INTL FCStone 2014 Annual Report Download - page 59

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INTL FCSTONE INC. Form 10K 43
PART II
ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations
e following table provides the financial performance for Physical Commodities for the periods indicated.
(in millions)
Year Ended September 30,
2014 % Change 2013 % Change 2012
Operating revenues $ 20.6 (23)% $ 26.8 40% $ 19.1
Transaction-based clearing expenses 0.6 (14)% 0.7 40% 0.5
Introducing broker commissions 0.4 100% 0.2 —% 0.2
Interest expense 1.7 (32)% 2.5 25% 2.0
Net operating revenues 17.9 (24)% 23.4 43% 16.4
Variable direct compensation and benefits 3.8 (36)% 5.9 23% 4.8
Net contribution 14.1 (19)% 17.5 51% 11.6
Non-variable direct expenses 8.2 9% 7.5 17% 6.4
Segment income $ 5.9 (41)% $10.0 92% $ 5.2
e following tables set forth operating revenue by product line and selected data for Physical Commodities for the periods indicated.
Precious Metals
Year Ended September 30,
2014 % Change 2013 % Change 2012
Total revenues $ 31,142.5 (25)% $ 41,746.7 (37)% $ 66,135.7
Cost of sales of physical commodities 31,131.4 (25)% 41,731.7 (37)% 66,124.6
Operating revenues $ 11.1 (26)% $ 15.0 35% $ 11.1
Selected data:
Gold equivalent ounces traded (000’s) 79,127.1 (15)% 93,256.8 (28)% 129,140.1
Average revenue per ounce traded $ 0.14 (13)% $0.16 78% $ 0.09
Physical Ag’s & Energy
Year Ended September 30,
2014 % Change 2013 % Change 2012
Total revenues $ 337.7 11% $ 305.3 138% $ 128.5
Cost of sales of physical commodities 328.2 12% 293.4 143% 120.6
Operating revenues $ 9.5 (20)% $ 11.9 51% $ 7.9
For information about the assets of this segment, see Note 22 to the Consolidated Financial Statements.
Year Ended September 30, 2014 Compared to
Year Ended September 30, 2013
Operating revenues decreased 23% to $20.6 million in fiscal
2014 compared to $26.8 million in fiscal 2013.
Precious metals operating revenues decreased 26% to $11.1 million
in fiscal 2014 compared to $15.0 million in fiscal 2013. e
decline in operating revenues is a result of a 15% decrease in the
number of ounces traded, primarily in the Far Eastern markets,
as well as a decline in the average revenue per ounce traded.
Operating revenues in the physical agricultural and energy
commodity product line decreased 20% to $9.5 million in fiscal
2014 compared to $11.9 million in fiscal 2013. e decrease
in operating revenues is primarily due to a decline in customer
volumes as a result of market conditions.
Segment income decreased 41% to $5.9 million in fiscal 2014
compared to $10.0 million in fiscal 2013, and primarily resulted
from the decline in operating revenues and $0.9 million of
bad debts in the Physical Ag’s & Energy product line, related
to renewable fuels activity. Variable expenses expressed as a
percentage of operating revenues decreased to 23% in fiscal 2014
compared to 25% in fiscal 2013, due to a decrease in variable
direct compensation and benefits.
Year Ended September 30, 2013 Compared to
Year Ended September 30, 2012
Operating revenues increased 40% to $26.8 million in fiscal 2013
compared to $19.1 million in fiscal 2012.
Precious metals operating revenues increased 35% to $15.0 million
in fiscal 2013 compared to $11.1 million in fiscal 2012, primarily
as a result of the effect of realized gains on the sale of precious
metals inventories which were carried at cost at September 30,
2012. e increase was partially offset by a 28% decrease in the
number of ounces traded primarily in the Far Eastern markets.
Operating revenues in the physical agricultural and energy
commodity product line increased 51% to $11.9 million in
fiscal 2013 compared to $7.9 million in fiscal 2012, primarily