- Revenue of $202.8 million, compared with $211.2 million in Q4/18
- Diluted earnings per share of 84 cents, which reflects a non-cash impairment charge of 32 cents per share, compared with $1.24 in Q4/18
- Adjusted diluted earnings per share of $1.31, unchanged from Q4/18
- Cash flows from operating activities of 83.1 million, up 21% over Q4/18
TORONTO, Feb. 10, 2020 /CNW/ - TMX Group Limited [TSX:X] ("TMX Group") today announced results for the full year and fourth quarter ended December 31, 2019.
Commenting on 2019 and the company's outlook and operating performance, John McKenzie, Interim Chief Executive Officer and Chief Financial Officer of TMX Group, said:
"TMX delivered strong results in 2019, drawing on the balanced strength of our complementary set of assets and a consistent, disciplined approach to cost management. The solid performance of Montreal Exchange and CDCC, our core derivatives business, as well as Trayport during the year served to partially offset softer capital markets activity. As we continue further into 2020, TMX's senior leadership team and all of our employees are focused on building on our organization's success by serving our clients across the world with excellence, executing against our global growth strategy and creating value for shareholders."
RESULTS OF OPERATIONS
Non-IFRS Financial Measures
Adjusted earnings per share, adjusted diluted earnings per share and adjusted net income are non-IFRS measures and do not have standardized meanings prescribed by IFRS and are, therefore, unlikely to be comparable to similar measures presented by other companies. We present adjusted earnings per share, adjusted diluted earnings per share, and adjusted net income to indicate ongoing financial performance from period to period, exclusive of a number of adjustments. These adjustments include amortization of intangibles related to acquisitions, strategic re-alignment expenses, transaction related costs, net income tax recovery on gain on sale of Natural Gas Exchange Inc. (NGX), gain on sale of interest in Bermuda Stock Exchange, gain on sale of interest in FTSE TMX Global Debt Capital Markets Limited (TMX FTSE), gain on sale of Contigo, gain on reduction in our shareholding in CanDeal, commodity tax provision, change in net deferred income tax liabilities resulting from decrease in Alberta corporate income tax rate and non-cash impairment charge related to Shorcan. Management uses these measures, and excludes certain items, because it believes doing so results in a more effective analysis of underlying operating and financial performance, including, in some cases, our ability to generate cash. Excluding these items also enables comparability across periods. The exclusion of certain items does not imply that they are non-recurring or not useful to investors.
Quarter ended December 31, 2019 (Q4/19) Compared with Quarter ended December 31, 2018 (Q4/18)
The information below reflects the financial statements of TMX Group for Q4/19 compared with Q4/18. Certain comparative information has been reclassified in order to conform with the financial presentation adopted in the current year.
(in millions of dollars, except per |
Q4/19 |
Q4/18 |
$ increase / |
% increase / |
Revenue |
$202.8 |
$211.2 |
$(8.4) |
(4)% |
Operating expenses |
106.3 |
114.2 |
(7.9) |
(7)% |
Income from operations |
96.5 |
97.0 |
(0.5) |
(1)% |
Net income |
47.5 |
69.8 |
(22.3) |
(32)% |
Adjusted net income1 |
74.3 |
73.9 |
0.4 |
1% |
Earnings per share |
||||
Basic |
0.85 |
1.25 |
(0.40) |
(32)% |
Diluted |
0.84 |
1.24 |
(0.40) |
(32)% |
Adjusted Earnings per share2 |
||||
Basic |
1.32 |
1.32 |
— |
0% |
Diluted |
1.31 |
1.31 |
— |
0% |
Cash flows from operating activities |
83.1 |
68.4 |
14.7 |
21% |
1 See discussion under the heading "Non-IFRS Financial Measures". |
|||||||||||
2 See discussion under the heading "Non-IFRS Financial Measures". |
Net Income and Earnings per Share
Net income in Q4/19 was $47.5 million, or $0.85 per common share on a basic and $0.84 on a diluted basis, compared with a net income of $69.8 million, or $1.25 per common share on a basic and $1.24 on a diluted basis, for Q4/18. The decrease in net income and earnings per share was driven by a non-cash impairment charge of $18.0 million related to Shorcan and lower revenue largely offset by lower operating expenses. The decrease in costs was driven by lower short term and long term employee performance incentive plan costs of $7.2 million. The decrease in diluted earnings per share was also driven by an increase in the number of weighted-average common shares outstanding in Q4/19 compared with Q4/18.
Adjusted Earnings per Share3 Reconciliation for Q4/19 and Q4/18
The following is a reconciliation of earnings per share to adjusted earnings per share:
Q4/19 |
Q4/18 |
|||
(unaudited) |
Basic |
Diluted |
Basic |
Diluted |
Earnings per share |
$0.85 |
$0.84 |
$1.25 |
$1.24 |
Adjustments related to: |
||||
Amortization of intangibles related to acquisitions |
0.16 |
0.16 |
0.17 |
0.17 |
Impairment charges |
0.32 |
0.32 |
— |
— |
Strategic re-alignment expenses4 |
(0.01) |
(0.01) |
— |
— |
Net income tax recovery on gain on sale of NGX |
— |
— |
(0.04) |
(0.04) |
Gain on sale of Contigo |
— |
— |
(0.04) |
(0.04) |
Gain on reduction in our shareholding in CanDeal |
— |
— |
(0.02) |
(0.02) |
Adjusted earnings per share5 |
$1.32 |
$1.31 |
$1.32 |
$1.31 |
Weighted average number of common shares |
56,207,332 |
56,825,493 |
55,782,699 |
56,175,835 |
Adjusted diluted earnings per share of $1.31 was unchanged from Q4/18 to Q4/19 reflecting lower revenue, largely offset by lower operating expenses. The decrease in costs was driven by lower short term and long term employee performance incentive plan costs of $7.2 million.
3 See discussion under the heading "Non-IFRS Financial Measures". |
Adjusted Net Income Reconciliation for Q4/19 and Q4/18
The following is a reconciliation of net income to adjusted net income:
(in millions of dollars) |
Q4/19 |
Q4/18 |
$ increase / |
% increase / |
Net income |
$47.5 |
$69.8 |
($22.3) |
(32)% |
Adjustments related to: |
||||
Amortization of intangibles related to |
9.4 |
9.3 |
0.1 |
1% |
Impairment charges |
18.0 |
— |
18.0 |
n/a |
Strategic re-alignment expenses6 |
(0.6) |
— |
(0.6) |
n/a |
Net income tax recovery on gain on sale of NGX |
— |
(2.0) |
2.0 |
(100)% |
Gain on sale of Contigo |
— |
(2.3) |
2.3 |
(100)% |
Gain on reduction in our shareholding in CanDeal |
— |
(0.9) |
0.9 |
(100)% |
Adjusted net income |
$74.3 |
$73.9 |
$0.4 |
1% |
Adjusted net income was essentially unchanged from Q4/18 to Q4/19 reflecting lower revenue, largely offset by lower operating expenses. The decrease in costs was driven by lower short term and long term employee performance incentive plan costs of $7.2 million.
