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Bad Debt on Physical Coal Bad Debt on Physical Coal (Notes)
12 Months Ended
Sep. 30, 2017
Bad Debt on Physical Coal [Abstract]  
Unusual or Infrequent Items, or Both, Disclosure [Text Block]
During the fourth quarter of fiscal 2017, the Company recorded a charge to earnings of $47.0 million, to record an allowance for doubtful accounts related to a bad debt incurred in the physical coal business, conducted solely in the Company’s Singapore subsidiary, INTL Asia Pte. Ltd., with a coal supplier. Components of the bad debt on physical coal include allowances on amounts due to the Company from the supplier related to: coal paid for but not delivered to customers; reimbursement of demurrage claims, dead freight and other charges paid by INTL Asia Pte. Ltd. to its customers; reimbursement due for deficiencies in the quality of coal delivered to customers; and losses incurred related to the cancellation of open sales contracts.
The Company purchased coal delivered onto barges and paid 80% of the value against bills of lading and purchase invoices, with the remaining 20% payable following inspection upon delivery to customers’ vessels. The Company took title of the coal when it was loaded onto barges and maintained title until it was offloaded onto customers’ vessels. The logistics related to the delivery of coal to the customers’ vessels was out-sourced to the Company’s coal supplier, and the Company determined that certain purchased coal was not delivered to the customers’ vessels during the fourth quarter ended September 30, 2017. Furthermore, the Company determined that the supplier was unable to deliver such purchased coal to its customers. Demurrage claims, dead freight, and other penalty charges paid by INTL Asia Pte. Ltd. to its customers were due to be reimbursed by the supplier based on transaction agreements with the supplier. Subsequent to the end of the fourth quarter ended September 30, 2017, the Company determined the supplier was unable to make this reimbursement.
The Company has received an acknowledgment of debt and a note from the supplier in its first quarter ending December 31, 2017. However, there is substantial uncertainty as to whether the supplier will be able to meet its financial obligations to the Company and as to the timing of any recovery. The bad debt on physical coal is presented separately as a component of income from operations in the consolidated income statements.
As of September 30, 2017, the physical coal business is part of our Physical Commodities segment and conducted solely in INTL Asia Pte. Ltd. Subsequent to September 30, 2017, the Company ceased and exited the physical coal business. All remaining open sales contracts have been canceled. During the first quarter ending December 31, 2017, the Company expects to record additional bad debt expense of $1.0 million related to reimbursement due the Company from the supplier for demurrage and other charges related to contracts with delivery dates subsequent to September 30, 2017.
The Company has considered the impact of the exit of the physical coal business on the Company’s financial position, future operating results and liquidity, and believes the exit will not have a material negative impact to the consolidated financial statements, expected cash flows or liquidity of the Company. The physical coal business had not contributed significantly to income from operations. The Company has no long-lived or intangible assets related to the physical coal business, and accordingly has recorded no impairment charges. The Company believes any additional exit costs will not be material to the consolidated financial statements.