The Company reports its operating segments based on services provided to clients. The Company’s business activities are managed as operating segments and organized into reportable segments as follows:


•	Commercial Hedging (includes components Financial Agricultural (“Ag”) & Energy and LME Metals)


•	Global Payments


•	Securities (includes components Equity Capital Markets, Debt Capital Markets and Asset Management)


•	Physical Commodities (includes components Precious Metals and Physical Ag & Energy)


•	Clearing and Execution Services (includes components Exchange-Traded Futures & Options, FX Prime Brokerage, Correspondent Clearing, Independent Wealth Management, and Derivative Voice Brokerage)

Commercial Hedging

The Company serves its commercial clients through its team of risk management consultants, providing a high-value-added service that it believes differentiates the Company from its competitors and maximizes the opportunity to retain clients. The 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.

The 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 products listed on the LME. The 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. The Company also provides execution of foreign currency forwards and options and interest rate swaps 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.

Global Payments

The Company provides customized foreign exchange and treasury services to banks and commercial businesses as well as charities and non-governmental organizations and government organizations. The Company provides transparent pricing and offers payments services in more than 170 countries and 140 currencies, which it believes is more than any other payments solution provider. Its proprietary FXecute global payments platform is integrated with a financial information exchange (“FIX”) protocol. This FIX protocol is an electronic communication method for the real-time exchange of information, and the Company believes it represents one of the first FIX offerings for cross-border payments in exotic currencies. FIX functionality allows clients to view real time market rates for various currencies, execute and manage orders in real-time, and view the status of their payments through the easy-to-use portal.

Additionally, as a member of SWIFT, the Company is able to offer its services to large money center and global banks seeking more competitive international payments services. In addition, the Company operates a fully accredited SWIFT Service Bureau which facilitates cross-border payments and acceptance transactions for financial institutions, trade networks and corporations.

Through this single comprehensive platform and our commitment to client service, the Company believes it is able to provide simple and fast execution, ensuring delivery of funds in local currency to any of these countries quickly through its global network of approximately 325 correspondent banks. In this business, the Company primarily acts as a principal in buying and selling foreign currencies on a spot basis. The Company derives revenue from the difference between the purchase and sale prices.

The Company believes its clients value its ability to provide exchange rates that are significantly more competitive than those offered by large international banks, a competitive advantage that stems from its years of foreign exchange expertise focused on smaller, less liquid currencies.

Securities

The Company provides value-added solutions that facilitate cross-border trading and believes its clients value the Company’s ability to manage complex transactions, including foreign exchange, utilizing its local understanding of market convention, liquidity and settlement protocols around the world. The Company’s clients include U.S.-based regional and national broker-dealers and institutions investing or executing client transactions in international markets and foreign institutions seeking access to the U.S. securities markets. The Company is one of the leading market makers in foreign securities, making markets in over 5,000 ADRs, GDRs and foreign ordinary shares, of which over 3,600 trade in the OTC market. In addition, it will, on request, make prices in more than 10,000 unlisted foreign securities. The Company is also a broker-dealer in Argentina and Brazil where we are active in providing institutional executions in the local capital markets.

The Company acts as an institutional dealer in fixed income securities, including U.S. Treasury, U.S. government agency, agency mortgage-backed and asset-backed securities as well as investment grade, high yield, convertible and emerging market debt to a client base including asset managers, commercial bank trust and investment departments, broker-dealers and insurance companies.

The Company also originates, structures and places debt instruments in the international and domestic capital markets. These instruments include complex asset-backed securities (primarily in Argentina) and domestic municipal securities. On occasion, the Company may invest its own capital in debt instruments before selling them. The Company also actively trades in a variety of international debt instruments and operates an asset management business in which it earns fees, commissions and other revenues for management of third party assets and investment gains or losses on its investments in funds and proprietary accounts managed either by its investment managers or by independent investment managers.

Physical Commodities

The Physical Commodities segment consists of the Company’s Precious Metals trading and Physical Agricultural and Energy commodity businesses. In Precious Metals, the Company provides a full range of trading and hedging capabilities, including OTC products, to select producers, consumers, and investors. Through our websites, we provide clients the ability to purchase physical gold and other precious metals, in multiple forms, and in denominations of their choice. In the Company’s trading activities, it acts as a principal, committing its own capital to buy and sell precious metals on a spot and forward basis.

In the Company’s Physical Ag & Energy commodity business, it acts as a principal to facilitate financing, structured pricing and logistics services to clients across the commodity complex, including energy commodities, grains, oil seeds, cotton, coffee, cocoa, edible oils and feed products. The Company provides financing to commercial commodity-related companies against physical inventories. The Company uses sale and repurchase agreements to purchase commodities evidenced by warehouse receipts, subject to a simultaneous agreement to sell such commodities back to the original seller at a later date.

Transactions where the sale and repurchase price are fixed upon execution, and meet additional required conditions, are accounted for as product financing arrangements, and accordingly no commodity inventory, purchases or sales are recorded. Transactions where the repurchase price is not fixed at execution do not meet all the criteria to be accounted for as product financing arrangements, and therefore are recorded as commodity inventory, purchases and sales.