6 Please refer to "Initiatives and Accomplishments - Strategic re-alignment" in the 2019 MD&A for more details. |
Revenue
(in millions of dollars) |
Q4/19 |
Q4/18 |
$ increase / |
% increase / |
Capital Formation |
$42.6 |
$45.4 |
$(2.8) |
(6)% |
Equities and Fixed Income Trading and Clearing |
51.1 |
54.9 |
(3.8) |
(7)% |
Derivatives Trading and Clearing |
33.3 |
35.1 |
(1.8) |
(5)% |
Global Solutions, Insights and Analytics |
75.9 |
73.8 |
2.1 |
3% |
Other |
(0.1) |
2.0 |
(2.1) |
(105)% |
$202.8 |
$211.2 |
$(8.4) |
(4)% |
Revenue was $202.8 million in Q4/19, down $8.4 million or 4% from $211.2 million in Q4/18 largely attributable to decreases in revenue from Capital Formation, Equities and Fixed Income Trading, Derivatives Trading and Clearing as well as Other revenue, somewhat offset by an increase in Trayport and CDS revenue.
Capital Formation
(in millions of dollars) |
Q4/19 |
Q4/18 |
$ increase / |
% increase / |
Initial listing fees |
$2.6 |
$3.1 |
$(0.5) |
(16)% |
Additional listing fees |
16.5 |
18.0 |
(1.5) |
(8)% |
Sustaining listing fees |
17.1 |
17.9 |
(0.8) |
(4)% |
Other issuer services |
6.4 |
6.4 |
— |
0% |
$42.6 |
$45.4 |
$(2.8) |
(6)% |
- Initial listing fees in Q4/19 decreased from Q4/18 primarily due to a decline in the amount of deferred initial listing fees recognized in Q4/19 compared with Q4/18. We recognized initial listing fees received in 2018 and 2019 of $2.3 million in Q4/19 compared with initial listing fees received in 2017 and 2018 of $2.8 million in Q4/18.
- Based on initial listing fees billed in 2019, the following amounts have been deferred to be recognized in Q1/20, Q2/20, Q3/20 and Q4/20: $2.0 million, $1.4 million, $0.8 million and $0.2 million respectively. Total initial listing fees revenue for future quarters will also depend on listing activity in those quarters.
- Additional listing fees in Q4/19 declined compared to Q4/18. There was a decrease in additional listing fee revenue on TSXV where there was a decrease in both the total number of financings and total financing dollars raised. In addition, the number of transactions billed on TSX declined by 2% from Q4/18 to Q4/19.
- Issuers listed on TSX and TSXV pay annual sustaining listing fees primarily based on their market capitalization at the end of the prior calendar year, subject to minimum and maximum fees. There was a decrease in sustaining listing fees on both TSX and TSXV (excluding NEX) due to the decrease in the market capitalization of issuers at December 31, 2018 compared with December 31, 2017; however, the decrease was partially offset by the impact from an increase in the maximum annual sustaining listing fee for corporate issuers on TSX from $110,000 to $125,000 effective January 1, 2019.
- Other issuer services revenue was essentially unchanged from Q4/18 to Q4/19.
Equities and Fixed Income Trading and Clearing
(in millions of dollars) |
Q4/19 |
Q4/18 |
$ increase / |
% increase / |
Equities and fixed income trading |
$22.7 |
$28.6 |
($5.9) |
(21)% |
Equities and fixed income clearing, |
28.4 |
26.3 |
2.1 |
8% |
$51.1 |
$54.9 |
($3.8) |
(7)% |
- There was a 21% decrease in Equities and Fixed Income Trading revenue in Q4/19 compared with Q4/18. This reflected a decrease in Equities trading revenue driven by lower overall volumes on all of our exchanges, partially offset by the impact from a favourable product mix. In addition, there was a decrease in fixed income trading revenue largely due to decreased activity in Government of Canada Bonds.
- The overall volume of securities traded on our equities marketplaces decreased by 25% (30.2 billion securities in Q4/19 versus 40.5 billion securities in Q4/18). There was a decrease in volumes of 22% on TSX, 30% on TSXV and 36% on Alpha in Q4/19 compared with Q4/18.
- Excluding intentional crosses, in all listed issues in Canada, our combined domestic equities trading market share was approximately 58% in Q4/19, down 1% from approximately 59% in Q4/18.7 We only trade securities that are listed on TSX or TSXV.
- Excluding intentional crosses, for TSX and TSXV listed issues, our combined domestic equities trading market share was approximately 65% in Q4/19, down 3% from approximately 68% in Q4/18.8
- CDS revenue increased by 8% from Q4/18 to Q4/19 reflecting revisions to the fee schedule for issuer services and increased international revenue. In addition, certain recoverable costs related to CDS's clearing operation, previously netted, are now included in both CDS revenue and Selling, general and administration expenses. The amounts reclassified to CDS revenue were $5.3 million for Q4/19 and $3.6 million for Q4/18.
Derivatives Trading and Clearing
(in millions of dollars) |
Q4/19 |
Q4/18 |
$ (decrease) |
% (decrease) |
$33.3 |
$35.1 |
$(1.8) |
(5)% |
- The decrease in Derivatives Trading and Clearing revenue was driven by a 7% decrease in revenue from MX and CDCC. There was a 9% decrease in volumes on MX (28.4 million contracts traded in Q4/19 versus 31.1 million contracts traded in Q4/18). Offsetting the impact from lower volumes, there was an increase in revenue from REPO (repurchase agreements) clearing in Q4/19 compared with Q4/18.
- There was also an increase in revenue from BOX. We are currently providing transitional services to BOX following the expiry of our agreement at the end of 2018 to provide SOLA technology and services.
7 Source: IIROC. |
Global Solutions, Insights and Analytics
(in millions of dollars) |
Q4/19 |
Q4/18 |
$ increase / |
% increase / |
Trayport |
$30.9 |
$28.6 |
$2.3 |
8% |
GSIA (excluding Trayport) |
$45.0 |
$45.2 |
($0.2) |
0% |
$75.9 |
$73.8 |
$2.1 |
3% |
Trayport
The increase in Global Solutions, Insights and Analytics (GSIA) revenue in Q4/19 compared with Q4/18 was driven by increased revenue from Trayport, including revenue from VisoTech (acquired May 15, 2019). The increase was partially offset by revenue from Contigo Software Limited (Contigo) (sold November 30, 2018) of approximately $1.3 million.
