Good morning, my name is Jennifer and I will be your conference operator today. At this time I would like welcome everyone to the Wright Express First 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 8-K we submitted to the SEC. As a reminder, we will be discussing a non-GAAP metric, specifically adjusted net income, during our call. For this year’s first 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. 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. I am pleased to announce another great quarter for Wright Express. For the first quarter revenue increased 17% to $140 million well-adjusted income rose 22% to $0.91 per diluted share both in-line with our guidance. During the first quarter we saw continued organic growth in our fleet business with consolidated payment processing transactions up 3% over the prior year and vehicle growth of 13% primarily driven from the launch of BP Australia in the second quarter of 2011. We also saw very strong performance from our corporate charge card product in our other payment solution segment. As spend volume increased 52% year-over-year, overall we are executing well and these results underscore the strength of our growth strategy to expand our America’s fleet business, diversify our revenue streams and build out our international presence. During the first quarter we made further progress in expanding our America’s fleet business, despite choppy economic indicators the macro environment has remained largely stable which coincides with what we are seeing in our existing customer base or same store sales trends. Our existing customer base or same store sales were down approximately 0.5% compared to Q1, 2011. Looking at our portfolio by SIC code, our two biggest concentrations business services and construction were both slightly positive for the quarter relative to the first quarter of 2011. As was transportation, however, nearly all other SICs were down compared to the prior year. Our existing customer base for the first quarter had relatively steady performance with fourth quarter trends. Looking regionally the South-West was once again the strongest region. Consequently, growth in our core fleet business is been driven by new business wins, a testament to our innovative products, strong customer service and proprietary technology. On the new business front…

Thank you Mike, for the first quarter of 2012 we reported total revenue of $140.1 million an increase of $20 million or 17% from the prior year period and slightly above the high end of our guidance range of $134 million to $139 million. This performance was driven primarily by continued strength in our other payment solution segment, payment processing transaction growth and higher fuel prices. Net income to common shareholders on GAAP basis for the first quarter was $23.2 million or $0.59 per diluted share. Our non-GAAP adjusted net income increased to $35.6 million or $0.91 per diluted share. EPS is up 21% compared to the $0.75 per diluted share reported in Q1 last year on an adjusted net income basis. Taking a look at some key performance metrics for the first quarter, total fuel transactions increased 8% over the prior year. Payment processing transactions were up 3% in total. Transaction processing transactions increased 31% 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 Q1, 2012 was 1.64% which was down four basis points versus Q1, 2011 and down two basis points versus the fourth quarter of 2011. This rate will vary with fuel prices due to the impacts of our Harvard Merchant Contracts. The primary reason for the decline in our rate from Q1 last year was due to changes in fuel prices. The rate this quarter was very much in line with what we saw in the second, third and fourth quarters of 2011 as fuel prices were relatively consistent. Finance fee revenue in the fleet segment was up $1.2 million compared to Q1 last year. As a percentage of total dollars of fuel purchased…

(Operator Instructions). Your first question comes from Sanjay Sakhrani with KBW.

I guess I have a question on the M&A outlook for you guys. Obviously your competitor made an acquisition in Europe recently and yesterday announced another one in Brazil. I was wondering whether or not those are potential targets for you guys or targets that you would have considered and if yes, what are some of the barriers were to make those acquisitions?

Comment that we know of both businesses. We knew a lot more about the UK business than we do about the Brazilian business. That was a process that was run. We were involved. I think this is a company that used to be a sister company under send it with Wright Express. We knew the business very well, but for different reasons it was not something that were successful at. So that's pretty much, it was something we had an interest in, but just not successful in completing a transaction.

Okay, are there any other items that you are looking that you think might pan out over the course of the next year or so?

Yes, there is no doubt we are actively looking. So now it's got to be from our strategic standpoint what's the right fit, what's the right price? Steve mentioned we had some development costs. We feel optimistic about completing some deals this year, but as you know, that still means getting to the finish line and we're going to be prudent about what we're doing to look at these companies. But we are inquisitive and we will continue to be inquisitive.

