INTL FCStone 2011 Annual Report Download - page 8

The MF team is a leading LME franchise with
deep and diverse global relationships which,
when combined with our existing and signi cant
physical metals, structured OTC products and
corporate  nance advisory services, creates a
unique global metals capability. Concurrently
with this acquisition, INTL FCStone also received
approval from the London Metal Exchange to
upgrade its LME Category Two membership to LME
Category One ring dealing membership.
Our strategy is sound and our course is clear;
we have no pressure or desire to deviate from
this path. Indeed, in our view, our strategy and
service model has become increasingly relevant
and useful to our predominantly middle-market
commercial customer base. These customers
are facing, almost without exception, an
unprecedented set of operating challenges
characterized by a di cult lending environment,
uncertain capital markets, volatile commodity
prices, weak consumer demand and a lingering
global recession. At the same time, many  nancial
services organizations, ranging from banks to
FCMs, lack the resources, the capabilities or the
long-term commitment to assist middle-market
companies in dealing with these operating
challenges.
I am grati ed to note that by the end of the 2011
 scal year, we had managed to make substantial
progress toward integrating our acquisitions and
expanding our capabilities while, at the same time,
coming close to achieving all of our own  nancial
objectives established two years ago. As a result,
we  nd ourselves at the start of the 2012  scal year
in a stronger position than ever before to help our
customers meet their bottom-line goals, gain new
business in new markets worldwide, and deliver
positive  nancial results.
Our Financial Performance
Management believes that the best way to assess
our  nancial performance is on a fully marked-
to-market basis. Our Form 10-K, included in this
Annual Report, provides a detailed reconciliation
of these numbers.
During  scal 2011, we began to reap the bene ts
of the acquisitions and upgrades we made during
the past two  scal years. While we are encouraged
by the results to date, we anticipate even further
growth in the new  scal year as a result of the
cross-selling opportunities and synergies created
by our recently acquired operating units.
Fiscal 2011 adjusted operating revenues, marked-
to-market, were $414.8 million. This number
represents not only a 51% increase over the prior
year, but the culmination of an unbroken pattern
of revenue growth since 2006, augmented in  scal
2010 and thereafter by the merger with FCStone.
Adjusted net income attributable to INTL FCStone
common stockholders grew to $32.1 million, also a
new record and a $23.0 million, or 253%, increase
over  scal 2010.
INTL FCStone’s return on average adjusted
stockholders’ equity (“ROE”), one of our key
 nancial metrics, was 11.6%, a result that we
consider to be favorable, though not yet in line
with our corporate objectives. In the coming
years, it is our goal and intention to achieve an ROE
of 15% to 20% or more.
At $352.4 million, our non-interest expenses
increased signi cantly, due primarily to our post-
merger acquisitions and the associated o ce,
personnel, IT and other infrastructure costs. As we
continue to consolidate our recent acquisitions,
we will place continued emphasis on managing
and minimizing expenses where possible. Interest
expense for  scal 2011 was $11.3 million.
At the end of  scal 2011, INTL FCStone had
18.6 million shares outstanding, with a market
capitalization of $387.0 million. Book value per
outstanding share on an adjusted basis was
$16.17, up 13% from last year’s value of $14.31 and
up 14% from the value of two years ago of $14.16.
We concluded the year with adjusted shareholders’
equity of $301.7 million, and total assets of $2.6
billion, compared to $2.0 billion the previous year.
We remain very liquid, with approximately 83%
of the company’s assets in cash; and deposits and
7 | 2011 INTL FCStone Annual Report
Our strategy is sound and
our course is clear; we have
no pressure or desire to
deviate from this path.