REVIEW OF OPERATIONS – 2005 

Change in Accounting Policy – Recognition of Initial and Additional Listing Fee Revenue 
In October 2005, we announced a restatement of our financial statements to reflect a change in accounting policy related to recognition of revenue from initial and additional listing fees to comply with the Canadian Institute of Chartered Accountants’ Emerging Issues Committee Abstract–141 (“EIC-141”). EIC-141 specifies that certain non-refundable fees be deferred and recognized systematically over future accounting periods. EIC-141 was effective for fiscal years commencing on or after January 1, 2004. Before the adoption of EIC-141, non-refundable fees were recognized at the time such fees were received. 

The effect of this change is that we now recognize revenue from initial and additional listing fees amortized on a straight-line basis over an estimated service period of ten years. For a description of the basis for determining this service period, see Deferred Revenue – Initial and Additional Listing Fees. Unamortized balances are recorded as deferred revenue–initial and additional listing fees on the consolidated balance sheet. These fees are received at the completion of a transaction and are non-refundable. The implementation of EIC-141 had no impact on cash flows from operating activities. The accounting policy relating to sustaining listing fees is unchanged.

Year Ended December 31, 2005 compared with Year Ended December 31, 2004 

The following is a summary of financial results:

• Revenue increased in each of the three primary revenue streams of listings, trading and data.
• Expenses decreased largely due to lower general and administrative costs, partially offset by an increase in information and trading systems costs.
• Net income increased due to higher revenue and lower general and administrative costs.
  
  

The following is a summary of financial results based on initial and additional listing fees received without giving effect to EIC-141^*.