INTL FCStone 2014 Annual Report Download - page 65

INTL FCSTONE INC.  Form 10K 49
PART II
ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations
In December 2012, we received proceeds of $8.6 million from
the sale of our shares in LME Holdings Limited. In December
2012, we received proceeds of $1.5 million in connection with
the sale of our exchange membership seats in the KCBT.
Capital expenditures included in investing activities for property,
plant and equipment totaled $4.3 million in fiscal 2014, decreasing
from $4.9 million in fiscal 2013.
On December 11, 2013, our Board of Directors authorized
repurchase of up to 1.5 million shares of our 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 our stock repurchase plan, and subject to market
conditions and as permitted by securities laws and other legal
and regulatory requirements. During fiscal 2014, we repurchased
513,800 shares of our outstanding common stock in open market
transactions, for an aggregate purchase price of $9.7 million. During
fiscal 2013, we repurchased 200,109 shares of our outstanding
common stock in open market transactions, for an aggregate
purchase price of $3.7 million. During fiscal 2012, we repurchased
217,507 shares of our outstanding common stock in open market
transactions in the aggregate amount of $4.0 million.
In July 2013, we completed the offering of $45.5 million
aggregate principal amount of our 8.5% Senior Notes due
2020 (the “Notes”). The net proceeds of the sale of the Notes
are being used for general corporate purposes. The Notes
will mature on July 30, 2020. We may redeem the Notes, in
whole or in part, at any time on and after July 30, 2016, at
a redemption price equal to 100% of the principal amount
redeemed plus accrued and unpaid interest to, but not
including, the redemption date.
We incurred debt issuance costs of $1.7 million in connection
with the issuance of the Notes, which are being amortized over
the term of the Notes. Additionally, we paid debt issuance costs
of $1.5 million in connection with the issuance of the new
three-year credit facility, which are being amortized over the
thirty-six month term of the facility.
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 our liquidity, financial condition and
capital resources.
Contractual Obligations
e following table summarizes our cash payment obligations as of September 30, 2014:
(in millions) Total
Payments Due by Period
Less than 1 year 1 - 3 Years 3 - 5 Years After 5 Years
Operating lease obligations $ 44.0 $ 8.2 $ 13.0 $ 10.3 $ 12.5
Purchase obligations(1) 252.1 252.1 — — —
Senior unsecured notes 45.5 — — — 45.5
Contingent acquisition consideration 6.0 4.3 1.7 — —
Other 12.9 5.4 4.1 2.2 1.2
$ 360.5 $ 270.0 $ 18.8 $ 12.5 $ 59.2
(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 September 30, 2014 fair values. The purchase commitments for less than one year will be partially offset by
corresponding sales commitments of $267.3 million.
Total contractual obligations exclude defined benefit pension
obligations. In fiscal 2015, we anticipate making contributions
of $2.5 million to defined benefit 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 flow from
operations, available cash and available borrowings under our
credit facilities will be adequate to meet our future liquidity needs.
Off Balance Sheet Arrangements
We are party to certain financial instruments with off-balance
sheet risk in the normal course of business as a registered securities
broker-dealer and FCM and from our market-making and
proprietary trading in the foreign exchange and commodities
trading business. As part of these activities, we carry short
positions. For example, we sell financial instruments that we
do not own, borrow the financial instruments to make good
delivery, and therefore are obliged to purchase such financial
instruments at a future date in order to return the borrowed
financial instruments. We have recorded these obligations in
the consolidated financial statements at September 30, 2014
and September 30, 2013, at fair value of the related financial
instruments, totaling $264.0 million and $179.9 million,
respectively. ese positions are held to offset the risks related
to financial assets owned, and reported in our consolidated
balance sheets in ‘financial instruments owned, at fair value’,
and ‘physical commodities inventory’. We will incur losses if the
fair value of the financial instruments sold, not yet purchased,
increases subsequent to September 30, 2014, which might be
partially or wholly offset by gains in the value of assets held
as of September 30, 2014. e totals of $264.0 million and
$179.9 million include a net liability of $84.4 million and