Okay that's fair. I am sorry if I missed this, because I jumped on a little bit late, but just in terms of the other processing business, at first Steve you mentioned the interchange rate was lower for a variety of reasons. Is that the rate we should consider on an ongoing basis? And I guess secondarily, just in terms of some of the pipelines of new customers. How much of that year is factored in and I think you had mentioned a couple last quarter of perspective customers. Did any of those impact the numbers this quarter and how should we think about on a go forward basis?

So for the first part of your question, yes, we do expect that net interchange rate to remain pretty consistent with what you saw in the first quarter for the rest of the year. A caveat I throw in there is mix changes can affect that and to the extent it comes from one of our OTAs versus a small purchase card customer, the interchange rates could vary a little bit from that. As well as foreign spend which as I pointed out, it does tend to have a lower interchange rate than we have here in the US. In terms of the pipeline, we did mention that there's been a couple of signings in the UK. They've not gone wise yet although we do expect that to happen in the next couple of months or so. But there's some impact in our guidance for that. But it's not particularly meaningful.

Your next question comes from Roman Leal with Goldman Sachs.

You’ve been alluding to a nice pipeline for international clients, potential wins for your corporate charge product. Any update on that and any color on the pipeline, maybe it's either sized with these potential customers or expected timing.

Yes, I think as Steve just said, we signed two in the UK that we expect to roll out pretty much mid-year third quarter timeframe. But the pipeline is strong, so we're seeing good activity in Europe and we've been expanding the sales force there. Australia, again because of the relationships we had with the prepaid product. We were able to leverage those and we feel very confident that two of the largest OTA partners that we can develop will eventually be partners of Wright Express on our OTA product and we believe there is opportunities there. So that will probably roll out later in the year. we have to do some things just to get everything ready. The good news is, we're already in Australia, a lot of the fundamentals were in place. We’re just building off of that to be able to put these customers up and on the books if you will this year. So we will continue to be aggressive in those markets. We are looking because of what we are seeing with the trends, some of the investments we're going to be making is to expand more aggressively internationally on the online travel sites. So that's again where some of the longer term investments are coming from

Okay on the co-branded opportunities, how did the pipeline look there and is that mostly a US opportunity or is there some potential partnerships, I guess rest of the world as well.

Yes, in the US we've got the sixth largest co-brand partners today which really dominate that landscape. We got solid strong relationships we talked about too that we just extended longer term relationships over three years with lease plan and with enterprise. So most of the opportunity we see in the co-brand business is quite frankly in Australia. That program when we bought it was primarily a down market small fleet oriented business and we're trying to bring some of our best practices. They have a universal card at a little over 90% of all the petrol stations or gas stations in Australia. So we're moving up market with our own propriety program, that who we talked about in the prepared remarks. And we're working with co-brand leasing partners to also bring them into the fold. They were doing a little bit of that, we're just being more aggressive with those co-brand partners and we are see going traction.

And then last one, bringing of the prepared remarks, you talked about SIC codes and what you saw there. Would you say that the trends were in line with expectations, maybe surprisingly upside or downside?

Yes, they were pretty much the same as we saw in the fourth quarter and we've also looked at April's numbers since we have those and there is really no change. It's hard in one month, because things can move around, but we're still seeing the same thing, construction, business services and transportation even through April being up where the others are slightly down to down to some extent.

Your next question comes from Phil Stiller with Citi.

Just wanted to ask about the expense ramp, see if you can talk about stock comp and some accelerated investments. I was hoping you could perhaps quantify each of those buckets and then talk about what particular investments you're making and where we should expect the payoffs on those?

The stock comp for the full year is probably in the range of $0.02 to $0.03 of EPS and to be clear, this is not about changing the size of the pool or the number of shares that we're granting. It's simply the timing of when we recognize the expense and the rules are all very complex rounded and the grant was slightly different than we had planned on. So we got a little bit more expense this year than we had planned on originally. In terms of the other investments, I think we tend to hit on them a little bit already. The single used product expanding that internationally which essentially means coming and getting ourselves up and running in various countries. So that means getting licensed to actually be an issuer ourselves or finding a partner in those regions or in a region to work with us to be an issuer on our behalf. As well as just some continued corporate development activities, M&A kind of activities.

