• Home
• Letter from the Chair
• Letter from the CEO
• Statement of Corporate Governance Practices
• Management's Discussion and Analysis
• Introduction
• Non-GAAP Financial Measures
• Executive Summary of Vision, Strategies and Priorities
• Market Conditions and Outlook
• Overview of the Business
• Core Business of TMX Group
• Year Ended December 31, 2008 Compared with Year Ended December 31, 2007
• Segment Analysis
• Liquidity and Capital Resources
• Selected Annual Information
• Quarterly Information
• Critical Accounting Estimates
• Adoption of Accounting Policies
• Financial Instruments Disclosure and Presentation
• Disclosure Controls and Procedures and Internal Control over Financial Reporting
• Strategy
• Forward-Looking Information, Risks and Uncertainties
• Management Statement
• Auditors' Report to the Shareholders
• Consolidated Financial Statements
• Notes to the Consolidated Financial Statements
• Three-year Review: Financial Information
• Board of Directors
• Senior Management
• Shareholder Information

Quarterly Information

2007

• Revenue in Q1/07 improved over revenue in Q4/06 primarily due to higher market data and issuer services revenue. Net income for Q1/07 increased over Q4/06 primarily due to the increased revenue partially offset by higher overall expenses.
• Revenue in Q2/07 improved over revenue in Q1/07 primarily due to higher issuer services, trading and market data revenue. Net income for Q2/07 increased over Q1/07 primarily due to the increased revenue and lower overall expenses, somewhat offset by lower investment income.
• Revenue in Q3/07 declined slightly over revenue in Q2/07. Increased revenue from issuer services was more than offset by decreases in other sources of revenue. Net income for Q3/07 increased over Q2/07 primarily due to higher investment income and lower income taxes.
• Revenue in Q4/07 increased over revenue in Q3/07 primarily due to higher issuer services, trading and market data revenue. Net income for Q4/07 decreased over Q3/07 primarily due to increased income taxes and expenses which more than offset the higher revenue.

2008

• Revenue in Q1/08 increased over revenue in Q4/07 primarily due to higher market data and issuer services revenue. Net income for Q1/08 increased over Q4/07 primarily due to a decrease in expenses and higher revenue. Net income for Q1/08 was reduced due to an expense of $15.2 million to ISE Ventures related to exiting our previously announced joint venture to operate DEX, whereas in Q4/07, net income was reduced due to increased income taxes as a result of a $13.3 million reduction to the value of the future income tax asset
• Revenue in Q2/08 improved over revenue in Q1/08 primarily due to revenue associated with the combination with MX on May 1, 2008 and increased issuer services and market data revenue. Net income for Q2/08 increased over Q1/08 primarily due to the increase in revenue, somewhat offset by an increase in expenses, including interest expense, and a decrease in investment income.
• Revenue in Q3/08 improved over revenue in Q2/08 primarily due to a full quarter of revenue from the combination with MX. In addition, 100% of BOX’s revenue is consolidated from acquisition of control on August 29, 2008, with an adjustment made for non-controlling interests. Net income for Q3/08 increased over Q2/08 primarily due to the increase in revenue, somewhat offset by an increase in expenses related to MX and BOX, interest expense, and a decrease in investment income.
• Revenue in Q4/08 increased over revenue in Q3/08 primarily due to higher revenue from cash equity trading, derivatives trading and energy trading and higher market data revenue. Net income for Q4/08 decreased over Q3/08 primarily due to higher operating expenses and a $13.3 million mark to market adjustment on our interest rate swaps, partially offset by higher revenue and investment income.

Review of Fourth Quarter Results

Compared with Q4/07

• Revenue in Q4/08 improved over revenue in Q4/07 primarily due to the inclusion of revenue from MX and BOX, as well as increased issuer services, cash equity trading, energy trading and market data revenue. Net income for Q4/08 increased over Q4/07 primarily due to the increased revenue and lower income taxes, somewhat offset by higher operating expenses, interest expense and a $13.3 million mark to market adjustment on our interest rate swaps. In Q4/07, the future tax asset was reduced, and income tax expense increased by $13.3 million, primarily as a result of decreases in federal corporate income tax rates which were enacted in December 2007. The adjustment resulted in a reduction in net income of $13.3 million. Cash flows from operating activities in Q4/08 of $60.8 million increased by $7.6 million compared with $53.2 million in Q4/07 largely due to higher net income and a larger decrease in deferred revenue. Cash flows used in financing activities of $58.2 million were slightly lower in Q4/08 compared with $59.3 million in Q4/07 primarily due to a reduction in the cost of repurchases of our common shares under the NCIB, largely offset by an increase in dividends paid on common shares. Cash flows from investing activities of $19.9 million were somewhat higher in Q4/08 compared with $13.4 million in Q4/07 primarily due to an increase in cash related to acquisitions.

Compared with Q3/08

• Revenue in Q4/08 increased over revenue in Q3/08 primarily due to higher revenue from cash equity trading, derivatives trading and energy trading and higher market data revenue. Net income for Q4/08 decreased over Q3/08 primarily due to higher operating expenses and a $13.3 million mark to market adjustment on our interest rate swaps, partially offset by higher revenue and investment income. Cash flows from operating activities in Q4/08 of $60.8 million increased by $6.2 million compared with $54.6 million in Q3/08. Net income was $50.4 million in Q3/08 compared with $49.0 million in Q4/08; however, net income in Q4/08 was reduced by an unrealized loss of $12.5 million on the interest rate swaps. There was no similar reduction for this non-cash item in Q3/08. This was somewhat offset by a larger decrease in deferred revenue. Cash flows used in financing activities of $58.2 million in Q4/08 decreased by $94.0 million compared with $152.2 million in Q3/08 primarily due to a reduction in the amount of our common shares repurchased under the NCIB. Cash flows from investing activities of $19.9 million in Q4/08 decreased by $36.7 million compared with $56.6 million in Q3/08, primarily due to decreases in cash from the sale of marketable securities, somewhat offset by a reduction in cash outflows related to acquisitions.