INTL FCStone 2011 Annual Report Download - page 51

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INTL FCSTONE INC.Form10K 37
PARTII
ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations
(in millions)
Year Ended September30,
2011
%
Change 2010
%
Change 2009
Adjusted net contribution (non-GAAP) 221.1 65% 134.1 118% 61.4
Non-variable direct expenses 95.6 52% 63.1 212% 20.2
ADJUSTED NET SEGMENT INCOME (NON-GAAP)$125.5 77% $ 71.0 72% $ 41.2
Reconciliation of C&RM net contribution from GAAP to adjusted,
non-GAAP numbers:
Total C&RM net contribution $ 151.6 $ 70.9 $ 10.1
Gross marked-to-market adjustment (non-GAAP) (8.4) 6.0 6.9
C&RM ADJUSTED NET CONTRIBUTION (NON-GAAP)$143.2 $ 76.9 $ 17.0
Reconciliation of C&RM segment income from GAAP to adjusted,
non-GAAP numbers:
Total C&RM segment income $ 93.5 $ 32.8 $ 1.7
Gross marked-to-market adjustment (non-GAAP) (8.4) 6.0 6.9
C&RM ADJUSTED SEGMENT INCOME (NON-GAAP)$85.1 $ 38.8 $ 8.6
Reconciliation of total operating revenues from GAAP to adjusted,
non-GAAP numbers:
Total operating revenues $ 423.2 $ 269.0 $ 90.6
Gross marked-to-market adjustment (non-GAAP) (8.4) 6.0 6.9
Operating revenue not assigned to a segment (0.4) (0.2) 1.4
ADJUSTED SEGMENT OPERATING REVENUES
(NON-GAAP)$414.4 $ 274.8 $ 98.9
Reconciliation of net contribution from GAAP to adjusted,
non-GAAP numbers:
Total net contribution $ 229.5 $ 128.1 $ 54.5
Gross marked-to-market adjustment (non-GAAP) (8.4) 6.0 6.9
ADJUSTED NET CONTRIBUTION (NON-GAAP)$221.1 $ 134.1 $ 61.4
Reconciliation of segment income from GAAP to adjusted,
non-GAAP numbers:
Total net segment income $ 133.9 $ 65.0 $ 34.3
Gross marked-to-market adjustment (non-GAAP) (8.4) 6.0 6.9
ADJUSTED NET SEGMENT INCOME (NON-GAAP)$125.5 $ 71.0 $ 41.2
2011 vs. 2010 Segment Analysis
e net contribution of all the Company’s business segments
increased 79% to $229.5million in 2011 as compared to
$128.1million in 2010. e adjusted net contribution of all the
Company’s business segments increased 65% to $221.1million
in 2011 as compared with $134.1million in 2010.
Net contribution is one of the key measures used by management
to assess the performance of each segment and for decisions
regarding the allocation of the Company’s resources. Net
contribution is calculated as revenue less direct cost of sales,
interest expense, clearing and related expenses, introducing broker
commissions and variable compensation. Variable compensation
paid to risk management consultants and traders generally
represents a fi xed percentage of an amount equal to revenues
generated, and in some cases, revenues produced less clearing
and related charges, base salaries and an overhead allocation.
To t al s e g me n t i nc o me w a s $1 3 3 . 9m i l l io n i n 2 01 1 , c om p a re d
with $65.0million in 2010. Total adjusted segment income was
$125.5million in 2011, compared with $71.0million in 2010.
Segment income is calculated as net contribution less non-
variable direct expenses of the segment. ese non-variable
direct expenses include trader base compensation and benefi ts,
operational employee compensation and benefi ts, communication
and data services, business development, professional fees, bad
debt expense, trade errors and direct marketing expenses.
Commodity and Risk Management Services– Operating
revenues under U.S. GAAP increased from $129.8million in
2010 to $252.6million in 2011. Adjusted operating revenues
increased by 80% from $135.8million in 2010 to $244.2million
in 2011. Operating revenues within this segment are primarily
driven by the soft commodities, precious metals and base metals
product lines.