INTL FCStone 2014 Annual Report Download - page 114

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INTL FCSTONE INC. Form 10K98
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 $175.1 million
and $123.1 million as of September 30, 2014 and 2013,
respectively. It is the Company’s current intention to reinvest
undistributed earnings of its foreign subsidiaries in the foreign
jurisdictions, resulting in the indefinite 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 benefit 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 benefit recognized
in the consolidated financial statements from such a position
is measured based on the largest benefit that has a greater than
50% likelihood of being realized upon ultimate settlement.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
(in millions)
Year Ended September 30,
2014 2013 2012
Balance, beginning of year $ 0.1 $ 0.5 $ 0.9
Gross increases for tax positions related to current year — 0.1 —
Gross increases for tax positions related to prior years — — —
Gross decreases for tax positions of prior years (0.1) (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
e Company has a minimal balance of uncertain tax benefits
as of September 30, 2014, that, if recognized, would affect
the effective tax rate. While it is expected that the amount of
unrecognized tax benefits 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 financial position of
the Company.
Accrued interest and penalties are included in the related tax
liability line in the consolidated balance sheets. e Company
had no accrued interest, net of federal benefit, and penalties
included in the consolidated balance sheets as of September 30,
2014 and 2013.
e Company recognizes accrued interest and penalties related
to income taxes as a component of income tax expense. e
Company had no amount of interest, net of federal benefit,
and penalties recognized as a component of income tax expense
during the year ended September 30, 2014. During the years
ended September 30, 2013 and 2012, the amount of interest,
net of federal benefit, and penalties recognized as a component
of income tax expense was $(0.2) million and $0.3 million,
respectively.
e Company and its subsidiaries file 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, 2014 with
U.S. federal and state and local taxing authorities. In the U.K.,
the Company has open tax years ending September 30, 2013 to
September 30, 2014. In Brazil, the Company has open tax years
ranging from December 31, 2009 through December 31, 2013.
In Argentina, the Company has open tax years ranging from
December 31, 2007 to September 30, 2013. e Internal Revenue
Service commenced an examination of the U.S. income tax return
for the fiscal year ended September 30, 2010. Additionally,
INTL FCStone is under state examinations for various periods,
ranging from September 2010 through September 30, 2014.
ere are no examinations taking place in foreign jurisdictions.
NOTE 18 Acquisitions and Disposals
Acquisitions in Fiscal 2014
e Company’s consolidated financial 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 the current year acquisition, that is expected to be
deductible for tax purposes is $0.5 million as of September 30, 2014.
Forward Insight Commodities LLC
In an acquisition agreement dated April 2, 2014, the Company’s
wholly owned subsidiary, FCStone Group, Inc. (“FCG”), agreed
to acquire all of the outstanding member interests of Forward
Insight Commodities, LLC (“FIC”). FIC is a brokerage firm
focused on the structuring and execution of transactions in the
energy derivative space.