On the payment processing transactions, you guys have been around 3% at the last couple of quarter, I think you talked about the pipeline, it seems like more of the opportunities are in the small and mid-size fleets. Is there anything large in the pipeline that could get that growth rate back to the mid to upper single digits, anytime soon?

Yes, I think to get it back to mid to larger single digits would really be the existing customers showing growth. It's really hard to offset with the majority of your business being your existing customers that basically are down a little bit or flat. So I think we feel good about the new business, even gallons themselves were up 4% which is more indicative of revenue, but I think we have to see some of these existing customer SIC trends start to get better over time, to start to get back into that middle 5, 6, 7% growth rate. There are still opportunities to sign some step functions, either some private label partners. There are some big fleets out there but those are long-term and there's nothing that's imminent right now that we would say would on the large fleet size it's going to change things in the next quarter.

On that point about the gallons you guys have seen a couple of quarters here with the gallon per transaction has been up year-over-year. I know you didn’t really know why last quarter. Any further insights into that now?

It's really hard across the board, there's so many SIC codes and I'd like to say it because we're seeing different mix of trucks and vehicles, but I don't think we have a good sense because it's so embedded in so many transactions but that's what's driving exactly the 4% gallon growth versus the 3% transaction growth is because the transaction number, the gallons per transaction are up.

Okay, last question for me; on the M&A pipeline, you guys clearly have aspirations there. Can you remind us what financial criteria hurdle rates you guys look at and then given how aggressive your competitor is being in terms of making acquisitions, have you thought about adjusting those and looking at international expansion?

Yes, it's going to depend on a number of things, what's the growth trajectory of the company, will determine sometimes what the multiples we're willing to pay. Clearly what's the synergistic value of the company? We're going to look at MPVs and returns and how to make sure we're deploying our cash properly. We've got our strategic list. We're pursuing them. We feel very good about what's in our pipeline and what meets our strategic criteria. So I think as I said, until you get to the finish line, things can pop that just says, this is something you just can't finish in terms of acquiring. But we feel good where we are and what we're looking at and as I said, we're optimistic about announcing some things this year.

Your next question comes from Robert Napoli with William Blair.

Question, just want to be clear Steve on the interchange rate or the 90 basis points in the other payment segment. You are suggesting that that number would be a number that we would be good to use going forward. And you said that you have down incentives, reduced incentive fees for MasterCard. Generally when you're growing your volume the way you are, MasterCard, you get a bigger piece as opposed to a lower piece. So I am a little bit confused by that.

You're right. The incentives we get from MasterCard are essentially based on growth. It’s a matter of how much growth though. We had such an explosive number last year when we were in the 60 and 80% ranges that when you drop it down and only had 50s which we had this quarter. It brings the rate down. It's not a change in anything that we're seeing. It's just a matter of how the fend ramps so quickly last year. we got a lot more incentives last year than we're expecting to this year.

And so the 90 basis points, how much further reduction should we expect in that 90?

We think it will be pretty consistent for the rest of the year.

Okay, and then are you seeing any new competition? Do you have a business a grows, the way you've grown this business; generally it attracts the entrepreneurs in America and the venture capital firms and the private equity firms. Are you seeing their competitors, targeting this market and you have concerns on the competitive front. Or you had this all to yourself it seems, that you almost created the business.

No, I don't think we have it to ourselves. Clearly even winning a piece of business like Expedia, we took from a very large bank who is very strong and their financial capabilities and had a product. So it was, I think, outperforming with some of the things we had built for functionality and service levels and responsiveness and air files and all those things that give us an advantage in the marketplace. I think what we're seeing as we start to expand more internationally that we're getting a better view of the landscape and we're seeing some international players as well in the marketplace that probably will have their sites on the U.S. So again it depends on how we keep ahead of the game with our investments in functionality and making sure that we drive the best service levels so we can expand internationally, compete with whoever it is on the international front but make sure they're not hurting us back on our domestic front.

