how significant is that opportunity and then you know what other stuff is out there. Thanks.

Okay. On PaySpan, the numbers we have are $35 billion in total spend in terms of what they are paying for the insurance companies, let's say to the medical providers. Right now we are addressing that with them, we are trying to work out what are the opportunities and clearly I think it's very clear their CEO is very bullish about it, but I think we have to sit down and really strategize this. It may even mean exploring some other products with them beyond the regular virtual card. We are in those discussions. I just don't think we are ready to say what that looks like long term. That's why at least I try to say to you if it's only $1 billion next year I think they would be disappointed and we would be disappointed, but I don't think we're ready to say what the numbers look like.

I think the other thing, Sanjay is we have included very, very little in this year's numbers essentially in the fourth quarter. So I think we called it out as a material, but you know we do expect some spend volume, but it is not going to be a tremendous amount this year.

And on the fleet side, OTI is really a partner. It's not an acquisition. So they are basically going to be providing their product to oil companies. They already have some in place. They provide contact with services for payments and they are going to use our backend to be their core processor for those fleet transactions and they will continue to look for other opportunities in the South African marketplace. So not quite an acquisition. We are pursuing and looking at acquisitions in the fleet business as well as some strategic alliances that we think could be very powerful as well, but not ready to talk much about those at this point.

Okay and just one final follow-up. In the online travel side, you guys had mentioned that you do have some conversions next year. Is there any shot that we could a little bit of an acceleration of those conversions and they could come into this year and how material could they be?

When you say conversions for example, are you talking like Webjet in Australia?

Yes some of the wins that you guys have?

Yeah the UK, well the UK one, the good news is, it's up and running. We always said, it wasn't very large. So it's not that material, but it still is going to add to our growth in the UK market. The Webjet, we hope to have transactions going through that this year and we think that has opportunities for us, more next year than this year and we are working aggressively on all of these. So I don't think we're standing still. You know some of this you have to stand up regulations which we did in the UK, make sure you have a BIN sponsor and have your processor in place which we do. So all that’s there, we are processing so that we can now say in the UK we are processing credit virtual cards and through CorporatePay we are processing prepaid virtual cards, but we are moving as aggressively as we can to stand these up and try to penetrate as aggressively as possible.

Thank you. Your next question comes from the line of Julio Quinteros with Goldman Sachs.

Hi, it’s (inaudible) and thanks for taking my questions. First thing on the international expansion opportunity, you had a number of key wins this quarter mostly on the virtual card, but your competitor has actually signed or announced a few acquisitions internationally. Just curious where you involved in some of those deals and I guess ultimately what led you to perhaps not pursue that more aggressively, was it just a matter of valuation or something more strategic than that?

Yeah, I would say that we are looking though our own strategic lens of what we think we have to do to make sure we are winning in our core markets, diversifying our business and looking at the international opportunities. I can’t say that we were involved in all the different ones. We don’t even know all the announcements except for the one in Brazil, but I do think they are very aggressive on the inorganic side. We are I think very strategic on the inorganic side. And I think we are going to find ourselves even being in different markets knowing the OTA markets and some of the other things we are doing in prepaid. So our lens is a little bit different than their lens. On the fleet side clearly, they are talking about some of their wins. I guess they will probably give you more color in the future, but again we are not pursuing it as aggressively maybe as they are in some of these areas. We are looking at some of the things that we think are very strategic to us and what we are looking to do on the fleet side.

Okay and then on PaySpan, what's the go-to-market strategy or I guess what drives the confidence in some of the numbers you are giving on, at least a million dollars next year, is this just a preliminary sense of conversations you've had with some of the PaySpan end customers or is this something like go-to-market strategy that boost your confidence there?

Yeah I think it is really working with them and understanding the value proposition and how the value proposition works and getting the confidence from them and their sales organization that the value proposition is something that people will sign up for and bring even greater reconciliation and accuracy in terms of booking the billings if you will in these different agencies or I should say insurance companies for them. So it is really them knowing their business, knowing our value proposition and how bullish they are saying, we really think this is going to be a real winner for us and differentiate them in the market place.

Okay and then lastly just on the same topic, when we try to I guess connect the dots from the potential volume opportunity to the revenue impact, should we assume similar to know interchange dynamics that we see currently today in your other payment business?