The following table summarizes the average number of Trayport subscribers (excluding VisoTech) over the last eight quarters:
Q4/19 |
Q3/19 |
Q2/19 |
Q1/19 |
Q4/18 |
Q3/18 |
Q2/18 |
Q1/18 |
|
Trader Subscribers9 |
5,116 |
4,900 |
4,850 |
4,727 |
4,665 |
4,356 |
4,321 |
4,207 |
Total Subscribers10 |
23,003 |
22,128 |
21,946 |
21,683 |
21,465 |
20,602 |
20,310 |
20,171 |
Revenue (in millions of GBP)11 |
£18.0 |
£18.2 |
£17.8 |
£16.7 |
£16.8 |
£16.5 |
£16.0 |
£15.4 |
Total Subscribers means all chargeable licenses of core Trayport products in core customer segments including Traders, Brokers and Exchanges. Trader Subscribers are a subset of Total Subscribers. Trader Subscribers revenue represents over 50% of total Trayport revenue.
Revenue from Trayport's core subscriber business, including VisoTech (acquired May 15, 2019), was £18.0 million in Q4/19, up 13% over Q4/18. Revenue from Contigo, the ancillary non-subscriber based risk application business of Trayport, which was sold on November 30, 2018, was £0.9 million in Q4/18.
GSIA (excluding Trayport)
Revenue from GSIA (excluding Trayport) decreased slightly from Q4/18 to Q4/19. There was lower revenue from subscriptions and usage based quotes in Q4/19 compared with Q4/18. This was largely offset by higher revenue from recoveries related to under-reported usage of real-time quotes in prior periods, co-location, benchmarks and indices as well as price changes implemented in 2H/19.
- The average number of professional market data subscriptions for TSX and TSXV products were down 2% in Q4/19 compared with Q4/18 (100,429 professional market data subscriptions in Q4/19 compared with 102,267 in Q4/18).
- The average number of MX professional market data subscriptions was down 5% in Q4/19 from Q4/18 (18,166 MX professional market data subscriptions in Q4/19 compared with 19,110 in Q4/18).
9 Previous amounts have been restated based on current data. |
Revenue from GSIA, excluding VisoTech and Contigo was essentially unchanged from Q4/18 to Q4/19.
Other
(in millions of dollars) |
Q4/19 |
Q4/18 |
$ (decrease) |
% (decrease) |
$(0.1) |
$2.0 |
$(2.1) |
(105)% |
The decrease in Other revenue was primarily due to recognizing net foreign exchange gains on net monetary assets in 2018 compared with net foreign exchange losses in 2019.
Operating expenses
(in millions of dollars) |
Q4/19 |
Q4/18 |
$ increase / |
% increase / |
Compensation and benefits |
$47.0 |
$53.4 |
$(6.4) |
(12)% |
Information and trading systems |
13.9 |
15.2 |
(1.3) |
(9)% |
Selling, general and administration |
25.9 |
27.6 |
(1.7) |
(6)% |
Depreciation and amortization |
20.4 |
18.0 |
2.4 |
13% |
Strategic re-alignment expenses12 |
(0.9) |
— |
(0.9) |
n/a |
$106.3 |
$114.2 |
$(7.9) |
(7)% |
Operating expenses in Q4/19 were $106.3 million, down $7.9 million or 7%, from $114.2 million in Q4/18. The decrease in costs was largely related to lower short term and long term employee performance incentive plan costs of $7.2 million. Offsetting this decrease, certain recoverable costs related to CDS's clearing operation, previously netted, are now included in both CDS revenue and Selling, general and administration expenses. The amounts reclassified to Selling, general and administration expenses were $5.3 million for Q4/19 and $3.6 million for Q4/18.
Compensation and benefits
(in millions of dollars) |
Q4/19 |
Q4/18 |
$ (decrease) |
% (decrease) |
$47.0 |
$53.4 |
$(6.4) |
(12)% |
- Compensation and benefits costs decreased in Q4/19 primarily due to lower short term employee performance incentive plan costs of approximately $4.5 million. In addition, there was a net reduction in long term employee performance incentive plan costs of approximately $2.7 million. These costs increased by approximately $1.3 million due to the appreciation in our share price, but were more than offset by the reversal of an accrual of approximately $4.0 million relating to long term employee performance incentives that were forfeited upon the execution of an agreement on January 10, 2020 in respect of the CEO's retirement.
- The decreases were partially offset by higher costs related to merit increases. Higher expenses related to VisoTech (acquired May 15, 2019) were partially offset by lower costs related to Contigo (sold November 30, 2018).
- There were 1,287 TMX Group employees at December 31, 2019 versus 1,208 employees at December 31, 2018 reflecting a higher headcount related to the acquisition of VisoTech (acquired May 15, 2019) which employs approximately 45 people. There was also an increase in headcount attributable to investing in the various growth areas of our business, including Capital Formation and Trayport.
12 Please refer to "Initiatives and Accomplishments - Strategic re-alignment" in the 2019 MD&A for more details. |
Information and trading systems
(in millions of dollars) |
Q4/19 |
Q4/18 |
$ (decrease) |
% (decrease) |
$13.9 |
$15.2 |
$(1.3) |
(9)% |
- The decrease in Information and trading systems expenses from Q4/18 to Q4/19 reflected lower information technology professional services costs and network charges.
Selling, general and administration
(in millions of dollars) |
Q4/19 |
Q4/18 |
$ (decrease) |
% (decrease) |
$25.9 |
$27.6 |
$(1.7) |
(6)% |
- Selling, general and administration expenses decreased in Q4/19 compared with Q4/18 primarily due to the implementation of IFRS 16, Leases (see Accounting and Control Matters - Changes in accounting policies - ADOPTION OF IFRS 16) of $2.6 million. In addition, there were lower Selling, general and administration expenses relating to licensing and royalties. Offsetting these decreases, certain recoverable costs related to CDS's clearing operation, previously netted, are now included in both CDS revenue and Selling, general and administration expenses. The amounts reclassified to Selling, general and administration expenses were $5.3 million for Q4/19 and $3.6 million for Q4/18.
Depreciation and amortization
(in millions of dollars) |
Q4/19 |
Q4/18 |
$ increase |
% increase |
$20.4 |
$18.0 |
$2.4 |
13% |
- There were higher Depreciation and amortization costs driven by the implementation of IFRS 16 (see Accounting and Control Matters - Changes in accounting policies - ADOPTION OF IFRS 16 in 2019 MD&A).
- The Depreciation and amortization costs in Q4/19 of $20.4 million included $11.8 million related to amortization of intangibles related to acquisitions (0.16 cents per basic and diluted share).
- The Depreciation and amortization costs in Q4/18 of $18.0 million included $11.8 million related to amortization of intangibles related to acquisitions (0.17 cents per basic and diluted share).
