Good morning. My name is Bridget and I will be your conference operator for today. At this time I would like to welcome everyone to WEX's Quarter Two 2015 Earning Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. I would now like to turn the call over to Micky Thomas, Vice President of Investor Relations and Treasurer. Mr. Thomas, you may begin your conference.

Thank you, Bridget. Good morning. With me today is Melissa Smith, our President and CEO; and our CFO, Steve Elder. The press release we issued earlier this morning has been posted to the investor relation section of our website at www.wexinc.com. A copy of the release has also been included in an 8-K which we submitted to the SEC. As a reminder, we will be discussing a non-GAAP metric, specifically, adjusted net income during our call. Adjusted net income for this year's second quarter excludes an unrealized loss on fuel price derivatives, amortization of acquired intangible assets, expenses related to stock-based compensation, adjustments attributable to noncontrolling interest and a tax impact of these items. Also, we are now adjusting our non-GAAP metric to exclude the after-tax impact of foreign currency remeasurement gains and losses and related hedges. For consistency, we have revised adjusted net income for the prior periods to exclude the impact of FX gains and losses, and our full-year guidance excludes the impact of these foreign exchange gains and losses. Please see Exhibit 1 included in the press release for an explanation and reconciliation of adjusted net income to GAAP net income. I would like also 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, and the risk factors identified in our Annual Report on Form 10-K filed with the SEC on February 26, 2015. 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 Melissa Smith.

Good morning, and thank you for joining us today. WEX reported solid top and bottom line results for the second quarter of 2015 that were in line with our expectations. During the first half of 2015 we have seen solid organic growth and strong performance from our acquisitions, which gives us positive momentum as we head into the second half of the year. Our results demonstrate our ability to continue delivering broad-based growth in spite of macro economic factors in a challenging fuel price environment. For the quarter we generated $214 million of revenue, a 6% increase over the prior-year period. If fuel prices had remained at second quarter 2014 levels, revenue would've been approximately $239 million for the quarter, which would've been a 19% increase over the prior period. When further adjusting revenues for FX, M&A and divestitures, our overall organic revenue growth rate would've been 10%. Adjusted net income came in within our expected range at $1.25 per share, compared to $1.36 for the second quarter 2014. Our performance for the quarter was driven by solid execution against the strategic priorities I discussed with you previously which are to grow, accelerate and scale the business. Importantly the progress we're making towards our strategic even more confidence in the long-term prospects of our business and our ability to achieve our stated growth targets. In terms of growth, our innovative offerings and superior customer service have enabled us to maintain strong relationships with our current customers while winning new business across the verticals in which we operate. We pride ourselves on our track record as consistency and reliability as well as continued development of new value added service offerings that meet the growing demands of our customers. This quarter we've maintained a leadership position in our core markets, continue to…

Thank you, Melissa. For the second quarter of 2015, we reported total revenue of $214 million, a 6% increase from the prior-year period and in line with our guidance range of $211 million to $220 million. Net income attributed to common shareholders on a GAAP basis for the second quarter was $26.5 million or $0.68 compared with $43.3 million or $1.11 per diluted share for the same period last year. Our non-GAAP adjusted net income was $48.3 million or $1.25 per diluted share, down from $53.1 million or $1.36 per diluted share for the same period last year. The change in our earnings per share versus last year was driven by revenue declines from unfavorable fuel prices, as well as unfavorable foreign exchange rates which were partially offset by fuel derivative gains. These results are in line with our guidance range of $46 million to $49 million or $1.18 to $1.26 per diluted share. Beginning with this quarter, adjusted net income will exclude foreign currency remeasurement gains and losses and related hedges. For comparative purposes, adjusted net income attributable to WEX for the first quarter has been revised to reflect this change. As a reminder, these foreign currency remeasurement gains and losses and related hedges are primarily related to our balance sheet and the remeasurement of our assets and liabilities, which has been a natural byproduct of our business strategy to provide our global customers with the flexibility to transact in currencies other than our functional currency. This change does not affect our reporting around operational FX impacts, which continue to be included in adjusted net income. We believe excluding foreign currency remeasurement gains and losses and related hedges facilitate a more meaningful comparison of operating results. This change resulted in an after-tax increase of $0.09 per diluted share to…

[Operator Instructions] And your first question comes from the line of Bob Napoli with William Blair.

