INTL FCStone 2012 Annual Report Download - page 116
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Please find page 116 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.Form10K100
PART II
ITEM 8 Financial Statements and Supplementary Data
Aporte DTVM
In February2012, the Company’s subsidiaries, INTL Participacoes
LTDA and FCStone do Brasil, acquired 100% of the shares of
Aporte DTVM. Following the acquisition, Aporte DTVM was
renamed INTL FCStone DTVM Ltda. INTL FCStone DTVM
is based in Brazil and is a broker-dealer regulated by the Central
Bank of Brazil. e purchase price for the acquisition of the shares
of Aporte DTVM was $1.5 million. ere are no additional
payments remaining for this acquisition. e value of certain
assets and liabilities are preliminary in nature, and are subject to
adjustment as additional information is obtained, including but
not limited to the valuation of separately identi able intangible
assets, if applicable. e goodwill recognized in this transaction
was assigned to the C&RM segment. Purchase costs allocated
to goodwill of $0.8 million was calculated as the excess of the
fair value of the consideration transferred over the fair value of
the identi ed net assets acquired and liabilities assumed, and
is expected to be deductible for tax purposes. ese areas are
subject to change within the measurement period as valuations
are nalized. When the valuations are nalized, any changes to
the preliminary valuation of assets acquired or liabilities assumed
may result in adjustments to separately identi able intangible
assets and goodwill.
Acquisitions in 2011
During scal year 2011, the Company acquired two businesses,
Hencorp Futures and Ambrian Commodities Limited, and
certain assets from Hudson Capital Energy, LLC, which were
not considered signi cant on an individual or aggregate basis.
e Company’s consolidated nancial statements include the
operating results of the two businesses and certain purchased
assets from the dates of acquisition.
e total amount of goodwill and intangible assets, in connection
with these acquisitions, that is deductible for tax purposes was
$4.9 million as of September30, 2011.
Hencorp Futures
In October2010, the Company acquired all of the ownership
interests in Hencorp Futures, the commodity futures operation
of Miami-based Hencorp Group. Hencorp Futures specializes in
the development and execution of risk-management programs
designed to hedge price volatility in a number of widely traded
commodities, including co ee, sugar, cocoa, grains and energy
products. e transaction will enable the Company to round out
its portfolio of commodity risk management services to include
a more robust capability in soft commodities, especially co ee,
where Hencorp Futures has established a substantial presence and
reputation globally, and especially in Central and South America.
e purchase price of the Hencorp Futures acquisition consisted
of an initial payment of $2.3 million, two payments totaling $1.4
million and representing the adjusted tangible equity of Hencorp
Futures as of September30, 2011, an amount due of $0.3 million
based on the adjusted pre-tax net earnings of Hencorp Futures
for the scal year ended September30, 2011, three additional
annual contingent payments and a nal contingent payment.
See Note11 for discussion of the contingent payments. e
present value of the estimated total purchase price, including
contingent consideration, is $6.4 million.
e Company obtained a third-party valuation of the intangible
assets and contingent liabilities, and allocated the purchase
costs among tangible assets, identi ed intangible assets with
determinable useful lives, intangible assets with inde nite lives
and goodwill. e intangible assets and goodwill recognized in
this transaction were assigned to the C&RM segment. Purchase
costs allocated to intangible assets with determinable useful lives
are $1.7 million, which are being amortized over the remaining
useful lives of the assets, and include customer relationships of
$1.3 million (twenty -year weighted-average useful life) and
non-compete agreements of $0.4 million (two -year weighted-
average useful life). Purchase costs allocated to intangible assets
with inde nite lives are $0.8 million, and relate to a trade name.
See discussion in Note9 for discussion of the impairment of
the Hencorp Futures trade name during the scal year ended
September30, 2012. Goodwill of $2.1 million was calculated as
the excess of the fair value of the consideration transferred over
the fair value of the identi ed net assets acquired and liabilities
assumed, and is expected to be deductible for tax purposes.
During 2012, Hencorp Futures was reorganized as a division
of FCStone, LLC.
Certain Asset Purchased from Hudson Capital
Energy, LLC
In April2011, the Company acquired certain assets from Hudson
Capital Energy LLC (“HCEnergy”), a New York-based energy
risk-management rm. e transaction enables the Company’s
energy risk management services to include a more robust
capability in crude oil and re ned products. HCEnergy is a
specialist in exchange cleared options, swaps and futures, and has
grown its business to include hedging and trading professionals
across the spectrum of global petroleum products.
e purchase price of the acquisition of certain assets from
HCEnergy consisted of the aggregate net asset value of certain
commodity futures brokerage accounts and certain proprietary
software, totaling $1.0 million. ere was no contingent
consideration associated with this transaction.
e Company has made an allocation of the purchase costs
among tangible assets. ere were no intangible assets or goodwill
recognized in this transaction.
Ambrian Commodities Limited
In August2011, the Company’s wholly owned subsidiary in the
United Kingdom, INTL Global Currencies Limited, acquired
the issued share capital of Ambrian Commodities Limited
(“Ambrian”), the London Metals Exchange brokerage subsidiary