Now you do not have the price line bookings.com business in Europe today and that’s such a massive fast growing business. Does this product not work for bookings.com for structural reasons or is it something that you feel like you have a good shot of winning at some point. Is there another product or what?

Yes, the model that bookings uses is more of an agency model whereas our product works better certainly for a merchant based model. So the applicability isn’t quite as strong as it is here in the U.S.

Okay, and then finally on your second quarter earnings guidance, it seems pretty conservative and you guys have a history of being conservative but it's a pretty big slowdown in the earnings growth rate in that target range. Is there anything in the second quarter that’s unusual, why would there be that much of a slowdown. I understand you maintained your full year guidance.

Yes, that would be my first point Bob. The full year numbers are unchanged. The other significant point I'd say is that margins in the second quarter on a net income basis at the high end of the guidance were 1/10th of a percent different than the actual result in Q1. So it' really not a lot different. You do know that we raised the fuel price guidance for the year and based on that you expect a $0.02, $0.03 or $0.04 of EPS upside which you didn’t see in the full year numbers and that's really being offset by the things that I mentioned before, the other investments in the business as well as that stock compensation which is non-cash.

Your next question comes from Greg Smith with Sterne Agee.

Steve, just a follow up on the guidance. I guess what would it take to get to the high end of your guidance? Would you need to see a material and I'm talking on the full year, would you need to see a material uptick in sort of the economic activity out there?

I don’t think there would be a material uptick in the suite volumes essentially. We're not counting on anything significant in our guidance. So if we got that, that would certainly help us.

And then the stock comp, you said we're only talking the full year stock comp expense. Is it really only about $0.02 to $0.03?

There is a little bit in the first quarter but that's another $0.02 to $0.03 in the last three quarters of the year.

And then talking about Higher One, I believe that's going to come on around the middle of the year and just any expectations or quantification of what that will do to your operating financing costs?

Yes, we're actually on track to implement them this week on Friday. So initially we expect to receive somewhere in the range of about $300 million in cash and that will, at the start, as we said before, it's a very, very low interest rate. It’s a below market interest rate. We're going to use that cash to replace Certificates of Deposit to the extent that their rolling off and we can. We're also going to just add some on balance sheet liquidity at our bank and that excess cash that we maintain there we'll just invest at the Federal Reserve. So very conservative investment but that's the update on Higher One. We're on track to come on, on Friday.

And are you pursuing any additional business, similar to Higher One?

I can't say that we're actively pursuing it. I think we want to make sure that we get this one up and running and implement it first because there is a lot of work on the back end in terms of actually issuing the cards and getting the compliance correct on our end. I wouldn’t rule it out in the future but I wouldn’t say we're trying to draw up a pipeline right now, these types of deals.

And then lastly, maybe for Mike, you guys mentioned some signings in insurance in the single use product but where do we stand with regards to maybe signing a very large insurance company. How are the prospects looking for that?

I don’t think you're going to find the same sort of step function like you're going to see with the online travel. These are still good sized spend numbers but probably more in the $50 million to $100 million or spend. But we hope we can keep signing more and more of those types of keep adding to the portfolio.

I don’t think you're going to find the same sort of step function like you're going to see with the online travel. These are still good sized spend numbers but probably more in the $50 million to $100 million or spend. But we hope we can keep signing more and more of those types of keep adding to the portfolio.

But do you have any giants in the industry in the potential sort of target list at this point or should we just not expect that?

I'm not going to comment. I really don’t feel comfortable commenting at his point.

Your next question comes from Tom McCrohan with Janney.

In connection with pricing trends in the fleet business, just trying to get a sense for, are the net processing rate has remained relatively stable but in the context of debit card fees coming down, I know you guys were not impacted by Durban but is your ability to maintain prices impacted at all going forward given the lower debit card fees and assuming that a lot of purchases at the point of sale are done with debit cards and your ability to price assuming that that is a function of the relative prices for other debit cards.