Thank you. Good morning. Question on, I guess, the virtual card business. Can you break out what was the growth rate for travel and the growth rate this quarter? I know we haven't lapped the healthcare yet. The payment volume?

We haven’t lapped volume sir. You're right, Bob. We haven't lapped the healthcare. I would say that the growth between the Evolution1 spend coming on and the travel vertical was about evenly split. So you're, again, in that teens range of growth for the virtual card.

Okay and then…

FX was also an impact in that number right? A third of our spend or 40% of our spend is outside of the U.S. so that impacted by another 4% to 5%.

Okay. So you're saying FX adjusted, the virtual card grew high teens?

Yes.

Okay. Thank you. Then Expedia. Nice to see that extended. You mentioned a little bit about – when was that extended and I know that had an effect on your interchange rate in the quarter, so was it at the beginning of the quarter the end of the quarter what should we think about in interchange rate for that segment going forward?

We actually negotiated the contract with them reflective to the beginning of the quarter.

Okay.

You would think of that as being consistent going forward.

And then I mean you did have – last question and I'll turn it over. The fleet actually had some pretty strong growth in the quarter, 9.3 million to 9.8 million vehicles. The average number of vehicles serviced. What drove that type of growth in the number of vehicles and why is Europe performing better?

To start with on the vehicles, Bob, what I'd say is there is normal growth in the portfolio, but there were some vehicles related to WEX Europe Services that we had not included in the first quarter that we have now included in this quarter. So – and it's several hundred thousand. So it's a bit of a different revenue stream and less profitability for most vehicles but they are included in the rest of the metrics as well. So that’s the I would say from a vehicle count perspective, it's a normal quarter and then you've got…

Okay.

That addition coming in.

And you asked about WEX Europe Services, I'd say it's a bunch of things. We were pretty proactive hitting the ground with making pricing changes in that portfolio. And that has gone well. It's gone better than we expected in the market. That's the first thing I'd say. The second thing is that the portfolio has also grown which is important to our partner so we wanted to make sure that we were also seeing volume growth in the portfolio. So we’ve been able to not just make a change in the pricing, but also continue to see forward momentum within that business.

And that's marketing strategies? You've been increase marketing spend or what is driving the growth?

Well, I think that some of it is more around how we're repositioning ourselves in the marketplace and we’ve been working with our partner Radius through WEX Europe Services. And I think there's a combination of the WEX expertise that we have around managing a portfolio and their local knowledge in the marketplace that combined is becoming pretty powerful.

Great. Thank you.

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

This is actually Steven filling in for Sanjay. The question I had was around same-store sales. Could you just provide a little more color around it? It seems like the weakness appeared a bit given that last quarter I believe was flat.

Yes. It was sudden for us. We had seen a little bit of softness going into the call but it was such a short period of time it didn't look like a trend line, but as we progressed into the quarter it continued. And if you look at our statistics I said it was down 2.7% for the quarter, the most market changes mining oil and gas, which was down about 17% year-over-year so while it's not a huge piece of our portfolio it was big enough that it's moving the numbers. We also saw about a 7% drop in manufacturing. So some of the parts of the economy that seem to be impacted based on overall fuel prices and also FX seem to be more heavily impacted. But I'd say just in general we're also seeing it across some of our larger fleet customers, some of its natural shift to more fuel-efficient vehicles, which is what we've seen over the last several quarters, but this was certainly much more pronounced within Q2.

And could you break down, in terms of the 17% down and the 7% down, how does that compare to the first quarter?