Yeah I mean this is a very large customer and so you know you would expect our net interchange rate to be in line with our other very large customers which it is. We will earn on a growth basis, the issuing bank rates that MasterCard accepts and you know we think this is a very big relationship that has the potential to be one of our top customers, absolutely.

Your next question comes from the line of Tom McCrohan with Janney.

A quick question on the trends in the fleet segment, can you give us any color on what the growth rate was in payment transactions for the month of June and for the month of July?

I would say that there was not, like any kind of sharp deceleration or acceleration in the growth rate. You know through July and I'm not sure I had yesterday’s data but the same store sales trends were pretty much in line with what we are seeing through the second quarter. So for that kind of second half of the year we are expecting pretty much more of the same. We are going to be low single digits and we are expecting our same store sales to be a bit of a headwind.

Okay the growth this quarter [1%] is a good run rate to go with as in decelerated if you look at the months?

No, it hasn't decelerated from their certainly.

And then to ask another question on PaySpan do the insurance carriers need to opt into this program to shift payments on to the credit card rails. Or is this something that you and PaySpan control without their input?

I think that they do have to work with the medical providers who they are paying on behalf of the insurance companies. So I think those people are already taking credit card transactions but it's not what PaySpan is doing with them today but they do accept credit cards for other payments. So there does has to be some opting in but they are very comfortable because they have been talking to customers so they are the ones I think right now telling us what they think the opportunities are because of the initial discussions they have had with some of their big customers if you will.

So does the medical provider need to opt in to or if they accept credit cards you can send them with any payment you like?

They still have to opt in.

They still have to opt in. And Mike obviously its going to generate fee income that didn’t otherwise exist before, you said there will be ACH system. So how would the split work, how would handle those fees be divided amongst new band and presumably the insurance carrier?

I can’t speak for what they will do with the insurance carriers or their customers. For us it will be similar to what we do with the OTAs, we get our merchant interchange and we will be rebating part of that back to them. So that will be typical for us. They will drive the other part of their pricing valuations if you will or pricing programs.

Your next question is from the line of Tim Willi with Wells Fargo.

Couple of questions, one is Steve on the housekeeping side. What was the revenue contribution of CorporatePay during the quarter? Or how should we think about that in terms of just the underlying organic growth rate?

The actual revenue contributions with over $1 million for a couple of months we own them. I think you can kind of comfortably put this in the $5 million to $10 million range in your annualized revenue. Much like our OTAs, they've a spike in the summer months when people travel more. So you will see a little bit more in the third quarter but you know, kind of it is $5 million to $10 million revenue business.

Okay, and then in terms of the guidance you mentioned slight dilution from this yield, is that mostly a one-time cost associated with closing on the transaction or is that because you said you starting to backed out, you got intangibles backed out of your adjusted guidance. So what will cause that dilution from this acquisition?

The company on a standalone basis before we bought it was a profitable business. So what's causing the dilution, I mean, part of it is one-time expenses including the small tax impact that we had in Q2 but mostly the integration expenses that we have plans for the company to grow business and so we’re going to throw some resources at it to integrate it in to our business.

Okay, two more questions, on M&A, and I think international, you talk, more so obviously Europe, etcetera but what is Asia as for a greater sort of Pacific [rim] look like, you know, the presence you have in Australia and with the software platform you bought several years ago. Are there active discussions on pipeline and APAC regions relatively to what you think about in Europe and elsewhere?

There is both active and then future opportunities. So we're pursuing some active opportunities in the Asia PAC market as we speak and a lot of those are through oil companies and then we're also looking at other opportunities in some of the more emerging markets which would be more long-term and is that an alliance in acquisition, you know, whatever, I can’t say at this point but more long-term.

Okay, and the last in the MasterCard business, any updates on verticals, I think you've mentioned education, is one that you think has a lot of potential overtime and I think you also from time-to-time talk about property, P&C insurance, personal property insurance is another opportunity also with the healthcare businesses you signed. Any updates on either of those verticals and progress you are making?

Nothing that’s material like a PaySpan but I think we've made progress on the education side. We have some things in the pipeline and then potentially give us more opportunity in that marketplace. We've continue to grow on the insurance side and that has been a nice steady growth strategy and growth for us over the last number of years but nothing to the extent of OTAs or with the PaySpan brand.