Well first of all we don’t see any pressure even with the high price of gas because I think we put in place our hybrids. We have no real discussions going on to change our prices with the merchants. We negotiate those one on one. There is no MCC or merchant category that we basically dictate what the numbers will be. So we feel that we're not seeing any pressure at this point coming from any of the legislation, maybe that the debit card changes in the market place. So we feel pretty solid where we are today and feel good about the hybrids that we put in place with the oil companies.

And then a follow up on the online travel or the other segment. Can you give us any market share statistics of what kind of share you have today in that space, if there is one?

I don’t feel comfortable giving you some off hand. We could maybe do a little bit of research but it's a growing market. I don’t know if I have a good number for you. You're talking in domestically or internationally?

I guess both. I'm just trying to figure out what the adjustment market is, where this could go.

The travel market in Europe is essentially the same size as the travel market in the United States. So we've got a huge share with the OTAs, not overall travel market in the U.S. but in terms of the domestic guys we've got the big ones.

And have you broken out or could give any color on the quarterly spend on these cards, what proportion of it is online travel versus something else like insurance and then the same split like U.S. versus non-U.S.?

In our business the total purchase volume is about 80% travel related.

And how much of that is initiated in the U.S. versus a consumer making a reservation outside the United States?

I don’t have the exact number but it's probably in the 15% to 20% range, would be outside of the U.S.

Your next question comes from Tien-tsin Huang with JPMorgan.

Not sure if you covered this, just on the Australia, just wanted to get an update on sort of same store trends there and how new sales are performing versus planned?

Yes, they're meeting expectations. They are growing their portfolio as we have expected. They are going up market which is very positive. As I said earlier they're good at 90% of all the gas stations. So we've been working with them with our best practices and go to market strategies to go both direct after a larger fleet but also work through channels like some of the leasing companies which we're starting to sign and put in place in that marketplace. So we feel good about that core business and the growth of that business.

And it goes for the gift business to Mike?

The gift is having some pressure because of the American Dollar is weak compared to their dollar. So people are going online and buying some stuff online versus using gift cards in some of the retail stores which all the retailers are feeling. So we're seeing some of that impact in the marketplace but that's why we're also trying to diversify with those relationships into OTA and some of that business that we've talked about earlier.

Just one last quick one, just on the public sector side in the U.S., I know it's small for you but given some of the fiscal pressure, any chance of you seeing more RFPs or proposals out to do a little bit more in the way of fleet cards out there for the public sector?

Well we're always out there whenever there is an opportunity. These are usually long term contract cycles. So when they're up we're bidding and we're aggressive going after state business. We're very aggressive going after municipalities and other government entities, even below the state level. We continually look at other ways we can even expand with the federal government. So we are constantly working all aspects from small municipalities up to the federal government.

But it sounds like sort of normal course of proposals?

Yes, I mean, we renewed Georgia but we haven't signed any new ones of size since probably Florida when we announced that a little while back.

Your next question comes from Robert Napoli with William Blair.

Mike, when you talked about up market, are you only talking about Australia? You mentioned moving that market a few times.

Well we're already up market in the U.S. between our own proprietary card and our co-brands we have a very large market share in the U.S. market. So I'm really talking primarily Australia where we're trying to take some of those best practices and leverage kind of what we know we can do here into that marketplace knowing they have some of the same assets with the universal card and the capabilities to move that market more aggressively.

Okay, and then any update on the OTR market, how you're progressing there?

Yes, it's really a function of site coverage. So we're moving to get more site coverage and that will determine when we can really start to see more fleets sign up. There are some fleets on the program but it's not significant today. It really will be a function of kind of even starting in the U.S. the chicken and egg, when do you get enough merchants to start getting enough fleets. So we're making those investments, we're seeing good traction but that will be something we'll see later this year and the next quarter.

And when you say your coverage, what coverage do you need to get to and where are you at this point?

Yes, we pretty much have a little under 1,000 sites today accepting the card and we probably have to get in the 2,500 to 3,000 site range to really have good traction in that marketplace.

And you hope to get there by when?

Well we're saying that our goal is to start to see a reasonable level of merchant acceptance so we can start to ramp more of the sales by the end of the year, the first part of next year.