Strategic re-alignment expenses
Q4/19 |
Q4/18 |
|||
(in millions of dollars) |
Pre-tax Amount |
Basic and Diluted |
Pre-tax Amount |
Basic and Diluted |
$(0.9) |
$(0.01) |
$— |
$— |
- In Q2/19 we incurred non-recurring charges for onerous contracts related to our initiative on modernizing our clearing platforms of $1.3 million. In Q4/19, we recovered approximately $0.9 million of these charges (See INITIATIVES AND ACCOMPLISHMENTS - Strategic Re-alignment).
Additional Information
Share of income from equity accounted investees
(in millions of dollars) |
Q4/19 |
Q4/18 |
$ (decrease) |
% (decrease) |
$0.7 |
$0.8 |
$(0.1) |
(13)% |
- The decrease in our share of income from equity accounted investees of $0.1 million reflected a decrease in the contribution from CanDeal.ca Inc. (Candeal), somewhat offset by an increase in the contribution from BOX.
Impairment charge
(in millions of dollars) |
Q4/19 |
Q4/18 |
$ increase |
% increase |
$18.0 |
$— |
$18.0 |
n/a |
- In Q4/19 we determined that the fair value of Shorcan was below its carrying value, resulting in a non-cash impairment charge of $18.0 million.
Net finance costs
(in millions of dollars) |
Q4/19 |
Q4/18 |
$ (decrease) |
% (decrease) |
$8.5 |
$10.4 |
$(1.9) |
(18)% |
- The decrease in net finance costs from Q4/18 to Q4/19 reflected lower interest expense due to decreased debt levels. The decrease was partially offset by a charge of $0.8 million relating to the implementation of IFRS 16, Leases (see Accounting and Control Matters - Changes in accounting policies - ADOPTION OF IFRS 16).
Income tax expense and effective tax rate
Income Tax Expense (in millions of dollars) |
Effective Tax Rate (%) |
||
Q4/19 |
Q4/18 |
Q4/19 |
Q4/18 |
$23.2 |
$21.5 |
33% |
24% |
- Excluding adjustments, primarily related to the items noted below, the effective tax rate would have been approximately 26% for both Q4/19 and Q4/18.
- In Q4/19, we incurred non-cash impairment charges of $18.0 million related to Shorcan, which is not deductible for income tax purposes. This resulted in an increase in our effective tax rate.
- In Q4/18, we realized a capital loss on the liquidation of a foreign wholly-owned subsidiary. The capital loss was carried back to reduce the income tax on the sale of NGX in 2017, resulting in a tax benefit of approximately $2.0 million.
Summary of Cash Flows
(in millions of dollars) |
Q4/19 |
Q4/18 |
$ increase/ |
Cash flows from operating activities |
$83.1 |
$68.4 |
$14.7 |
Cash flows from/(used in) financing activities |
(80.4) |
(146.3) |
65.9 |
Cash flows from/(used in) investing activities |
(27.1) |
27.0 |
(54.1) |
- In Q4/19, Cash flows from operating activities increased compared with Q4/18 reflecting an increase in cash related to trade and other receivables, and prepaid expenses, other assets and liabilities as well as trade and other payables. The increases were somewhat offset by an increase in income taxes paid.
- In Q4/19, Cash flows used in financing activities decreased from Q4/18 to Q4/19. In Q4/18, we used $400.0 million of cash to repay our Series A Debentures. There was also a decrease of $5.0 million in interest paid from Q4/18 to Q4/19. However, during Q4/19 there was a net increase in cash of $348.0 million used in financing activities to redeem Commercial Paper.
- In Q4/19, Cash flows used in investing activities were higher than in Q4/18 when we generated cash from investing activities. There was a decrease in cash of $32.5 million in Q4/19 compared with Q4/18 related to the net purchase of marketable securities. In addition, during Q4/18, we received proceeds from the sale of investments and businesses of $13.5 million.
Year ended December 31, 2019 (2019) Compared with Year ended December 31, 2018 (2018)
The information below reflects the financial statements of TMX Group for 2019 compared with 2018. Certain comparative information has been reclassified in order to conform with the financial presentation adopted in the current year.
(in millions of dollars, except per share |
2019 |
2018 |
$ increase/ (decrease) |
% increase/ (decrease) |
Revenue |
$806.9 |
$820.7 |
$(13.8) |
(2)% |
Operating expenses |
424.5 |
451.7 |
(27.2) |
(6)% |
Income from operations |
382.4 |
369.0 |
13.4 |
4% |
Net income |
247.6 |
286.0 |
(38.4) |
(13)% |
Adjusted net income13 |
300.2 |
289.5 |
10.7 |
4% |
Earnings per share |
||||
Basic |
4.42 |
5.14 |
(0.72) |
(14)% |
Diluted |
4.38 |
5.10 |
(0.72) |
(14)% |
Adjusted Earnings per share14 |
||||
Basic |
5.36 |
5.20 |
0.16 |
3% |
Diluted |
5.31 |
5.16 |
0.15 |
3% |
Cash flows from operating activities |
344.0 |
347.1 |
(3.1) |
(1)% |
13 See discussion under the heading "Non-IFRS Financial Measures". |
Net Income and Earnings per Share
Net income in 2019 was $247.6 million, or $4.42 per common share on a basic and $4.38 per common share on a diluted basis, compared with a net income of $286.0 million, or $5.14 per common share on a basic and $5.10 on a diluted basis, for 2018. The decrease in net income and earnings per share was largely driven by lower gains on the sale of investments in 2019 compared with 2018 and higher income tax expense:
- In 2018, we recognized a gain on the sale of our interest in TMX FTSE of $26.8 million before and after income tax (48 cents per basic and diluted share). In 2019, we recognized a gain of $2.3 million before income tax ($2.0 million after income tax, or 4 cents per basic and diluted share) on the sale of our interest in the Bermuda Stock Exchange.
- In 2018, there was a decrease in income tax expense of approximately $10.0 million relating to carrying back a capital loss to reduce prior year income taxes paid.
- In 2019, the Alberta general corporate income tax rate decreased. This change resulted in a decrease in net deferred income tax liabilities and a corresponding decrease in income tax expense of $4.3 million.
In addition, during 2019, we determined that the fair value of Shorcan was below its carrying value, resulting in a non-cash impairment charge of $18.0 million, which reduced net income.
Offsetting the declines in net income, income from operations increased by $13.4 million. The increase in income from operations from 2018 to 2019 was largely driven by a decrease in operating expenses of $27.2 million from 2018 to 2019. In 2018, we recorded a commodity tax provision of $7.6 million (10 cents per basic and diluted share) and a lease termination payment of $4.5 million (6 cents per basic and diluted share). There was also a decrease in severance costs of approximately $7.8 million and a reduction in short term employee performance incentive plan costs of approximately $6.8 million from 2018 to 2019. The decreases in expenses were somewhat offset by higher long term employee performance incentive plan costs of approximately $0.5 million. Revenue declined by $13.8 million from 2018 to 2019. There was a decrease in Capital Formation revenue driven by lower additional listings fees, a reduction in Other revenue as well as lower Equities and Fixed Income Trading revenue. These decreases were partially offset by an increase in Global Solutions, Insights and Analytics revenue, including higher revenue from Trayport and VisoTech (acquired May 15, 2019), as well as higher Derivatives Trading and Clearing and CDS revenue. In addition, net finance costs declined by $4.8 million from 2018 to 2019.