Oil and gas was down a little within Q1 pointed out right now. But if you look at the comparable period transportation was down 1%, mining was down 3%, which is the equivalent of oil and gas. So it went from down 3% to down 17%, and a lot of the areas where we were seeing positive – construction continues to be positive across our portfolio, but some of those larger customers also went from being slightly negative in Q1 to quite a bit more negative in Q2. There were certain segments within the business I'd say are much more pronounced, and again I think that's related to what happening overall with fuel prices and with foreign exchange having impact, but it also seems to be cutting across a bunch of SICs with some of the larger customer base.

Got it. And just clarification question, in terms of your guidance, that assumes the $1.19 now for the first quarter?

Yes. That’s correct.

Okay. Great. Thanks for taking my questions.

And your next question comes from the line of Ramsey El-Assal with Jefferies.

I guess following up on that last question, can you kind of parse out the different drivers of your guidance reduction? And maybe you can do this qualitatively if not quantitatively. How much of it is fuel in terms of a primary impact versus this second derivative impact from the slower verticals, versus anything else that you might want to call out in terms of what drove the guide down?

So, Ramsey I guess, the first thing I'd want to say in a little more conversational tone, when you adjust the second quarter that we just had for FX impacts for fuel price impacts, and normalize all the M&A activity, our organic growth rate in the revenue was right around 10%. So, obviously, those macro headwinds are small, but I think to kind of set it up, we are executing very well even if it's not tremendous apparent in the numbers. So anytime there's a re-forecast there's a lot of moving parts and we know that, but first with the prior guidance we gave, revenues down in the second half of the year for three primary reasons. Fuel prices, slightly, foreign exchange rates and the same-store sales that we were just talking about in the last question. The FX didn't really have a large earnings impact because of the natural hedge with the expenses in the business. Fuel prices had an impact. It was $0.04 of change in fuel prices so it's a few pennies. But when you couple it with the declines in the same-store sales, that’s s where you're getting the majority of the earnings impact from the changing guidance. And it's impacting not just the payment processing revenue, but also the finances which are starting to become a bit of a larger revenue stream for us with the changes in the pricing that we've taken over the last couple of years.

Okay. That's very helpful. Second one from me. Have you gained any kind of additional clarity on the timing or magnitude of accretion from Esso in 2016 now that you've had ownership here for a little while? Are you getting a little more clarity in terms of maybe when and to what degree that should turn into an accretive factor in 2016?

I’ll start, and Steve might want to add some more color to that. We've said that 2016 would be a turning point. I still believe that each quarter that we get into this we learn more. We're seeing really good revenue dynamics. The change in the cost structure is something that's going to take some time. In the European environment that is something that has to go through a natural process. So I think that clouds the precision around when you're going to see the full effect of that, but overall we are – if you look at all the individual pieces of what we said we’re going to do that we were going to make changes to the overall pricing environment, we were going to continue to grow the portfolio and we were going to make changes to the cost structure and then re-platform. Each of those things are actually progressing, if anything, ahead of when we planned. And I would say the timing around the adjustment of the cost structure we don't have as much control over as the other things, which is why in part, we went pretty aggressively at the other things.

Okay great. That's also very helpful. Thanks a lot.

And your next question comes from the line of James Schneider with Goldman Sachs.

Good morning. Thanks for taking my question. I was wondering if you – pardon me if I missed this before – but could you maybe dig into the deceleration in the same-store sales you saw in the quarter and I understand the oil and gas might've been – why that would've obviously been a driver, but can you talk about the transportation in some of the other verticals and what you think may be going on there?

I mentioned a little bit this earlier, but I'll repeat, mining was the biggest decline. It was down 17% year-over-year and I think that's inherent mining. It also has oil and gas included in there. Manufacturing was down 7%, which we think has something to do with the FX environment that we're in. Transportation was down about 4% in SIC code. And then I would say just across the board with some of our partner portfolios, where we have less insight into the specific industries, we're seeing I would say more broad-based declines year-over-year, so when we talked to the customers, what we're hearing from them is a little bit around fuel efficiency which we've seen over a period of time. And a little bit around winners and losers around the fuel price environment and FX environment. I would say right now we're getting general comments back from the customer base, and not really any one particular theme.

