Review of Operations – 2005
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REVIEW OF OPERATIONS – 2005 (continued)

Capital Markets

  • The total value of securities traded in 2005 on Toronto Stock Exchange and TSX Venture Exchange increased by 29% over 2004 ($1,090.9 billion in 2005 versus $844.8 billion in 2004). 
  • The number of transactions in 2005 on Toronto Stock Exchange and TSX Venture Exchange increased by 36% over 2004 (58.6 million in 2005 versus 43.1 million in 2004).
  • The increase was slightly offset by a pricing change on Toronto Stock Exchange effective October 1, 2005.

Energy Markets

  • The volumes traded and/or cleared in natural gas and electricity contracts on NGX in 2005 increased by 38% over 2004 (8.8 million terajoules in 2005 versus 6.4 million terajoules in the ten month period from March 1, 2004 to December 31, 2004).
  • 2005 included a full year of revenue versus ten months of revenue following the acquisition of NGX on March 1, 2004.

Market Data Revenue 

(in millions of dollars) 

2005

2004

% Increase 

$ 67.4

$ 58.8

15%
  • Market Data Revenue increased due to a 10% increase in the number of professional and equivalent real-time data subscriptions (over 118,000 at the end of 2005 versus over 107,000 at the end of 2004) partly due to increased sales to U.S. customers.
  • The increase was also attributable to price increases that were effective September 1, 2004 and May 1, 2005.
  • The increase was somewhat offset by the impact of certain users converting to an alternate fee model under which the fees for usage based quotes are capped. 
  • The increase was also reduced by the negative impact of the appreciation of the Canadian dollar against the U.S. dollar in 2005 versus 2004.

Business Services Revenue 

(in millions of dollars)

2005

2004

% (Decrease)

$ 7.9

$ 8.4

(6%)
  • Business Services Revenue decreased due to a change in the pricing for technology services provided to Market Regulation Services Inc., reflecting cost savings from migrating to a more cost efficient technology solution. 
  • Market Regulation Services Inc. paid us $6.9 million in 2005 for technology related services as compared with $7.3 million in 2004.

Expenses

Compensation and Benefits 

(in millions of dollars) 

2005

2004

% (Decrease)

$ 72.5

$ 73.6

(1%)
  • Compensation and Benefits costs decreased due to a gain of $4.5 million under a hedging program related to long-term based incentives. The gain was realized in the fourth quarter of 2005. These incentives were forfeited by employees who left TSX Group over the period in which the hedge was in effect. 
  • The decrease was also due to a reduction in the number of employees (510 employees at December 31, 2005 versus 553 employees at December 31, 2004).
  • The decrease was somewhat offset by higher performance incentive accruals, partially due to share price appreciation. 
  • The decrease was also somewhat offset by higher costs related to annual salary increases, and by the inclusion of costs pertaining to NGX employees for a full year in 2005 compared with ten months in 2004 following the acquisition of NGX on March 1, 2004.

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