INTL FCStone 2012 Annual Report Download - page 102
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Please find page 102 of the 2012 INTL FCStone annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.INTL FCSTONE INC.Form10K86
PART II
ITEM 8 Financial Statements and Supplementary Data
consolidated balance sheets. e present value of the estimated
total purchase price, including contingent consideration, was
$51.6 million as of September30, 2011.
e Company has a contingent liability relating to the April2010
acquisition of the RMI Companies, subsequently reorganized
as divisions of FCStone, LLC, which may result in the payment
of additional consideration, see Note18 for discussion of
the acquisition. e acquisition date fair value of additional
consideration was estimated to be $10.7 million. e contingent
liability recorded represents the fair value of expected consideration
to be paid based on the forecasted sales during the twelve month
period ending March31, 2013, and a discount rate being applied
to this future payment. e Company expects to make a cash
payment of $3.1 million in scal 2013 related to this contingent
liability. e change in fair value for the years ended September30,
2012 and 2011 were decreases of $28 thousand and $1.5 million,
respectively, included within ‘other’ in the consolidated income
statements. e present value of the estimated total purchase
price, including contingent consideration, is $15.1 million as of
September30, 2012, of which $2.9 million has not been paid
and is included within ‘accounts payable and other accrued
liabilities’ in the consolidated balance sheets. e present value
of the estimated total purchase price, including contingent
consideration, was $15.2 million as of September30, 2011.
The Company has a contingent liability relating to the
February2008 acquisition of Globecot, Inc. Under the terms
of the purchase agreement, the Company has an obligation to
pay additional consideration if speci c conditions and earnings
targets are met in the twelve-month period ending January31,
2013. As a result of the Company’s acquisition of FCStone
Group, Inc. and subsidiaries (the “FCStone transaction”), e ective
September30, 2009, any additional consideration would be
considered an adjustment to a pre-acquisition contingency,
made after the end of the allocation period, and included in
earnings in the current period. As of September30, 2012, no
accrual has been recorded related to this contingent liability,
and the additional consideration is limited to $0.4 million for
the twelve-month period.
Operating Leases
e Company is obligated under various noncancelable operating
leases for the rental of o ce facilities, aircraft, automobiles, service
obligations and certain o ce equipment, and accounts for these
lease obligations on a straight line basis. e expense associated
with operating leases amounted to $8.9 million, $7.2 million
and $5.5 million, for scal years ended 2012, 2011 and 2010,
respectively. e expenses associated with the operating leases
and service obligations are reported in the consolidated income
statements within occupancy and equipment rental, clearing
and related and other expenses.
Future aggregate minimum lease payments under noncancelable operating leases as of September30, 2012 are as follows:
(in millions)
Year ending September30,
2013 $ 7.1
2014 6.1
2015 4.9
2016 5.7
2017 6.3
ereafter 9.3
$ 39.4
Purchase Commitments
e Company determines an estimate of contractual purchase
commitments in the ordinary course of business primarily for
the purchase of precious and base metals. Unpriced contract
commitments have been estimated using September30, 2012
fair values. e purchase commitments and other obligations
as of September30, 2012 for less than one year, one to three
years, three to ve years and after ve years were $635.5 million,
$6.1 million, $3.3 million and $2.4 million, respectively.
Exchange Member Guarantees
e Company is a member of various exchanges that trade and
clear futures and option contracts. Associated with its memberships,
the Company may be required to pay a proportionate share of the
nancial obligations of another member who may default on its
obligations to the exchanges. While the rules governing di erent
exchange memberships vary, in general the Company’s guarantee
obligations would arise only if the exchange had previously
exhausted its resources. In addition, any such guarantee obligation
would be apportioned among the other non-defaulting members
of the exchange. Any potential contingent liability under these
membership agreements cannot be estimated. e Company has
not recorded any contingent liability in the consolidated nancial
statements for these agreements and believes that any potential
requirement to make payments under these agreements is remote.