Okay. And then just on the deal front if you will, you guys had a shelf filing a week ago? Was that preparing that in case you do get involved with a larger transaction and obviously your leverage is becoming extremely low so you must expect that it's highly likely you're going to make a significant new investment during the course of 2012?

Yes, the leverage is obviously low. We've got over $500 million available to us on our current credit facility. I think we would put the shelf offering in the category of this being prepared in case the opportunity arises. When we made the filing and we put out that press release no specific plans to access it at all.

And just to be clear, you are not interest in Brazil. You are not involved in that process?

Well I don’t want to say we're not interested in Brazil. We know of the company, I won't go any further than that. We have our own strategic targets internationally and I would say that Brazil is one of them markets that we're actively looking at.

And then last question on same store sales, Mike and I don’t think, you're not seeing anything different than what you suggested, you probably thought you would see and looking at the 4% growth in gallons, 3.5% transaction, same store sales, but the U.S. economy does seem to be doing a little bit better and it just seems like same store sales should be positive and not negative. Do you know it is higher fuel efficiency more of a headwind that it has been in the past? Is the market more saturated? What is going on with same store sales? When do you expect it to be a 2% positive in an economy that's growing 2%?

Yes, I don’t think we have good data but I think there is no doubt with higher fuel prices, our business is doing whatever they can to conserve but they still have to fulfill their customer demand. Quite frankly that's where things like our Octane product or Telematics can play a role, let alone our core product. So I think that is a factor having some impact, when you're looking at low GDP growth and we're saying we're slightly down. So I think people are doing that and I think as people turn over vehicles, they're probably buying more efficient vehicles. So we're seeing a little bit of that impact, not major but I'm sure it's having an impact.

Yes, I don’t think we have good data but I think there is no doubt with higher fuel prices, our business is doing whatever they can to conserve but they still have to fulfill their customer demand. Quite frankly that's where things like our Octane product or Telematics can play a role, let alone our core product. So I think that is a factor having some impact, when you're looking at low GDP growth and we're saying we're slightly down. So I think people are doing that and I think as people turn over vehicles, they're probably buying more efficient vehicles. So we're seeing a little bit of that impact, not major but I'm sure it's having an impact.

So the long term organic growth, should we be thinking a little lower number than what we've thought in the past of for your core business unless you move into new faster growing markets.

I still think we feel comfortable in the mid-single digits, just depending on the economy overall.

I still think we feel comfortable in the mid-single digits, just depending on the economy overall.

I think the important thing to keep in mind even with this quarter is we've talked for a very long about 8% to 10% overall revenue growth when you exclude the price of fuel and we are at the high of that range this quarter. It didn’t come exactly where you might have expected it to come from but we're in the range. We're at the high end of that range.

Your last question comes from Doug Greiner with Compass Point.

Coming back to the Higher One agreement will you expand on the economics, how you benefit from that agreement?

Sure. Essentially the agreement is we will hold the deposits from the students, whatever is left over from their financial aid and we will be the official issuer of the credit card that they'll use to access those funds. So the agreement with Higher One is essentially any kind of revenue earned with those issuing capabilities as well as any of the expenses of running those operations is theirs to keep. What we get is a deposit and as I said we're expecting about $300 million to start an that could flex up in times when financial aid is kind of coming into students that can flex up pretty significantly and we get those deposits at a below market interest rate is how we're terming it.

Sure. Essentially the agreement is we will hold the deposits from the students, whatever is left over from their financial aid and we will be the official issuer of the credit card that they'll use to access those funds. So the agreement with Higher One is essentially any kind of revenue earned with those issuing capabilities as well as any of the expenses of running those operations is theirs to keep. What we get is a deposit and as I said we're expecting about $300 million to start an that could flex up in times when financial aid is kind of coming into students that can flex up pretty significantly and we get those deposits at a below market interest rate is how we're terming it.

There are no further questions.

Okay, thank you very much and thanks for joining us today and we'll talk to you again next quarter.

Okay, thank you very much and thanks for joining us today and we'll talk to you again next quarter.