Your next question is from the line of Mike Grondahl with Piper Jaffray.

Could you help us understand what your customers need to see and maybe it’s just a better environment for same store sales taking a little bit of a boost?

Yeah, I think the real issue is it’s somewhat tied to GDP. I mean I think so they are going to move more product and services if the economy is stronger and as you know GDP was 1.5% and people like [UPS] and others were forecasting it’s not going be much better than that if not weaker than that going forward. So I think until we see the economy people have more confidence in the economy because there is so much uncertainty I think that they are going to fulfill their services, but I think that’s why we are saying we are going to see probably a little bit below being neutral in terms of same store sales growth.

Got you and then you did mention I think it was a $50 million deposit with MasterCard, could you just may be highlight what that was for a little bit more specifically?

Yeah, it really comes down to the growth in the program and MasterCard has a lot of internal metrics that they look at in terms of the size of the customers they are dealing with and essentially they made a credit decision that they would prefer to have us place little money on deposit. It’s an account and its turning interest that will stay in the account, but certainly some below earned but it really just comes down to a risk management decision based on the really pretty high growth rates that we have had in the business.

Your next question is from the line of Tien-tsin Huang with JPMorgan.

Just wanted to ask about how is the credit loss outlook, your term is pretty clear, your (inaudible) performing but is this slowing same store a precursor for higher losses may be that we should think about in '13 and I know its too early to give guidance but just a (inaudible)?

I think we have seen a lot of really great results in our credit loss really for couple of years now but this year is kind of really of standing out, we have done some things that we are just improving the aging and we are improving the flexibility of all balances and I don’t think those are temporary factors. I think we will continue to do that, all of the [times] we have right now point to a very strong performance over the second half of this year which our guidance reflex. If we hit the lower end of our credit loss range domestically that will be an all time both for us for the full year. So you know it may be a precursor but coming from the levels we are at, it wouldn’t do anything but it puts back into a more normalized range I wouldn’t think.

Just reaching back to the under hedging, given the over performance and the lower rate are you going to change your notional hedging as the overall. I mean its last where the hedge rates are today?

At this point we are not but we are always looking at, we are discussing with the board on a regular basis but we are not changing it as of now.

If we would execute another you know our next hedge it's in the range of $3.30 today.

And last one just on the [merchant] litigations that nothing directly impacting Wright Express but in terms of the surcharges it wasn’t clear to me as Wright Express is a network and key network would be included in that level playing field discussion of being surcharged or not, so what's your view on that Mike or Steve around surcharging and what it means for Wright Express? Thanks.

Yeah, as you know it’s a proposed settlement still in process; MasterCard is, I have no idea what happened on their call and what they talked about, but we are in close conversations with them. We know they have some proposed settlement at this point that would impact us potentially which would look like at this point somewhere in the middle of next year and go on for a number of months. So we would have a temporary impact to our revenue stream if you will, if it stays the way it is, so we are just watching it closely. You are right Tien-tsin, we have nothing that we can do about it just to stay close to it, watch it and be in conversations with MasterCard.

But anyway to potentially guide what that might look like or…?

Well, what we are referring to is that the 10 basis points for (inaudible), so we would be looking at our, you know you would have to look at our volume and it depends on what period of time that relates to as well, when they actually implement it, because we do have some seasonality.

Your next question is from the line of Phil Stiller with Citi.

I just want to follow-up on the last question on the credit settlement. If the surcharges go into effect at gas stations would your customers have to pay a higher rate and I guess from that what's your experience been in Australia, where a percentage of the gas stations have been surcharging for a number of years in terms of value proposition and the ability to sign up new clients?

Well, you are talking about the gas stations or retailers having the ability to charge for credit?

Yes.

Yes. I think that talking to the oils that's not their preference. I know they can't control each of their individual station, so in some cases, some retailers have been doing this for a while regardless and it hasn't been an impact, it’s been a very small number of stations that have been surcharging. That is not happening in Australia so we are not seeing any surcharging for our product in Australia, I don't know if any other surcharging going on down there.

Okay. Just switching gears on the transaction growth, total transaction growth grew 3%, vehicles were up around 7% which implies that transactions per vehicle is down about 4% which is pretty consistent with the first quarter; any ideas on what's driving that lower transaction volume per vehicle and have you guys done any further work on the fuel efficiency impact on your business?