Adjusted Earnings per Share15 Reconciliation for 2019 and 2018
The following is a reconciliation of earnings per share to adjusted earnings per share:
2019 |
2018 |
|||
(unaudited) |
Basic |
Diluted |
Basic |
Diluted |
Earnings per share |
$4.42 |
$4.38 |
$5.14 |
$5.10 |
Adjustments related to: |
||||
Amortization of intangibles related to acquisitions |
0.68 |
0.67 |
0.68 |
0.68 |
Impairment charges |
0.32 |
0.32 |
— |
— |
Strategic re-alignment expenses16 |
0.05 |
0.05 |
— |
— |
Net income tax recovery on gain on sale of NGX |
— |
— |
(0.18) |
(0.18) |
Gain on sale of Contigo |
— |
— |
(0.04) |
(0.04) |
Gain on sale of interest in TMX FTSE |
— |
— |
(0.48) |
(0.48) |
Gain on reduction in our shareholding in CanDeal |
— |
— |
(0.02) |
(0.02) |
Gain on sale of interest in Bermuda Stock Exchange |
(0.04) |
(0.04) |
— |
— |
Commodity tax provision |
— |
— |
0.10 |
0.10 |
Transaction related costs17 |
0.01 |
0.01 |
— |
— |
Change in net deferred income tax liabilities resulting |
(0.08) |
(0.08) |
— |
— |
Adjusted earnings per share18 |
$5.36 |
$5.31 |
$5.20 |
$5.16 |
Weighted average number of common shares outstanding |
56,045,211 |
56,570,669 |
55,635,123 |
56,093,543 |
Adjusted diluted earnings per share increased by 3% from $5.16 in 2018 to $5.31 in 2019. The increase in adjusted diluted earnings per share from 2018 to 2019 was largely driven by lower operating expenses related to lease termination, a decrease in severance costs, a reduction in short term employee performance incentive plan costs as well as lower net finance costs. The decreases in expenses were slightly offset by higher long term employee performance incentive plan costs. There was also an increase in revenue from Global Solutions, Insights and Analytics revenue, including higher revenue from Trayport and VisoTech (acquired May 15, 2019), as well as higher Derivatives Trading and Clearing and CDS revenue. The increases in revenue were more than offset by decreases in Capital Formation revenue driven by lower additional listings fees, a reduction in Other revenue as well as lower Equities and Fixed Income Trading revenue. The increase in adjusted diluted earnings per share was also somewhat reduced by an increase in the number of weighted-average common shares outstanding in 2019 compared with 2018.
15 See discussion under the heading "Non-IFRS Financial Measures". |
Adjusted Net Income19 Reconciliation for 2019 and 2018
The following is a reconciliation of net income to adjusted net income:
(in millions of dollars) |
2019 |
2018 |
$ increase / |
% increase / |
Net income |
$247.6 |
$286.0 |
$(38.4) |
(13)% |
Adjustments related to: |
||||
Amortization of intangibles related to |
37.5 |
37.7 |
(0.2) |
(1)% |
Impairment charges |
18.0 |
— |
18.0 |
n/a |
Strategic re-alignment expenses20 |
2.8 |
— |
2.8 |
n/a |
Net income tax recovery on gain on sale of |
— |
(10.0) |
10.0 |
(100)% |
Gain on sale of Contigo |
— |
(2.3) |
2.3 |
(100)% |
Gain on sale of interest in TMX FTSE |
— |
(26.8) |
26.8 |
(100)% |
Gain on reduction in our shareholding in |
— |
(0.9) |
0.9 |
(100)% |
Gain on sale of interest in Bermuda Stock |
(2.0) |
— |
(2.0) |
n/a |
Commodity tax provision |
— |
5.6 |
(5.6) |
(100)% |
Transaction related costs21 |
0.6 |
0.2 |
0.4 |
200% |
Change in net deferred income tax liabilities |
(4.3) |
— |
(4.3) |
n/a |
Adjusted net income22 |
$300.2 |
$289.5 |
$10.7 |
4% |
Adjusted net income increased by 4% from $289.5 million in 2018 to $300.2 million in 2019. The increase in adjusted net income from 2018 to 2019 was largely driven by lower operating expenses related to lease termination, a decrease in severance costs, a reduction in short term employee performance incentive plan costs as well as lower net finance costs. The decreases in expenses were slightly offset by higher long term employee performance incentive plan costs. There was also an increase in revenue from Global Solutions, Insights and Analytics revenue, including higher revenue from Trayport and VisoTech (acquired May 15, 2019), as well as higher Derivatives Trading and Clearing and CDS revenue. The increases in revenue were more than offset by decreases in Capital Formation revenue driven by lower additional listings fees, a reduction in Other revenue as well as lower Equities and Fixed Income Trading revenue.
19 See discussion under the heading "Non-IFRS Financial Measures". |
For additional information on net income, earnings per share, adjusted earnings per share and adjusted net income, see Revenue, Operating expenses and Additional information in our 2019 MD&A.
FINANCIAL STATEMENTS GOVERNANCE PRACTICE
The Finance & Audit Committee of the Board of Directors of TMX Group (Board) reviewed this press release as well as the 2019 audited annual consolidated financial statements and related Management's Discussion and Analysis (MD&A) and recommended they be approved by the Board of Directors. Following review by the full Board, the 2019 audited annual consolidated financial statements, MD&A and the contents of this press release were approved.
CONSOLIDATED FINANCIAL STATEMENTS
Our 2019 audited annual consolidated financial statements are prepared in accordance with IFRS and are reported in Canadian dollars unless otherwise indicated. Financial measures contained in the MD&A and this press release are based on financial statements prepared in accordance with IFRS, unless otherwise specified and are in Canadian dollars unless otherwise indicated.
ACCESS TO MATERIALS
TMX Group has filed its 2019 audited annual consolidated financial statements and MD&A with Canadian securities regulators. These documents may be accessed through www.sedar.com, or on the TMX Group website at www.tmx.com. We are not incorporating information contained on the website in this press release. In addition, copies of these documents will be available upon request, at no cost, by contacting TMX Group Investor Relations by phone at (416) 947-4277 or by e-mail at [email protected].