INTL FCStone Ltd precious metals sales and cost of sales are presented on a net basis and included as a component of ‘principal gains, net’ in the consolidated income statements, in accordance with U.S GAAP accounting requirements for broker-dealers. Precious metals sales and cost of sales for subsidiaries that are not broker-dealers continue to be recorded on a gross basis.

Precious metals inventory held by subsidiaries that are not broker-dealers continues to be valued at the lower of cost or market value. Precious metals sales and cost of sales for subsidiaries that are not broker-dealers continue to be recorded on a gross basis. The agricultural commodity inventories are carried at net realizable value, which approximates fair value less disposal costs. The agricultural inventories have reliable, readily determinable and realizable market prices, have relatively insignificant costs of disposal and are available for immediate delivery. The Company records its Physical Ag & Energy commodities revenues on a gross basis.

Operating revenues and losses from its precious metals commodities derivatives activities are included in ‘principal gains, net’ in the consolidated income statements. Operating revenues and losses from our Physical Ag and Energy commodity business are included in ‘cost of sales of physical commodities’ in the consolidated income statements The Company generally mitigates the price risk associated with commodities held in inventory through the use of derivatives. The Company does not elect hedge accounting under U.S. GAAP in accounting for this price risk mitigation. The Company’s management continues to evaluate performance and allocated resources on an operating revenue basis.

Clearing and Execution Services (CES)

The Company provides competitive and efficient clearing and execution in all major futures and securities exchanges globally as well as prime brokerage in equities and major foreign currency pairs and swap transactions. Through its platform, client orders are accepted and directed to the appropriate exchange for execution. The Company then facilitates the clearing of clients’ transactions. Clearing involves the matching of clients’ trades with the exchange, the collection and management of client margin deposits to support the transactions, and the accounting and reporting of the transactions to clients.

As of September 30, 2019, the Company’s U.S. FCM held $2.2 billion in required client segregated assets, which the Company believes makes it the third largest independent, non-bank FCM in the U.S., as measured by required client segregated assets. The Company seeks to leverage its capabilities and capacity by offering facilities management or outsourcing solutions to other FCM’s.

The Company is an independent full-service provider to introducing broker-dealers (“IBD’s”) of clearing, custody, research, syndicated and security-based lending products and services, including a proprietary technology platform which offers seamless connectivity to ensure a positive client experience through the clearing and settlement process. The Company’s independent wealth management business, which offers a comprehensive product suite to retail clients nationwide, clears through this platform. The Company believes it is one of the leading mid-market clearer’s in the securities industry, with approximately 70 correspondent clearing relationships with over $16 billion in assets under management or administration as of September 30, 2019.

The Company provides prime brokerage foreign exchange (“FX”) services to financial institutions and professional traders. The Company provides its clients with the full range of OTC products, including 24-hour a day execution of spot, forwards and options as well as non-deliverable forwards in both liquid and exotic currencies. The Company also operates a proprietary foreign exchange desk that arbitrages the exchange-traded foreign exchange markets with the cash markets.

Through its London-based Europe, Middle East and Africa (“EMEA”) oil voice brokerage business, the Company provides brokerage services across the fuel, crude and middle distillates markets with well known commercial and institutional clients throughout EMEA.

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The total revenues reported combine gross revenues for the physical commodities business for subsidiaries that are not broker-dealers and net revenues for all other businesses. In order to reflect the way that the Company’s management views the results, the table below also reflects the segment contribution to ‘operating revenues’, which is shown on the face of the consolidated income statements and which is calculated by deducting physical commodities cost of sales from total revenues.

Segment data includes the profitability measure of net contribution by segment. Net contribution is one of the key measures used by management to assess the performance of each segment and for decisions regarding the allocation of the Company’s resources. Net contribution is calculated as revenue less direct cost of sales, transaction-based clearing expenses, variable compensation, introducing broker commissions, and interest expense. Variable compensation paid to risk management consultants/traders generally represents a fixed percentage of revenues generated, and in some cases, revenues generated less transaction-based clearing expenses, base salaries and an overhead allocation.

Segment data also includes segment income which is calculated as net contribution less non-variable direct expenses of the segment. These non-variable direct expenses include trader base compensation and benefits, operational employee compensation and benefits, communication and data services, business development, professional fees, bad debt expense and other direct expenses.

Inter-segment revenues, expenses, receivables and payables are eliminated upon consolidation, except revenues and expenses related to foreign currency transactions undertaken on an arm’s length basis by the foreign exchange trading business for the securities business. The foreign exchange trading business competes for this business as it does any other business. If its rates are not competitive, the securities businesses buy or sell their foreign currency through other market participants.

On a recurring basis, the Company sweeps excess cash from certain U.S. operating segments to a centralized corporate treasury function in exchange for an intercompany receivable asset. The intercompany receivable asset is eliminated during consolidation, and therefore this practice may impact reported total assets between segments.

