INTL FCStone 2012 Annual Report Download - page 63
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Please find page 63 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.Form10K 47
PART II
ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations
Certain other non-U.S. subsidiaries of the Company are also
subject to capital adequacy requirements promulgated by
authorities of the countries in which they operate.
Excluding INTL FCStone DTVM, all other subsidiaries of the
Company are in compliance with all of their capital regulatory
requirements as of September30, 2012. Additional information
on these net capital and minimum net capital requirements can be
found within Note 12 of the Consolidated Financial Statements.
Cash Flows
The Company’s cash and cash equivalents increased from
$220.6 million as of September30, 2011 to $236.3 million as
of September30, 2012, a net increase of $15.7 million. Net cash
of $92.1 million was used in operating activities, $20.0 million
was used in investing activities and net cash of $129.0 million
was provided by nancing activities, of which $140.8 million was
borrowed on lines of credit and increased the amounts payable to
lenders under loans and overdrafts, $9.6 million was paid out as
earn-outs on acquisitions and $4.0 million was used to repurchase
shares. Fluctuations in exchange rates caused a reduction of $1.2
million to the Company’s cash and cash equivalents.
In the commodities industry, companies report trading activities
in the operating section of the statement of cash ows. Due to
the daily price volatility in the commodities market, as well as
changes in margin requirements, uctuations in the balances
of deposits held at various exchanges, marketable securities and
customer commodity accounts may occur from day-to-day. A
use of cash, as calculated on the consolidated statement of cash
ows, includes unrestricted cash transferred and pledged to the
exchanges or guarantee funds. ese funds are held in interest-
bearing deposit accounts at the exchanges, and based on daily
exchange requirements, may be withdrawn and returned to
unrestricted cash. Additionally, within our unregulated OTC
and Forex operations, cash deposits received from customers are
re ected as cash provided from operations. Subsequent transfer
of these cash deposits to counterparties or exchanges to margin
their open positions will be re ected as an operating use of cash
to the extent the transfer occurs in a di erent period than the
cash deposit was received.
e Company is continuously evaluating opportunities to expand
its business. During 2012, the Company paid $11.7 million,
included in investing activities, for acquisitions, and $9.6 million
in payments, included in nancing activities, relating to earn-
outs on acquisitions. See Note 18 to the Consolidated Financial
Statements for additional information on acquisitions. Capital
expenditures included in investing activities for property, plant and
equipment totaled $8.7 million in 2012, decreasing slightly from
$10.1 million in 2011. Continuing expansion of the Company’s
activities will require funding and will have an e ect on liquidity.
On August 12, 2011, the Company’s Board of Directors authorized
the repurchase of up to 1.0 million shares of the Company’s
outstanding common stock. During year ended September30,
2012, the Company repurchased 217,507 shares of its outstanding
common stock in open market transactions, in the aggregate
amount of $4.0 million.
On November 15, 2012, the Company’s Board of Directors replaced
the August 12, 2011 authorized repurchase of up to 1.0 million
shares of its outstanding common stock with an authorization to
repurchase up to 1.5 million shares of its outstanding common
stock from time to time in open market purchases and private
transactions, subject to the discretion of the senior management
team to implement the Company’s stock repurchase plan, and
subject to market conditions and as permitted by securities laws
and other legal and regulatory requirements.
Apart from what has been disclosed above, there are no known
trends, events or uncertainties that have had or are likely to have
a material impact on the liquidity, nancial condition and capital
resources of the Company.
Contractual Obligations
e following table summarizes our cash payment obligations as of September30, 2012:
(in millions)
Total
Payments Due by Period
Less than 1 year 1 - 3 Years 3 - 5 Years After 5 Years
Operating lease obligations $ 39.4 $ 7.1 $ 11.0 $ 12.0 $ 9.3
Purchase obligations(1) 630.2 630.2 — — —
Contingent acquisition consideration 16.6 13.8 0.4 2.4 —
Other 17.1 5.3 6.1 3.3 2.4
$ 703.3 $ 656.4 $ 17.5 $ 17.7 $ 11.7
(1) Represents 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.
Total contractual obligations exclude de ned bene t pension
obligations. In 2013, we anticipate making contributions of
2.5 million to de ned bene t plans. Additional information
on the funded status of these plans can be found in Note 15 of
the Consolidated Financial Statements.
Based upon our current operations, we believe that cash ow from
operations, available cash and available borrowings under our
credit facilities will be adequate to meet our future liquidity needs.