Core Business of TMX Group
We derive revenue primarily from trading and clearing, issuer services and market data.
Canadian GAAP requires that we recognize initial and additional listing fees over an estimated service period related to the fees, which we have determined to be ten years, even though we receive these fees upon completion of the transaction and they are non-refundable to customers. We believe it is helpful to also show total revenue based on initial and additional listing fees billed* as this measure links these listing fees more closely with the listing transactions and cash flows we generate from these transactions. This is how our international peers, who report using International Financial Reporting Standards (IFRS), currently account for these fees.
The following is a reconciliation of total revenue based on initial and additional listing fees billed* to total revenue based on initial and additional listing fees reported:
| (in millions of dollars) | 2008 | 2007 | ||
| Total revenue based on initial and additional listing fees billed* | $ | 561.4 | $ | 503.2 |
| Initial and additional listing fees billed* and deferred to future periods | $ | (90.0) | $ | (129.0) |
| Recognition of initial and additional listing fees billed* and previously included in deferred revenue |
$ | 61.8 | $ | 50.4 |
| Total revenue based on initial and additional listing fee revenue reported | $ | 533.2 | $ | 424.6 |
| Excess of initial and additional listing fees billed* over initial and additional listing revenue reported |
$ | 28.2 | $ | 78.6 |
| 4 | Includes revenue from Montréal Exchange from May 1, 2008. |
| 5 | Includes revenue from Montréal Exchange from May 1, 2008. |
| + | Includes $7.7 million in revenue from Equicom for the seven months from acquisition on June 1, 2007 and full year 2008. |
| * | See discussion under the heading Non-GAAP Financial Measures. |
