INTL FCStone 2012 Annual Report Download - page 22
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Please find page 22 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.Form10K6
PART I
ITEM 1 Business
investments in funds and proprietary accounts managed either
by the Company’s investment managers or by independent
investment managers.
e Company operates a commodity nancing and facilitation
business that makes loans to commercial commodity-related
companies against physical inventories, including grain, lumber,
meats, energy products and renewable fuels. Sale and repurchase
agreements are used to purchase commodities evidenced by
warehouse receipts, subject to a simultaneous agreement to sell
such commodities back to the original seller at a later date. ese
transactions are accounted for as product nancing arrangements,
and accordingly no commodity inventory, purchases or sales are
recorded. Additionally, the Company, as a principal, engages in
physical purchase and sale transactions related to inputs to the
renewable fuels and feed ingredient industries.
Acquisitions made in the 2012 Fiscal Year
During scal year 2012, the Company acquired three businesses
(Co ee Network, TRX Futures Limited and Aporte DTVM)
and certain assets of the Metals Division of MF Global UK
Limited. ese acquisitions were not considered signi cant on
an individual or aggregate basis. e Company’s consolidated
nancial statements include the operating results of the acquired
businesses from the dates of acquisition.
e Metals Division of MF Global UK
Limited
On November 2011, the Company arranged with the trustee of
MF Global’s UK operations to hire more than 50 professionals
from MF Global’s metals trading business based in London.
is business serves institutional investors and nancial services
rms in the Americas, Europe and the Asia-Paci c region. e
Company allocated equity capital to its subsidiary, INTL FCStone
(Europe) Ltd. to integrate these brokers and their customers into
the Company’s operations, through a combination of increased
regulatory capital to support the accounts of these customers
and increased compensation and related personnel costs for
the brokers. e amount of the required capital depends upon
the activity in and balances of the customer accounts. As part
of this transaction, INTL FCStone (Europe) Ltd. upgraded its
LME Category Two membership to a LME Category One ring
dealing membership.
Coff ee Network
In November 2011, the Company entered into an agreement
to acquire 100% of the ownership interests in Co ee Network
LLC (“ Co ee Network” ), an online news and analysis portal for
the global co ee industry. Co ee Network provides up-to-the-
minute news and in-depth analysis to subscribers around the
globe from a network of correspondents and commodity analysts
located in key co ee producing and consuming regions. ese
services provide a unique information solution to subscribers
and a competitive advantage in today’s information-driven
marketplace which the Company intends to expand into other
commodity markets. Following the acquisition, the activities of
Co ee Network were reorganized as a division of FCStone, LLC.
TRX Futures Limited
In April 2012, the Company’s wholly-owned subsidiary in
the UK, INTL Holding (UK) Limited, acquired 100% of the
outstanding shares of TRX Futures Limited (“ TRX” ) from
Neumann Grupe GmbH. TRX is a London-based niche clearing
rm for commercial co ee and cocoa customers, as well as energy
and nancial products. Subsequent to September 30, 2012, the
activities of TRX Futures Limited have been reorganized within
INTL FCStone (Europe), and TRX is in the process of dissolution.
Aporte DTVM
In February 2012, 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
Ltda. is based in Brazil and is a broker-dealer regulated by the
Central Bank of Brazil.
Acquisitions made in the 2011 Fiscal Year
During scal year 2011, the Company acquired two businesses,
Hencorp Becstone Futures, L.C. and Ambrian Commodities
Limited, and certain assets from Hudson Capital Energy, LLC.
ese acquisitions 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 related dates of acquisition.
Hencorp Futures
In October, 2010, we acquired Hencorp Becstone Futures, L.C.,
the futures operation of Miami-based Hencorp Group, which
was renamed INTL Hencorp Futures, LLC (“Hencorp Futures”).
Hencorp Futures specializes in the development and execution of
risk-management programs designed to hedge price volatility in