That's helpful, thanks. And maybe as a follow-up, just a follow-up on the earlier question regarding Esso and the accretion expectations. I really wanted to ask you more about the revenue side of things. Can you maybe quantify or give us any color around how much the revenue on the European operation is exceeding your expectations at this point in time and kind of what you think that might look like in terms of plan going into 2016?

We started as Melissa said earlier, raising the fees to our customers and getting them more in line with the marketplace pretty much right off the bat. So when we initially talked about the portfolio we talked about a $35 million revenue portfolio, and even with the drop in the Euro I think we're pretty far outpacing that. Well over double-digits in terms of the uplift that we're getting. Earlier than we expected. So it's certainly helpful, and as we've said before, we also got some more costs when we took over the portfolio as well, so from a bottom line perspective we're in the same place that we expected to be.

I see. Thank you very much.

And your next question comes from the line of Mike Taiano with Burke & Quick Partners.

Hi thanks good morning. Just had a question on a transaction that occurred during the quarter with GE Capital's fleet being acquired by Element, and I believe they also had acquired PHH which is a customer of yours as well. Just curious how to think about that. I think GE Capital had a very large number of vehicles with you anyway, so as we think about that going forward – I don't know if there's a trigger that would – in the contract that would cause you to renegotiate now that they've been acquired, but is it fair to think that the pricing shouldn't change all that much given GE was probably already getting pretty good pricing given the number of vehicles they had?

Yes. I’d say where both great partners of ours. Originally it was PHH, now Element. We met with them. We've had strong relationship with them as well as with GE. It's a little unclear when the timing of that combination will ultimately happen. But for us, you're just combining to really strong relationships and from a pricing perspective there's a fair amount of commonality across the market and how we think about pricing. So we would enter into a discussion with them I would say under normal course of business.

Got it. Great. And then, Steve, I noticed you – this quarter you had some fed funds that you draw down on. Just was curious as to the reasoning for that? I think it was like $50 million.

It just a day-to-day cash flow issue. It's the reason those lines are in place. Rather than going out and getting CDs for three or six months of or something like that when you may not be them everyday, we routinely rely on those fed fund lines. It's been a while since we tapped them at a quarter end, but it's not certainly anything unusual in the business day-to-day.

Got it. And then just last question. I noticed the account servicing fees in the other payment solutions business were flat relative to 1Q. Is that something where we would expect the bigger increase in the back half of the year, I imagine like fourth quarters when the enrollment periods occurs, is that sort of trend wise what we should expect?

Yes, I think one of the great things about the Evolution1 business is how predictable it is, and like you said, you get a lot of those enrollments towards the end of the year. Typically they take effect at the beginning of the next year or so. Once you get through the deconversion process if there are any, once you get through the first quarter you have a really, really good insight to what their revenues are going to be for the year. That also means that those revenue streams are going to be pretty consistent quarter to quarter as well, so I think that you'll continue to see that.

Great. Thanks a lot.

And your next question comes from the line of Tien-tsin Huang with JPMorgan.

Hey good morning, somewhat related, I'm curious if your pricing outlook on the fleet side has changed at all for the second half from what we were thinking a quarter ago?

No, and from our perspective it's been a competitive market for a number of years and we'll envision it to continue to be competitive.

I think some of the pricing increase we talked about Tien-tsin last quarter, they're actually going into effect now. Literally within the last couple weeks so everything that we talked about last quarter is still holding.

Okay. Those comments helpful there. Then – and sorry if I missed this I got disconnected – the hedge – fuel hedge interest in the striking that and if so where with that level be today?

If we were to do something further it would be pretty much the same range of where prices are for this year. We're looking in the mid-$2.60, $2.70 you know above $2.70 maybe something in that range for next year if we were to extend it.

