INTL FCStone 2013 Annual Report Download - page 123

INTLFCSTONEINC.Form10K102
PART II
ITEM 8Financial Statements and Supplementary Data
e total amount of undistributed earnings in the Company’s
foreign subsidiaries, for income tax purposes, was $123.1 million
and $93.8 million as of September 30, 2013 and 2012, respectively.
It is the Company’s current intention to reinvest undistributed
earnings of its foreign subsidiaries in the foreign jurisdictions,
resulting in the indenite postponement of the remittance of
those earnings. Accordingly, no provision has been made for
foreign withholding taxes or U.S. federal income taxes which may
become payable if undistributed earnings of foreign subsidiaries
were paid as dividends to the Company.
e Company recognizes the tax benet from an uncertain tax
position only if it is more likely than not that the tax position will
be sustained on examination by the taxing authority, based upon
the technical merits of the position. e tax benet recognized
in the consolidated nancial statements from such a position
is measured based on the largest benet that has a greater than
50% likelihood of being realized upon ultimate settlement.
A reconciliation of the beginning and ending amount of unrecognized tax benets is as follows:
(in millions)
Year Ended September 30,
2013 2012 2011
Balance, beginning of year $ 0.5 $ 0.9 $ —
Gross increases for tax positions related to current year 0.1 — —
Gross increases for tax positions related to prior years — — 0.9
Gross decreases for tax positions of prior years (0.2) (0.1) —
Settlements (0.2) (0.1) —
Lapse of statute of limitations (0.1) (0.2) —
Balance, end of year $ 0.1 $ 0.5 $ 0.9
Included in the balance of uncertain tax benets as of September
30, 2013, is $0.1 million of tax benets that, if recognized, would
aect the eective tax rate. While it is expected that the amount of
unrecognized tax benets will change in the next twelve months, the
Company does not expect this change to have a material impact on
the results of operations or the nancial position of the Company.
Accrued interest and penalties are included in the related tax
liability line in the consolidated balance sheets. Accrued interest,
net of federal benet, and penalties included in the consolidated
balance sheets as of September 30, 2013 and 2012 was $0.0million
and $0.2 million, respectively.
e Company recognizes accrued interest and penalties related to
income taxes as a component of income tax expense. During 2013,
2012 and 2011, the amount of interest, net of federal benet,
and penalties recognized as a component of income tax expense
was $(0.2) million, $0.3 million and $0.2 million, respectively.
e Company and its subsidiaries le income tax returns with
the U.S. federal jurisdiction and various U.S. state and local and
foreign jurisdictions. e Company has open tax years ranging
from September 30, 2008 through September 30, 2013 with
U.S. federal and state and local taxing authorities. In the U.K.,
the Company has open tax years ending September 30, 2012 to
September 30, 2013. In Brazil, the Company has open tax years
ranging from December 31, 2008 through December 31, 2012.
In Argentina, the Company has open tax years ranging from
December 31, 2006 to September 30, 2013. e Internal Revenue
Service commenced an examination of the U.S. income tax return
for the scal year ended September 30, 2010. Additionally, INTL
FCStone is under state examinations for various periods, ranging
from September 2009 through September 30, 2012. ere are
no examinations taking place in foreign jurisdictions.
NOTE 19 Acquisitions and Disposals
Acquisitions in Fiscal 2013
e Company’s consolidated nancial statements include the
operating results of the acquired businesses from the dates of
acquisition. e total amount of goodwill and intangible assets, in
connection with these acquisitions, that is expected to be deductible
for tax purposes is $5.6 million as of September 30, 2013.
First American Capital and Trading Corp.
On May 3, 2013, the Company reached an agreement in which
First American Capital and Trading Corp. (“FACT”), has agreed
to transfer its customer accounts to INTL FCStone Inc.’s broker-
dealer subsidiary, INTL FCStone Securities Inc. Completion
of this transaction is subject to certain conditions, including
regulatory approval. FACT provides correspondent clearing services
to institutional customers directly and through a global network of
partners. FACT services a wide range of customers, including broker-
dealers, investment advisors, and fund managers. e Company
completed this transaction in the rst quarter of scal 2014.