INTL FCStone 2011 Annual Report Download - page 95

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INTL FCSTONE INC.Form10K 81
PART II
ITEM 8 Consolidated Financial Statements and Supplementary Data
FCStone Merchant Services,LLC (“FCStone Merchant Services”)
is entitled to borrow up to $50million to fund forward contracts
on speci ed commodities. e forward contract commodity
transactions include a simultaneous agreement from the lender
to purchase specifi ed commodities from FCStone Merchant
Services and to sell the same specifi ed commodities to FCStone
Merchant Services, on a forward sale basis. e price at which
FCStone Merchant Services will be obligated to repurchase the
specifi ed commodities from lender is calculated as the purchase
price plus accrued interest on the purchase price at the cost of
funds rate determined by the lender, which was 2.13% as of
September30,2011. e facility is guaranteed by the Company.
Credit facilities and outstanding borrowings, including subordinated debt, as of September30,2011 and 2010 were as follows:
(in millions)
Security Renewal/Expiration Date
Total
Commitment
Amounts Outstanding
September30,
2011
September30,
2010
Certain pledgedshares October1,2013 $ 85.0 $ — $ —
Certain foreign exchange assets Terminated October2010 — — 12.5
Certain pledgedshares Terminated October2010 — — 11.9
Certain commodities assets September20,2012 140.0 60.0 90.5
None June18,2012 75.0 — —
Certain commodities assets October9,2012 75.0 15.5 —
Certain forward commodity contracts n/a — 1.9 —
None Terminated December2010 — — 0.5
$ 375.0 $ 77.4 $ 115.4
During fi scal2012, $215million of the Company’s committed credit facilities are scheduled to expire. While there is no guarantee
that the Company will be able to renew or replace current agreements when they expire, based on a strong liquidity position and
capital structure the Company believes it will be able to do so.
NOTE 13 Convertible Subordinated Notes
The Company had $16.7million in aggregate principal
amount of the Company’s senior subordinated convertible
notes due September2011 (the “Notes”) outstanding as of
September30,2010. e Notes were general unsecured obligations
of the Company and bore interest at the rate of 7.625%per
annum, payable quarterly in arrears.
During the fi scal year ended September30,2011, the Notes
were converted along with accrued interest of $0.2million into
778,703shares of common stock of the Company.
NOTE 14 Commitments and Contingencies
Legal Proceedings
Certain conditions may exist as of the date the fi nancial statements
are issued, which may result in a loss to the Company but which
will only be resolved when one or more future events occur or
fail to occur. e Company assesses such contingent liabilities,
and such assessment inherently involves an exercise of judgment.
In assessing loss contingencies related to legal proceedings that
are pending against the Company or unasserted claims that may
result in such proceedings, the Company’s legal counsel evaluates
the perceived merits of any legal proceedings or unasserted claims
as well as the perceived merits of the amount of relief sought or
expected to be sought therein.
If the assessment of a contingency indicates that it is probable
that a material loss had been incurred at the date of the fi nancial
statements and the amount of the liability can be estimated, then
the estimated liability would be accrued in the Company’s fi nancial
statements. If the assessment indicates that a potentially material
loss contingency is not probable, but is reasonably possible, or
is probable but cannot be estimated, then the nature of the
contingent liability, together with an estimate of the range of
possible loss if determinable and material, would be disclosed.
Neither accrual nor disclosure is required for loss contingencies
that are deemed remote. We accrue legal fees related to contingent
liabilities as they are incurred.
In addition to the matters discussed below, from time to time
and in the ordinary course of business, we are involved in various
legal actions and proceedings, including tort claims, contractual
disputes, employment matters, workers’ compensation claims
and collections. We carry insurance that provides protection