TMX Group Limited Reports Results for Third Quarter 2019

• Revenue of $196.3 million, up 2% from $192.8 million in Q3/18
  
  
• Diluted earnings per share of $1.09, up 7% from $1.02 in Q3/18
  
  
• Adjusted diluted earnings per share of $1.25, up 5% from $1.19 in Q3/18
  
  
• Increased quarterly dividend by 4 cents per common share, up 6% to 66 cents per share

TORONTO, Nov. 7, 2019 /CNW/ - TMX Group Limited [TSX:X] ("TMX Group") today announced results for the third quarter ended September 30, 2019.

Commenting on Q3/19 and the company's outlook, Lou Eccleston, Chief Executive Officer of TMX Group, said:

"TMX's global expansion efforts and commitment to strategic execution continued to drive overall revenue growth in the third quarter, highlighted by gains in our derivatives business and Trayport, compared to the same period last year. As we look to the fourth quarter of the year and beyond, TMX remains focused on seeking out strategic opportunities to capitalize on emerging industry trends to better serve the evolving needs of our diverse and international client base, while delivering value to shareholders."

Commenting on the company's performance in Q3/19, John McKenzie, Chief Financial Officer of TMX Group, said:

"We are pleased to announce our best third quarter in terms of highest revenue, diluted earnings per share and adjusted diluted earnings per share. We reported 2% revenue growth and 7% growth in diluted earnings per share compared with last year. The revenue growth was driven by significantly higher Derivatives Trading and Clearing revenue as well as increased revenue from Trayport. The growth in earnings was fueled by both higher revenues and lower operating expenses from continued, disciplined cost management.

Our solid ongoing financial performance gave us confidence to announce a second increase in the quarterly dividend for 2019. With a four cent, or 6%, increase in our dividend, our dividend payout ratio for the past four quarters of 47% is within our targeted payout range of 40 to 50 percent of adjusted diluted EPS."

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), commodity tax provision, and change in net deferred income tax liabilities resulting from decrease in Alberta corporate income tax rate. 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.

Three months ended September 30, 2019 Compared with Three months ended September 30, 2018

The information below reflects the financial statements of TMX Group for the quarter ended September 30, 2019 compared with the quarter ended September 30, 2018.

(in millions of dollars, except per share amounts)	Q3/19	Q3/18	$ increase / (decrease)	% increase / (decrease)
Revenue	$196.3	$192.8	$3.5	2%
Operating expenses	104.7	106.3	(1.6)	(2)%
Income from operations	91.6	86.5	5.1	6%
Net income	61.7	57.5	4.2	7%
Adjusted net income^1	70.9	66.7	4.2	6%
Earnings per share
Basic	1.10	1.03	0.07	7%
Diluted	1.09	1.02	0.07	7%
Adjusted Earnings per share^2
Basic	1.26	1.20	0.06	5%
Diluted	1.25	1.19	0.06	5%
Cash flows from operating activities	96.9	100.4	(3.5)	(3)%

^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 Q3/19 was $61.7 million, or $1.10 per common share on a basic and $1.09 on a diluted basis, compared with a net income of $57.5 million, or $1.03 per common share on a basic and $1.02 on a diluted basis, for Q3/18. The increase in net income and earnings per share was largely driven by higher revenue and lower operating expenses. The increase in adjusted diluted earnings per share was somewhat reduced by an increase in the number of weighted-average common shares outstanding in Q3/19 compared with Q3/18.

Adjusted Earnings per Share³ Reconciliation for Q3/19 and Q3/18

The following is a reconciliation of earnings per share to adjusted earnings per share:

	Q3/19		Q3/18
(unaudited)	Basic	Diluted	Basic	Diluted
Earnings per share	$1.10	$1.09	$1.03	$1.02
Adjustments related to:
Amortization of intangibles related to acquisitions	0.16	0.16	0.17	0.17
Adjusted earnings per share	$1.26	$1.25	$1.20	$1.19
Weighted average number of common shares outstanding	56,121,234	56,757,236	55,730,037	56,244,426

Adjusted diluted earnings per share increased by 5% from $1.19 in Q3/18 to $1.25 in Q3/19 largely driven by higher revenue and lower operating expenses. The increase in adjusted diluted earnings per share was somewhat reduced by an increase in the number of weighted-average common shares outstanding in Q3/19 compared with Q3/18.

Adjusted Net Income⁴ Reconciliation for Q3/19 and Q3/18

The following is a reconciliation of net income to adjusted net income:

(in millions of dollars) (unaudited)	Q3/19	Q3/18	$ increase / (decrease)	% increase / (decrease)
Net income	$61.7	$57.5	$4.2	7%
Adjustments related to:
Amortization of intangibles related to acquisitions	9.2	9.2	0.0	0%
Adjusted net income	$70.9	$66.7	$4.2	6%

Adjusted net income increased by 6% from $66.7 million in Q3/18 to $70.9 million in Q3/19 largely driven by higher revenue and lower operating expenses.

^3

See discussion under the heading "Non-IFRS Financial Measures".

^4

See discussion under the heading "Non-IFRS Financial Measures".