CAUTION REGARDING FORWARD-LOOKING INFORMATION
This press release of TMX Group contains "forward-looking information" (as defined in applicable Canadian securities legislation) that is based on expectations, assumptions, estimates, projections and other factors that management believes to be relevant as of the date of this press release. Often, but not always, such forward-looking information can be identified by the use of forward-looking words such as "plans," "expects," "is expected," "budget," "scheduled," "targeted," "estimates," "forecasts," "intends," "anticipates," "believes," or variations or the negatives of such words and phrases or statements that certain actions, events or results "may," "could," "would," "might," or "will" be taken, occur or be achieved or not be taken, occur or be achieved. Forward-looking information, by its nature, requires us to make assumptions and is subject to significant risks and uncertainties which may give rise to the possibility that our expectations or conclusions will not prove to be accurate and that our assumptions may not be correct.
Examples of forward-looking information include, but are not limited to, growth objectives; the ability to integrate VisoTech into Trayport and the expected impact of the VisoTech acquisition on TMX Group's results; the proposed relaunch of the Two-Year Government of Canada Bond Futures; our target dividend payout ratio; the ability of TMX Group to de-leverage and the timing thereof; the modernization of clearing platforms, including the expected cash expenditures related to the modernization of our clearing platforms and the timing of the modernization and the anticipated savings; other statements related to cost reductions; the impact of market capitalization of TSX and TSXV issuers overall (from 2018 to 2019) on TMX Group's revenue; future changes to TMX Group's anticipated statutory income tax rate for 2019; factors relating to stock, and derivatives exchanges and clearing houses and the business, strategic goals and priorities, market conditions, pricing, proposed technology and other initiatives, financial results or financial condition, operations and prospects of TMX Group which are subject to significant risks and uncertainties.
These risks include: competition from other exchanges or marketplaces, including alternative trading systems and new technologies, on a national and international basis; dependence on the economy of Canada; adverse effects on our results caused by global economic conditions or uncertainties including changes in business cycles that impact our sector; failure to retain and attract qualified personnel; geopolitical and other factors which could cause business interruption; dependence on information technology; vulnerability of our networks and third party service providers to security risks, including cyber-attacks; failure to properly identify or implement our strategies; regulatory constraints; constraints imposed by our level of indebtedness, risks of litigation or other proceedings; dependence on adequate numbers of customers; failure to develop, market or gain acceptance of new products; failure to effectively integrate acquisitions to achieve planned economics, or divest underperforming businesses; currency risk; adverse effect of new business activities; adverse effects from business divestitures; not being able to meet cash requirements because of our holding company structure and restrictions on paying dividends; dependence on third-party suppliers and service providers; dependence of trading operations on a small number of clients; risks associated with our clearing operations; challenges related to international expansion; restrictions on ownership of TMX Group common shares; inability to protect our intellectual property; adverse effect of a systemic market event on certain of our businesses; risks associated with the credit of customers; cost structures being largely fixed; the failure to realize cost reductions in the amount or the time frame anticipated; dependence on market activity that cannot be controlled; the regulatory constraints that apply to the business of TMX Group and its regulated subsidiaries, costs of on exchange clearing and depository services, trading volumes (which could be higher or lower than estimated) and revenues; future levels of revenues being lower than expected or costs being higher than expected.
Forward-looking information is based on a number of assumptions which may prove to be incorrect, including, but not limited to, assumptions in connection with the ability of TMX Group to successfully compete against global and regional marketplaces; business and economic conditions generally; exchange rates (including estimates of exchange rates from Canadian dollars to the U.S. dollar or GBP), commodities prices, the level of trading and activity on markets, and particularly the level of trading in TMX Group's key products; business development and marketing and sales activity; the continued availability of financing on appropriate terms for future projects; productivity at TMX Group, as well as that of TMX Group's competitors; market competition; research and development activities; the successful introduction and client acceptance of new products; successful introduction of various technology assets and capabilities; the impact on TMX Group and its customers of various regulations; TMX Group's ongoing relations with its employees; and the extent of any labour, equipment or other disruptions at any of its operations of any significance other than any planned maintenance or similar shutdowns.
In addition to the assumptions outlined above, forward looking information related to long term revenue cumulative average annual growth rate (CAGR) objectives, and long term adjusted earnings per share CAGR objectives are based on assumptions that include, but not limited to:
- TMX Group's success in achieving growth initiatives and business objectives;
- continued investment in growth businesses and in transformation initiatives including next generation post-trade systems;
- no significant changes to our effective tax rate, recurring revenue, and number of shares outstanding;
- moderate levels of market volatility;
- level of listings, trading, and clearing consistent with historical activity;
- economic growth consistent with historical activity;
- no significant changes in regulations;
- continued disciplined expense management across our business;
- continued re-prioritization of investment towards enterprise solutions and new capabilities; and
- free cash flow generation consistent with historical run rate.
While we anticipate that subsequent events and developments may cause our views to change, we have no intention to update this forward-looking information, except as required by applicable securities law. This forward-looking information should not be relied upon as representing our views as of any date subsequent to the date of this press release. We have attempted to identify important factors that could cause actual actions, events or results to differ materially from those current expectations described in forward-looking information. However, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended and that could cause actual actions, events or results to differ materially from current expectations. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. These factors are not intended to represent a complete list of the factors that could affect us. A description of the above-mentioned items is contained under the heading RISKS AND UNCERTAINTIES in the 2019 Annual MD&A.
About TMX Group (TSX:X)
TMX Group operates global markets, and builds digital communities and analytic solutions that facilitate the funding, growth and success of businesses, traders and investors. TMX Group's key operations include Toronto Stock Exchange, TSX Venture Exchange, TSX Alpha Exchange, The Canadian Depository for Securities, Montréal Exchange, Canadian Derivatives Clearing Corporation, and Trayport which provide listing markets, trading markets, clearing facilities, depository services, technology solutions, data products and other services to the global financial community. TMX Group is headquartered in Toronto and operates offices across North America (Montréal, Calgary, Vancouver and New York), as well as in key international markets including London and Singapore. For more information about TMX Group, visit our website at www.tmx.com. Follow TMX Group on Twitter: @TMXGroup.
Teleconference / Audio Webcast
TMX Group will host a teleconference / audio webcast to discuss the financial results for Q4/19.
Time: 8:00 a.m. - 9:00 a.m. ET on Tuesday, February 11, 2020.
To teleconference participants: Please call the following number at least 15 minutes prior to the start of the event.
The audio webcast of the conference call will also be available on TMX Group's website at www.tmx.com, under Investor Relations.
Teleconference Number: 647-427-7450 or 1-888-231-8191
Audio Replay: 416-849-0833 or 1-855-859-2056
The pass code for the replay is 1288271.