But your appetite at this point?

We would still say the same thing that we don't think that it's worth the potential upside to lock ourselves in at this point in time.

Okay, make sense. Makes sense. I just wanted to make sure.

Yes, we’re seeing how the market right now.

Okay. It makes sense. I just wanted to make sure. Forgive me for asking. And then just last one, on Evolution1, not surprised to see it doing very well, I'm curious just with all this healthcare consolidation with the payers and whatnot, any knock-on effects to Evolution1 that we should consider?

I’m sorry, I didn’t get the last part of your question, can you repeat?

Just trying to think about all the consolidation that's going on in the healthcare side with some of the healthcare payers consolidating and whatnot. I'm curious if there's any kind of derivative impact that we should think of for Evolution1? That's all.

Yes, in some cases they're winners and when there's consolidation which they were with HSA Bank and I think generally speaking they have a pretty broad reach within the marketplace which is helping in the whole consolidation game where they have an ability to – if there's consolidation it's typically happening from one partner to another. But it is definitely a macro trend that we are discussing within the business and from their perspective it's more about increasing the reach that they have into the market, adding more partners so that you get more and more protection if there is consolidation.

Yes. It's pretty well diversified. Thank you.

And your next question comes from the line of Smitti Srethapramote with Morgan Stanley.

Hi Melissa, Steve and Micky. This is Danyal Hussain calling in for Smitti. I just wanted to touch on the processing rate for both fleet and other payments. I guess just looking at fleet specifically, can you talk a little bit more about the merchant consolidation? How much of the sequential decline you can attribute there? And then was there any impact in the quarter from consolidation of the leasing partners or I just wanted to clarify whether that is only going to happen at the time of the consolidation or whether there would be any? Whether those contracts would just fold up under the Element contract?

So let me take a couple things at a time here. I'd say on the fleet space and the rate, the merchant consolidation has kind of happened and it was a piece of the first quarter as well as the second quarter, so sequentially not a real big change there. It's just a matter of winning in the marketplace and renewing large fleets in the basis point or two of pressure that we're going to get every year in those rates is where I'd attribute most of that to. On the MasterCard or other payment side, on the travel side, we talked about the couple basis points mostly being from the renegotiation of the one contract. In terms of the fleet, our partner consolidation, no impact yet. I mean the deal still needs to close first of all before anything would happen and when it does what will typically happen is there operate under their existing contracts for some point in time until we renegotiate something with them or they start physically moving – reissuing the plastic under one or the other of the deals. But typically we'll renegotiate an all-encompassing contract with them.

Got it. And then just looking at the credit loss improvement. Can you talk a little bit about what's driving that and how sustainable you think it is going forward? I'm just wondering if Q2 was – if there's any benefit from a reserve or lease of any kind?

No, I wouldn't call it a reserve or lease at all. I'd say from a dollars perspective, obviously the lower fuel prices is a biggest impact there, right? We're charging off balances that were at much lower fuel prices this year than they were last year or even last quarter as they've continued to come down. The aging is in very good shape and that was the primary driver for why the basis points in the fleet side went down. We did reference the one bankruptcy we had in the other payment side which was about $0.01 of earnings actually and one of our larger ones that we've had. I think – and you can see it in the forward guidance we gave, we're expecting credit loss to be at pretty low levels this year and if those numbers hold for the full year it's probably one of our lowest ever. So, yes, we do think it sustainable. We're not seeing anything in the aging of the portfolio that gives us pause on that.

Got it. And if I could just ask a quick clarification. The 10% organic growth number you gave, does that include the addition of Esso?

No. So adjusted for all the M&A activity fuel prices and foreign exchange rates so take all those things out and it's about a 10% growth rate.

Great. Thank you.

And your next question comes from the line of Ashish Sabadra with Deutsche Bank.