Information for the reportable segments is shown in accordance with the Segment Reporting Topic of the ASC as follows



	Year Ended September 30,
(in millions)	2019			2018			2017
Total revenues:
Commercial Hedging	$	302.4		$	286.7		$	244.6
Global Payments	112.8			99.2			89.2
Securities	295.3			196.2			151.7
Physical Commodities	31,864.7			26,703.8			28,684.4
Clearing and Execution Services	326.1			332.4			259.8
Corporate Unallocated	20.8			23.9			4.7
Eliminations	(25.1		)	(19.5		)	(10.8		)
Total	$	32,897.0		$	27,622.7		$	29,423.6
Operating revenues:
Commercial Hedging	$	302.4		$	286.7		$	244.6
Global Payments	112.8			99.2			89.2
Securities	295.3			196.2			151.7
Physical Commodities	73.8			56.9			44.8
Clearing and Execution Services	326.1			332.4			259.8
Corporate Unallocated	20.8			23.9			4.7
Eliminations	(25.1		)	(19.5		)	(10.8		)
Total	$	1,106.1		$	975.8		$	784.0
Net operating revenues (loss):
Commercial Hedging	$	236.5		$	226.4		$	194.3
Global Payments	107.0			93.5			80.6
Securities	131.0			94.6			94.6
Physical Commodities	56.3			44.8			37.3
Clearing and Execution Services	133.2			122.6			102.2
Corporate Unallocated	(10.8		)	(0.3		)	(16.4		)
Total	$	653.2		$	581.6		$	492.6
Net contribution:
(Revenues less cost of sales of physical commodities, transaction-based clearing expenses, variable compensation, introducing broker commissions and interest expense)
Commercial Hedging	$	170.4		$	164.7		$	141.8
Global Payments	86.6			75.0			64.4
Securities	81.9			69.1			75.6
Physical Commodities	40.5			31.8			27.2
Clearing and Execution Services	103.4			91.8			78.0
Total	$	482.8		$	432.4		$	387.0
Segment income (loss):
(Net contribution less non-variable direct segment costs)
Commercial Hedging	$	100.1		$	96.4		$	72.8
Global Payments	66.1			59.8			50.6
Securities	47.4			40.8			46.6
Physical Commodities	38.0			16.6			(31.4		)
Clearing and Execution Services	54.1			48.3			30.4
Total	$	305.7		$	261.9		$	169.0
Reconciliation of segment income to income before tax:
Segment income	$	305.7		$	261.9		$	169.0
Net costs not allocated to operating segments	200.2			162.4			153.8
Other gains	5.5			2.0			—
Income before tax	$	111.0		$	101.5		$	15.2

⁽¹⁾ During fiscal 2019, the Company recorded recoveries on the bad debt on physical coal of $12.4 million. During fiscal 2018 and fiscal 2017, the Company recorded charges to earnings of $1.0 million and $47.0 million, respectively, to record an allowance for doubtful accounts related to a bad debt incurred in the physical coal business conducted solely in INTL Asia Pte. Ltd., with a coal supplier, as further discussed in Note 18.

⁽²⁾The costs not allocated to operating segments include certain shared services such as information technology, accounting and treasury, credit and risk, legal and compliance, and human resources and other activities.



(in millions)	As of September 30, 2019		As of September 30, 2018		As of September 30, 2017
Total assets:
Commercial Hedging	$	2,041.0	$	1,935.7	$	1,650.3
Global Payments	278.3		206.6		199.5
Securities	5,219.1		3,058.2		2,101.7
Physical Commodities	357.8		413.7		339.5
Clearing and Execution Services	1,892.1		2,109.9		1,818.9
Corporate unallocated	147.8		100.6		133.5
Total	$	9,936.1	$	7,824.7	$	6,243.4

Information regarding revenues and operating revenues for the years ended September 30, 2019, 2018, and 2017, and information regarding long-lived assets (defined as property, equipment, leasehold improvements and software) as of September 30, 2019, 2018, and 2017 in geographic areas were as follows:



	Year Ended September 30,
(in millions)	2019		2018		2017
Total revenues:
United States	$	1,947.6	$	1,587.6	$	1,168.0
Europe	280.2		189.6		166.9
South America	56.5		59.5		53.9
Middle East and Asia	30,606.9		25,781.4		28,030.3
Other	5.8		4.6		4.5
Total	$	32,897.0	$	27,622.7	$	29,423.6
Operating revenues:
United States	$	799.4	$	695.3	$	529.4
Europe	209.6		189.0		166.9
South America	56.5		58.0		54.0
Middle East and Asia	34.8		28.9		29.2
Other	5.8		4.6		4.5
Total	$	1,106.1	$	975.8	$	784.0

(in millions)	As of September 30, 2019		As of September 30, 2018		As of September 30, 2017
Long-lived assets, as defined:
United States	$	33.9	$	33.0	$	29.7
Europe	6.6		6.8		7.3
South America	2.1		1.4		1.5
Middle East and Asia	1.0		1.2		0.2
Other	0.3		—		—
Total	$	43.9	$	42.4	$	38.7