TMX GROUP LIMITED
Consolidated Balance Sheets
(In millions of Canadian dollars) |
||||||
(Unaudited) |
December 31, 2019 |
December 31, 2018 |
||||
Assets |
||||||
Current assets: |
||||||
Cash and cash equivalents |
$ |
149.0 |
$ |
175.1 |
||
Restricted cash and cash equivalents |
151.5 |
131.4 |
||||
Marketable securities |
80.4 |
55.6 |
||||
Trade and other receivables |
105.3 |
105.9 |
||||
Balances with Participants and Clearing Members |
26,588.9 |
25,991.4 |
||||
Other current assets |
30.1 |
25.9 |
||||
27,105.2 |
26,485.3 |
|||||
Non-current assets: |
||||||
Goodwill and intangible assets |
5,041.2 |
5,054.9 |
||||
Right-of-use assets |
93.0 |
— |
||||
Other non-current assets |
96.7 |
92.6 |
||||
Deferred income tax assets |
23.6 |
25.5 |
||||
Total Assets |
$ |
32,359.7 |
$ |
31,658.3 |
||
Liabilities and Equity |
||||||
Current liabilities: |
||||||
Trade and other payables |
$ |
102.7 |
$ |
110.2 |
||
Participants' tax withholdings |
151.5 |
131.4 |
||||
Balances with Participants and Clearing Members |
26,588.9 |
25,991.4 |
||||
Debt |
239.6 |
319.5 |
||||
Credit and liquidity facilities drawn |
8.2 |
— |
||||
Other current liabilities |
62.1 |
109.3 |
||||
27,153.0 |
26,661.8 |
|||||
Non-current liabilities: |
||||||
Debt |
747.1 |
746.8 |
||||
Lease liabilities |
95.4 |
— |
||||
Other non-current liabilities |
64.1 |
54.0 |
||||
Deferred income tax liabilities |
801.0 |
814.9 |
||||
Total Liabilities |
28,860.6 |
28,277.5 |
||||
Equity: |
||||||
Share capital |
2,965.1 |
2,938.0 |
||||
Contributed surplus |
12.1 |
12.3 |
||||
Retained earnings |
512.9 |
409.0 |
||||
Accumulated other comprehensive income |
9.0 |
21.5 |
||||
Total Equity |
3,499.1 |
3,380.8 |
||||
Commitments and contingent liabilities |
||||||
Total Liabilities and Equity |
$ |
32,359.7 |
$ |
31,658.3 |
TMX GROUP LIMITED
Consolidated Income Statements
(In millions of Canadian dollars, except per share amounts) |
For the three months |
For the year ended |
||||||||
2019 |
2018 |
2019 |
2018 |
|||||||
Revenue |
$ |
202.8 |
$ |
211.2 |
$ |
806.9 |
$ |
820.7 |
||
REPO and collateral interest: |
||||||||||
Interest income |
115.5 |
73.6 |
353.2 |
208.3 |
||||||
Interest expense |
(115.5) |
(73.6) |
(353.2) |
(208.3) |
||||||
Net REPO and collateral interest |
— |
— |
— |
— |
||||||
Total revenue |
202.8 |
211.2 |
806.9 |
820.7 |
||||||
Compensation and benefits |
47.0 |
53.4 |
207.9 |
220.1 |
||||||
Information and trading systems |
13.9 |
15.2 |
51.9 |
52.4 |
||||||
Selling, general and administration |
25.9 |
27.6 |
81.4 |
108.9 |
||||||
Depreciation and amortization |
20.4 |
18.0 |
79.6 |
70.3 |
||||||
Strategic re-alignment expenses |
(0.9) |
— |
3.7 |
— |
||||||
Total operating expenses |
106.3 |
114.2 |
424.5 |
451.7 |
||||||
Income from operations |
96.5 |
97.0 |
382.4 |
369.0 |
||||||
Share of income from equity accounted investees |
0.7 |
0.8 |
3.8 |
3.0 |
||||||
Impairment charges |
(18.0) |
— |
(18.0) |
— |
||||||
Other income |
— |
3.9 |
2.3 |
30.7 |
||||||
Finance income (costs): |
||||||||||
Finance income |
1.0 |
0.6 |
4.1 |
3.8 |
||||||
Finance costs |
(9.5) |
(11.0) |
(39.7) |
(44.2) |
||||||
Net finance costs |
(8.5) |
(10.4) |
(35.6) |
(40.4) |
||||||
Income before income taxes |
70.7 |
91.3 |
334.9 |
362.3 |
||||||
Income tax expense |
23.2 |
21.5 |
87.3 |
76.3 |
||||||
Net income |
$ |
47.5 |
$ |
69.8 |
$ |
247.6 |
$ |
286.0 |
||
Earnings per share: |
||||||||||
Net income - Basic |
$ |
0.85 |
$ |
1.25 |
$ |
4.42 |
$ |
5.14 |
||
Net income - Diluted |
$ |
0.84 |
$ |
1.24 |
$ |
4.38 |
$ |
5.10 |
TMX GROUP LIMITED
Consolidated Statements of Comprehensive Income
(In millions of Canadian dollars) |
For the three months ended |
For the year ended |
|||||||||
2019 |
2018 |
2019 |
2018 |
||||||||
Net income |
$ |
47.5 |
$ |
69.8 |
$ |
247.6 |
$ |
286.0 |
|||
Other comprehensive income (loss): |
|||||||||||
Items that will not be reclassified to the |
|||||||||||
Actuarial (loss) on defined benefit pension and |
(2.4) |
0.9 |
(2.4) |
0.9 |
|||||||
Total items that will not be reclassified to the consolidated income statements |
(2.4) |
0.9 |
(2.4) |
0.9 |
|||||||
Items that may be reclassified subsequently to the |
|||||||||||
Unrealized (loss) on translating financial statements |
51.2 |
26.2 |
(12.5) |
21.3 |
|||||||
Reclassification to net income of foreign currency |
— |
— |
— |
(2.7) |
|||||||
Total items that may be reclassified subsequently to the consolidated income statements |
51.2 |
26.2 |
(12.5) |
18.6 |
|||||||
Total comprehensive income |
$ |
96.3 |
$ |
96.9 |
$ |
232.7 |
$ |
305.5 |
TMX GROUP LIMITED
Consolidated Statements of Changes in Equity
(In millions of Canadian dollars) |
For the year ended December 31, 2019 |
|||||||||
Share capital |
Contributed |
Accumulated |
Retained |
Total |
||||||
Balance at January 1, 2019 |
$ |
2,938.0 |
$ |
12.3 |
$ |
21.5 |
$ |
409.0 |
$ |
3,380.8 |
Net income |
— |
— |
— |
247.6 |
247.6 |
|||||
Other comprehensive income (loss): |
||||||||||
Foreign currency translation differences |
— |
— |
(12.5) |
— |
(12.5) |
|||||
Actuarial gains on defined benefit pension and other post- |
