INTL FCStone 2014 Annual Report Download - page 118

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INTL FCSTONE INC. Form 10K102
PART II
ITEM 8 Financial Statements and Supplementary Data
(in millions, except per share amounts)
For the 2013 Fiscal Quarter Ended
September 30 June 30 March 31 December 31
Total revenues $ 8,927.5 $ 9,659.1 $ 11,769.3 $ 12,137.5
Cost of sales of physical commodities 8,815.6 9,536.1 11,654.4 12,019.1
Operating revenues 111.9 123.0 114.9 118.4
Transaction-based clearing expenses 28.0 28.9 28.6 24.6
Introducing broker commissions 11.5 11.0 9.6 8.4
Interest expense 2.4 1.8 1.6 2.1
Net operating revenues 70.0 81.3 75.1 83.3
Compensation and other expenses 71.6 74.2 73.4 69.3
(Loss) income from continuing operations, before tax (1.6) 7.1 1.7 14.0
Income tax (benefit) expense (3.3) 2.0 — 3.9
Income from continuing operations 1.7 5.1 1.7 10.1
(Loss) income from discontinued operations, net of tax (0.5) (1.8) (0.2) 3.2
Net income $ 1.2 $ 3.3 $ 1.5 $ 13.3
Net basic earnings per share $ 0.05 $ 0.18 $ 0.08 $ 0.70
Net diluted earnings per share $ 0.04 $ 0.17 $ 0.08 $ 0.68
NOTE 22 Segment and Geographic Information
e Company reports its operating segments based on services
provided to customers. Commencing during the quarter ended
March 31, 2014, the Company’s operating segments were
reorganized into reportable segments as follows:
•
Commercial Hedging which includes Financial Agricultural
(Ag’s) & Energy (formerly discussed as the soft commodities
product line) and LME metals, previously components of
Commodity and Risk Management Services.
•
Global Payments, which was previously a component, along
with FX Prime Brokerage, of the Foreign Exchange segment,
has been broken out as the single component of a segment
named Global Payments.
•
Securities now includes Asset Management, previously a
component of Other, as an additional component along
with Equity market-making, Debt Trading and Investment
Banking.
•
Physical Commodities includes physical precious metals,
previously a component of Commodity and Risk Management
Services along with Physical Ag’s & Energy (formerly discussed
as the commodity financing and facilitation business),
previously a component of Other. In addition, physical
base metals, previously a component of Commodity and
Risk Management Services, is now reported as discontinued
operations, and is not part of the Physical Commodities
segment information.
•
Clearing and Execution Services now includes the FX Prime
Brokerage component as an additional component.
All segment information has been revised to reflect the operating
segment reorganization retroactive to October 1, 2012.
Commercial Hedging
e Company serves its commercial clients through its team
of risk management consultants, providing a high-value-added
service that we believe differentiates it from its competitors and
maximizes the opportunity to retain clients. e Company’s
risk management consulting services are designed to quantify
and monitor commercial entities’ exposure to commodity
and financial risk. Upon assessing this exposure the Company
develops a plan to control and hedge these risks with post-trade
reporting against specific client objectives. Clients are assisted in
the execution of their hedging strategies through a wide range
of products from listed exchange-traded futures and options, to
basic OTC instruments that offer greater flexibility, to structured
OTC products designed for customized solutions.
e Company’s services span virtually all traded commodity
markets, with the largest concentrations in agricultural and
energy commodities (consisting primarily of grains, energy and
renewable fuels, coffee, sugar, cotton, and food service) and base
metals. e Company’s base metals business includes a position
as a Category One ring dealing member of the LME, providing
execution, clearing and advisory services in exchange-traded futures
and OTC products. e Company also provides execution of
foreign currency forwards and options as well as a wide range
of structured product solutions to commercial clients who are
seeking cost-effective hedging strategies. Generally, clients direct
their own trading activity and the Company’s risk management
consultants do not have discretionary authority to transact trades
on behalf of clients.