Yeah, we do believe in the number that there is some fuel efficiency. I don't think it’s caused by CAFÉ standards. I think it’s caused by people just being smarter. They are using GPS either through us or through another provider and trying to get more productivity out of their vehicles. I think we are seeing that, but it’s not a major impact. If you think about GDP at 1.5% and we said we are down 1%, its impacting even below GDP, but it’s a major impact. I’ve recently read a study that says if you really start talking about impacts on CAFÉ standards long term that through 2025 there's only going to be a 17% decline in fuel consumption based on CAFÉ standards. So I don't think we are seeing it yet and I think it has a long-term impact and not even that big of an impact.

And just last question on the hedging strategy; you guys haven't put on the new hedge yet, its been about five months, are you guys price sensitive at the 3.30 level or what's the strategy there?

No, I think that we have said some times in the past, we have been looking at things like the 200 a average and trying to say should we do a hedge in the last quarter we decided not to, but our plan is to still do hedges on a regular basis going forward.

Your next question is from the line of Greg Smith with Sterne Agee.

Steve, you mentioned this tax issue in Australia, if that sort of goes against you, what impact do that have on your overall effective tax rate?

Especially what we are talking about is kind of FinCap rules and the intercompany debt that we have in place related to the purchase of, we tell decisions at the time; essentially the tax impact of that interest would be disavowed, at least some portion of it. I can’t really estimate it for you particularly well because it’s still kind of in early stages of discussions down there and so until we know what actual final rules are, it will be difficult. What I can tell you is that we’re currently deducting in the range of –well, we’re currently receiving a benefit of between $5 million and $6 million a year in our tax rate which we wouldn’t certainly not expect to loose a 100% of that, but depending on what the final outcome of those rules are, it could be certainly some portion of that.

And then just back to PaySpan to kind of sum it up a little bit; once you guys have build the product and maybe some additional products that you might need, once that sort of build, it’s handed over to PaySpan, it’s really up to them to drive the growth. There is not a lot you can do to further drive penetration; is that a good way to think about it?

That’s fair; I mean a lot of it’s going to be up to their sales force; it’s out there talking to their providers and customers on a regular basis. So they will really be the drivers of the product and that’s why I think they are so bullish on the potential to penetrate into their markets.

And then it’s just, they are obviously incented to do this too because they get a share; I mean not only is it maybe more efficiently better for their customers, but economically they are highly incented to move volume from a paper check to a card transaction right?

Correct, absolutely.

And then just lastly, on just your traditional fleet business are you seeing any pressure on the rebates on large contracts or on contract renewals?

No, we see clearly with the large fleets on contract renewals there is some of that going on but it’s not any different than it has been in the past, so we are not seeing any further pressure if you will.

Thank you. And your last question is a follow-up from the line of Robert Napoli with William Blair.

Thank you. Any update on your efforts in big truck sector?

Yeah I think that it’s still the chicken and egg; we have built the product so the investments been made; now it’s a matter of just getting more sites signed up and that’s the process we are driving right now to try to get to the fleets longer term.

It looks like U.S. bank is maybe getting and now kind of ignoring this business for a while; it looks like they are getting a little more aggressive; are you seeing that in the market?

No we know who TransCard is I think that’s name of the company they bought, so no, I mean we know what the acquisition, at least the target acquisition was. So I think that probably makes sense they do some things with their payment services that help heavy trucking companies. So I am not surprised by it; overall though I think they are still focused on their core markets which are primarily corporate customers and government customers and now we are going to see them a little bit more on the heavy truck side.

And then last question, are there any big programs out there that -- how is the pipeline, I missed the very first comments that you had, I mean is there a pipeline of new business in the fleet segment in US and are there any potential moving -- I guess metric moving customers out there like the post office or anything like that?

Well, I think yes there is a post office there is still other state governments; we won the state of Pennsylvania there are still other the private label portfolios that are in play currently and we know there will be some in the future and some other opportunities for portfolios and we are pursuing all of those. I think we still feel pretty good about bringing 270,000 vehicles in the first half of this year as well and the nice thing is that we’re spread pretty evenly across small medium and large, so we are taking market share, but there are those opportunities for some step functions as well.

And at this time there are no further questions. Do you have any closing remarks?