Hi. A quick question on the fuel consolidation. So Element – the text seems to suggest that Element has started reissuing fuel cards for PHH or replacing the PHH's fuel cards with Element fuel cards? Are those Element fuel cards also supported by the Vex network? I just want to confirm that.

Yes. They're essentially just migrating the PHH name, and they have, to Element.

Okay, thanks that's helpful. Just quickly on the FX remeasurement gains and losses, what is the assumptions in the new fiscal year 2015 EPS guidance, what is the assumption around gains from these FX remeasurement gains and losses for the full year?

For the full year, if you look at the income statement, the nonoperating gains and losses, we've pulled all of that out in the new guidance so the $5.14 at the top end has no FX remeasurement amounts in it. We're assuming the exchange rates kind of stay where they currently are.

Sure, Steve, just maybe a quick clarification on that one, so what – like if, as you said, if the exchange rates stay where they are, what would be the roughly – approximately the FX remeasurement gain/losses in the third and fourth quarter?

I’ll add in here a little bit just to make sure its clear, we're talking about there's two different pieces of FX that impact us. So the part that are more operational, so the fact that we're earning money in Brazil and we're converting that back to U.S. dollars we continue to reflect that in our forward guidance. And as Steve said, we are presuming that FX exchange rates stay where they are right now. The part that's sitting on our balance sheet for the fact that we have cash in 17 different currencies it's getting mark to market on a regular basis at the end of each quarter, that part we've excluded from our adjusted net income. It was really just a remeasurement of what the assets look like at the end of every quarter and we decided to exclude that from adjusted net income so there's no impact of that through our adjusted net income guidance range for the full year.

Okay. That's helpful. One final question from me was about the diesel prices have been trending lower than the gas prices. Have you factored that in the assumptions in your oil price assumptions for the full year?

Yes. When we do the prices we take the NYMEX cards for the related products, correlate them into retail prices – individually correlate them into retail prices and then blend them together based on the mix that we have. So, yes, to the extent that correlation is changing we've taken it into account.

Okay. Thank you very much.

And your next question comes from the line of David Togut with Evercore ISI.

Good morning. Just a clarification, Melissa. You indicated that the change in the European cost structure will take some time. Can you just expand upon that, particularly with respect to possible margin leverage once we get beyond this year? Number one what's your visibility on the European cost structure beyond 2015 and do you still not expect to have incremental investment in Europe in 2016 relative to your current run rates this year?

Okay, I’ll take each of those. Actually I'll start with your last question. When we your last question. When we're looking at 2016 we're still presuming that where it is going to be breakeven or greater, based on what we know at this time in point. The question earlier had been really the point in time that we're going to actually see a change and that's really what I was referring to is that I can't say with precision exactly how this is going to play out. What I can say is that we're continuing to see really positive trends on the revenue side that we are making changes on the cost structure side. The process they have to go through, as you know is going through work councils and so that's the part we have less control over, but that's a piece of what will happen throughout the business model and then in longer term view this is going to happen in phases since we think about optimizing the overall cost structure and some places we're adding resources, we talked about telesales as an example of that, within the marketplace and in other places we'll hopefully be relocating some of those resources and so there's a little bit of each of that that's happening within the marketplace.

Understood. And just a question about M&A in Europe. Edenred acquired a minority investment in UTA, a German fuel card business. And I'm wondering whether that was something that you would've looked at, and was that something that might have fit with your strategy.

Yes, there are two big players within the European market on the Over the Road space, DKB and UTA, which are both family-owned businesses. And, as you said, Edenred took a minority ownership position in UTA I think within the broader marketplace. I won’t comment in anyone’s specific transaction. But we always interested in looking at people that are within our direct marketplace and we have in particular we can expand our networks. So any of those transactions you are going to see across Europe, and frankly in any part of the world is something we're going to have interest in. It just needs to work out economically and particularly if you're going in some type of a joint venture, the control dynamics also need to work out.

