Question-and-Answer Session
Operator
Our first question comes from the line of Tien-Tsin Huang - JP Morgan Chase.
Tien-Tsin Huang - JP Morgan Chase
Good morning. Great results. I’ll start with the losses. Losses were better than we expected. It sounds like you’ve got some visibility into losses, stated losses to the high end of your historical range, Melissa, for the year. What’s your confidence level there? What kind of visibility do you have going into the second half?
Melissa Smith
All I can say is, if we look at the trends they’ve been, again, consistent with what we’ve seen historically over obviously a broader period of time. Both the first quarter and the second quarter have come in really dead-on what we had anticipated and so that’s increased our level of confidence of our ability to predict this even in the market that we’re in right now.
Overall, we’re feeling pretty good about the year coming in, again, the high-end of that 11 to 22 or slightly above that.
Tien-Tsin Huang - JP Morgan Chase
Can you remind us of the historical seasonality and charge-offs that you’ve seen or losses that you’ve seen in 3Q and 4Q?
Melissa Smith
Typically, we’ve seen some pretty dramatic swings. And you can see that even in Q2 compared to last year.
Tien-Tsin Huang - JP Morgan Chase
All right.
Melissa Smith
Q3 has traditionally been lower than Q4, and I’d say this year, we haven’t seen the same seasonality impact that we’ve seen in most years. There is definitely some volatility quarter-to-quarter; we’ve seen that since we’ve been public.
Tien-Tsin Huang - JP Morgan Chase
Got it. Then any update on your thinking on the fuel hedge, specifically with the timing and where the new hedge could get struck today?
Michael Dubyak
We will do a hedge in the third quarter. I’m not going to comment on when exactly we’ll execute the hedge.
Melissa Smith
If we look at the hedge right now, as the prices in 2010 are around $3.60, that’s excluding diesel.
Tien-Tsin Huang - JP Morgan Chase
Got it. Given your negotiations on the discount and the hybrid pricing, is that going to require some change in the form of how you strike those hedges, for example, the 90%, which you typically hedge to?
Melissa Smith
We had anticipated, even in the hedges that we’ve purchased, that we would be moving more to these hybrid prices, and so, we’ve been factoring that into the amounts that we’ve purchased overtime.
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