— |
— |
— |
(2.4) |
(2.4) |
|||||
Total comprehensive income (loss) |
— |
— |
(12.5) |
245.2 |
232.7 |
|||||
Dividends to equity holders |
— |
— |
— |
(141.3) |
(141.3) |
|||||
Proceeds from exercised share options |
24.4 |
— |
— |
— |
24.4 |
|||||
Cost of exercised share options |
2.7 |
(2.7) |
— |
— |
— |
|||||
Cost of share option plan |
— |
2.5 |
— |
— |
2.5 |
|||||
Balance at December 31, 2019 |
$ |
2,965.1 |
$ |
12.1 |
$ |
9.0 |
$ |
512.9 |
$ |
3,499.1 |
TMX GROUP LIMITED
Consolidated Statements of Changes in Equity
(In millions of Canadian dollars) |
For the year ended December 31, 2018 |
|||||||||||||
Share capital |
Contributed |
Accumulated |
Retained |
Total |
||||||||||
Balance at January 1, 2018 |
$ |
2,915.5 |
$ |
11.8 |
$ |
2.9 |
$ |
252.6 |
$ |
3,182.8 |
||||
Adjustment on initial application of IFRS 15 |
— |
— |
— |
(5.8) |
(5.8) |
|||||||||
Adjusted balance at January 1, 2018 |
2,915.5 |
11.8 |
2.9 |
246.8 |
3,177.0 |
|||||||||
Net income |
— |
— |
— |
286.0 |
286.0 |
|||||||||
Other comprehensive income (loss): |
||||||||||||||
Foreign currency translation differences |
— |
— |
21.3 |
— |
21.3 |
|||||||||
Reclassification to net income of foreign currency translation differences |
— |
— |
(2.7) |
— |
(2.7) |
|||||||||
Actuarial gains on defined benefit pension and other post- |
— |
— |
— |
0.9 |
0.9 |
|||||||||
Total comprehensive income |
— |
— |
18.6 |
286.9 |
305.5 |
|||||||||
Dividends to equity holders |
— |
— |
— |
(124.7) |
(124.7) |
|||||||||
Proceeds from exercised share options |
20.1 |
— |
— |
— |
20.1 |
|||||||||
Cost of exercised share options |
2.4 |
(2.4) |
— |
— |
— |
|||||||||
Cost of share option plan |
— |
2.9 |
— |
— |
2.9 |
|||||||||
Balance at December 31, 2018 |
$ |
2,938.0 |
$ |
12.3 |
$ |
21.5 |
$ |
409.0 |
$ |
3,380.8 |
TMX GROUP LIMITED
Consolidated Statements of Cash Flows
(In millions of Canadian dollars) |
For the three months ended |
For the year ended December |
|||||||
2019 |
2018 |
2019 |
2018 |
||||||
Cash flows from (used in) operating activities: |
|||||||||
Income before income taxes |
$ |
70.7 |
$ |
91.3 |
$ |
334.9 |
$ |
362.3 |
|
Adjustments to determine net cash flows: |
|||||||||
Depreciation and amortization |
20.4 |
18.0 |
79.6 |
70.3 |
|||||
Impairment charges |
18.0 |
0.1 |
18.0 |
— |
|||||
Other income |
— |
(3.9) |
(2.3) |
(30.7) |
|||||
Net finance costs |
8.5 |
10.4 |
35.6 |
40.4 |
|||||
Share of income of equity accounted investees |
(0.7) |
(0.8) |
(3.8) |
(3.0) |
|||||
Cost of share option plan |
0.3 |
0.6 |
2.5 |
2.9 |
|||||
Unrealized foreign exchange gains (losses) |
1.5 |
3.9 |
1.5 |
1.4 |
|||||
Trade and other receivables, and prepaid expenses |
(2.9) |
(9.0) |
(0.2) |
(11.2) |
|||||
Trade and other payables |
10.9 |
7.4 |
(14.1) |
24.4 |
|||||
Provisions |
(2.0) |
0.7 |
(4.2) |
6.1 |
|||||
Deferred revenue |
(18.6) |
(25.7) |
(2.4) |
(0.2) |
|||||
Other assets and liabilities |
2.8 |
(1.5) |
9.2 |
(2.5) |
|||||
Income taxes paid |
(25.8) |
(23.1) |
(110.3) |
(113.1) |
|||||
83.1 |
68.4 |
344.0 |
347.1 |
||||||
Cash flows (used in) from financing activities: |
|||||||||
Interest paid |
(21.1) |
(26.1) |
(38.4) |
(43.4) |
|||||
Net settlement on derivative instruments |
— |
0.6 |
0.4 |
0.6 |
|||||
Reduction in obligations under finance leases |
(2.1) |
— |
(8.2) |
— |
|||||
Proceeds from exercised options |
2.1 |
0.8 |
24.4 |
20.1 |
|||||
Dividends paid to equity holders |
(37.1) |
(32.4) |
(141.3) |
(124.7) |
|||||
Credit facility and debt financing fees |
— |
0.3 |
— |
(1.1) |
|||||
Repayment of debenture |
— |
(400.0) |
— |
(400.0) |
|||||
Proceeds from issuance of debenture |
— |
— |
— |
200.0 |
|||||
Net movement of Commercial Paper |
(25.7) |
322.3 |
(79.9) |
(76.6) |
|||||
Credit and liquidity facilities drawn, net |
3.5 |
(11.8) |
8.2 |
— |
|||||
(80.4) |
(146.3) |
(234.8) |
(425.1) |
||||||
Cash flows (used in) from investing activities: |
|||||||||
Interest received |
1.0 |
0.6 |
4.1 |
3.8 |
|||||
Dividends received |
(0.1) |
— |
2.8 |
8.2 |
|||||
Additions to premises and equipment and intangible assets |
(16.6) |
(14.0) |
(57.6) |
(58.8) |
|||||
Acquisition of VisoTech, net of cash |
— |
5.8 |
(23.6) |
5.8 |
|||||
Proceeds from sales |
— |
5.7 |
3.8 |
5.7 |
|||||
Proceeds from reduction/sale of equity accounted investees |
— |
7.8 |
— |
78.2 |
|||||
Marketable securities, net |
(11.4) |
21.1 |
(24.8) |
(5.5) |
|||||
(27.1) |
27.0 |
(95.3) |
37.4 |
||||||
Decrease in cash and cash equivalents |
(24.4) |
(50.9) |
13.9 |
(40.6) |
|||||
Cash and cash equivalents, beginning of the period |
172.7 |
185.2 |
135.3 |
175.0 |
|||||
Unrealized foreign exchange gains (losses) on cash and cash equivalents |
|||||||||
held in foreign currencies |
0.7 |
1.0 |
(0.2) |
0.9 |
|||||
Cash and cash equivalents, net, end of the period |
$ |
149.0 |
$ |
135.3 |
$ |
149.0 |
$ |
135.3 |
SOURCE TMX Group Limited
Catherine Kee, Senior Manager, Corporate Communications & Media Relations, TMX Group, 416-814-8834, [email protected]; Julie Park, Manager, Investor Relations, TMX Group, 416-365-3892, [email protected]
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