Understood. And just a quick final question. In early June Fleet announced a contract with Uber. I'm wondering if that's something that you competed with – is that –because I know there was a wage – there was sort of a wage deduction piece of that contract in addition to standard fuel card? Is that something that would have met your criteria in terms of expansion and new customers?

Yes, so we were very aware of the Uber contract in the marketplace. We have a great relationship with Zipcar as an example, if you think about something that's a little bit unique in the marketplace. In fact we just renewed a five-year contract with them. So it's, again it's a little bit of a novel play in the marketplace and it wasn't a place that we came to terms with.

Got it. Thank you so much.

Okay.

And your next question comes from the line of Glenn Greene with Oppenheimer.

Thanks good morning. Just a few clarifications. Obviously, the same-store sales declines a big factor in the back half guide and you highlighted the oil and gas exposure or decline there, but could you clarify what you're relative exposure is to the challenge verticals?

I'd say the three that Melissa talked about with manufacturing oil and gas and transportation are somewhere between say 15% and 20% of the overall business.

Okay. And then just in terms of the back half guide, just to be clear, are there any changes in the other payments business or that's kind of status quo?

That's pretty status quo. It's growing nicely as we talked about early on and we expect all those trends to continue.

Okay. And then finally, it sounds like your M&A appetite given you start to brunt leverage down, I think you said three times at this point. Is that accurate – be thinking about you want to get more aggressive on the M&A side and where might be the focus areas?

I would say that we have been active in nature in the marketplace all along the affordability becomes a little bit easier as leverage ratio comes down, but we'll continue to be active in the marketplace and we have a pretty high filter. So we'll go through a whole series of transactions that are happening in the background it’s an ongoing basis to get to the ones that we actually announce.

Okay. That's all I had. Thank you.

And your next question comes from the line of Tom McCrohan with CLSA.

Hi, everyone. Most of my questions have been answered. Just ask a modeling question related to the trends and on the credit side. Steve, what was the charge-offs this quarter if you exclude the bankruptcy?

About $7 million.

So the charge-off – I thought you said charge-offs earlier were $7 million?

$7.7 million.

Got it. I missed the point part of it. And in terms of trends on the provision side should we expect the gap between charge-offs and provision to narrow or expect them to stay where they're at right now.

No, I mean obviously the charge-offs were higher than the provision right, and that’s a scenario that can’t continue forever, right? We were – it's just the way the aging of the receivable balances came out. That was what we needed based on the historical charge-offs. It's a fuel price phenomenon that we're seeing coming through right now with the dollar values of the charge-offs at a higher than where the current receivables are, so that's a lot of what's going on here. But obviously over time those charge-offs and the provision have to kind of come into line.

Okay. And in terms of the hedging on the fuel side, so is the right way to think about this as you have until the end of this year to put hedges on for 2016? Or is there a date where if we don't see an 8-K filing that you put some hedges on that we know you're not going to be hedged for 2016 at all?

Again, I mean I guess so I would say, Tom, is we've said we'll kind of monitor the marketplace and it's that risk reward balance and our view comes into more balanced in our view, then we could do something. I'd say right now we don't see it. We're probably not going to come out with a pronouncement that says we're not going to do it or we are going to do it. It's going to be if we come to agreement that it's the right thing to do, we'll do it and we'll talk to the world about it. But for right now, we're going to stay out of the marketplace.

And my last question, can you just remind me again what percentage of your revenues is sensitive to fuel prices?

In the low 30s between 30% and 35%, it was 37% but its coming down a little bit between Evolution1 and WEX Europe Service with their lesser amount. So it's in the low 30% now.

All right, so any sensitivity for 2016 would be less than it was prior to what you provided?

In total revenue the percentage term is going to go down but the actual dollar amounts, hopefully we're going to continue to grow and so those dollar amounts aren't going to get any smaller.

Got it. All right thanks.

And thank you. This does conclude our question-and-answer time. I'd now like to turn the call back over to Micky Thomas for closing remarks.

Okay. That concludes our call. Thank you all for joining us. Goodbye now.