Revenue

(in millions of dollars)	Q3/19	Q3/18	$ increase / (decrease)	% increase / (decrease)
Capital Formation	$43.7	$45.1	$(1.4)	(3)%
Equities and Fixed Income Trading and Clearing	45.3	45.4	(0.1)	0%
Derivatives Trading and Clearing	33.5	30.2	3.3	11%
Global Solutions, Insights and Analytics	73.6	72.1	1.5	2%
Other	0.2	—	0.2	n/a
	$196.3	$192.8	$3.5	2%

Revenue was $196.3 million in Q3/19, up $3.5 million or 2% from $192.8 million in Q3/18 largely attributable to an increase in revenue from Derivatives Trading and Clearing, Trayport and CDS. The increases were partially offset by decreases in Capital Formation and Equities and Fixed Income Trading revenue.

Operating expenses

(in millions of dollars)	Q3/19	Q3/18	$ increase / (decrease)	% increase / (decrease)
Compensation and benefits	$55.8	$54.8	$1.0	2%
Information and trading systems	13.3	12.7	0.6	5%
Selling, general and administration	16.1	21.4	(5.3)	(25)%
Depreciation and amortization	19.5	17.4	2.1	12%
	$104.7	$106.3	$(1.6)	(2)%

Operating expenses in Q3/19 were $104.7 million, down $1.6 million or 2%, from $106.3 million in Q3/18. The decrease in costs was largely related to lower project spending including amounts paid to external consultants as well as lower short term employee performance incentive plan and severance costs. These decreases were partially offset by an increase of approximately $3.6 million in long term employee performance incentive plan costs driven by the increase in our share price.

Nine months ended September 30, 2019 Compared with Nine months ended September 30, 2018

The information below reflects the financial statements of TMX Group for the nine months ended September 30, 2019 compared with the nine months ended September 30, 2018.

(in millions of dollars, except per share amounts)	Nine months ended September 30, 2019	Nine months ended September 30, 2018	$ increase / (decrease)	% increase / (decrease)
Revenue	$604.1	$609.5	$(5.4)	(1)%
Operating expenses	318.2	337.5	(19.3)	(6)%
Income from operations	285.9	272.0	13.9	5%
Net income	200.1	216.2	(16.1)	(7)%
Adjusted net income^5	225.9	215.6	10.3	5%
Earnings per share
Basic	3.57	3.89	(0.32)	(8)%
Diluted	3.54	3.86	(0.32)	(8)%
Adjusted Earnings per share^6
Basic	4.02	3.88	0.14	4%
Diluted	3.99	3.84	0.15	4%
Cash flows from operating activities	260.9	278.7	(17.8)	(6)%

Net Income and Earnings per Share

Net income in the nine months ended September 30, 2019 was $200.1 million, or $3.57 per common share on a basic and $3.54 per common share on a diluted basis, compared with a net income of $216.2 million, or $3.89 per common share on a basic and $3.86 on a diluted basis, for the nine months ended September 30, 2018. The decrease in net income and earnings per share was largely driven by lower gains on the sale of investments in the nine months ended September 30, 2019 compared with the nine months ended September 30, 2018 and higher income tax expense:

• In the nine months ended September 30, 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 the nine months ended September 30, 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 the nine months ended September 30, 2018, there was a decrease in income tax expense of approximately $11.8 million relating to realizing and utilizing a capital loss. This capital loss was applied to eliminate income tax otherwise payable on the sale of our interest in TMX FTSE in the nine months ended September 30, 2018 and reduce income tax paid on our sale of NGX in 2017. Also, the non-taxable portion of the capital gain on the sale of our interest in the TMX FTSE resulted in a tax benefit of approximately $3.3 million. In the nine months ended September 30, 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.

Revenue declined by $5.4 million from the nine months ended September 30, 2018 to the nine months ended September 30, 2019 largely reflecting a decrease in Capital Formation revenue driven by a decline in additional listing fee revenue, partially offset by higher Trayport and Derivatives Trading and Clearing revenue. However there was a decrease in operating expenses of $19.3 million from the nine months ended September 30, 2018 to the nine months ended September 30, 2019 as well as lower net finance costs. In the nine months ended September 30, 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 $7.4 million from the nine months ended September 30, 2018 to the nine months ended September 30, 2019.

^5

See discussion under the heading "Non-IFRS Financial Measures".

^6

See discussion under the heading "Non-IFRS Financial Measures".

Adjusted Earnings per Share⁷ Reconciliation for Nine months ended September 30, 2019 and Nine months ended September 30, 2018

The following is a reconciliation of earnings per share to adjusted earnings per share:

	Nine months ended September 30, 2019		Nine months ended September 30, 2018
(unaudited)	Basic	Diluted	Basic	Diluted
Earnings per share	$3.57	$3.54	$3.89	$3.86
Adjustments related to:
Amortization of intangibles related to acquisitions	0.50	0.50	0.51	0.50
Strategic re-alignment expenses^8	0.06	0.06	—	—
Gain on sale of interest in TMX FTSE	—	—	(0.48)	(0.48)
Net income tax recovery on gain on sale of NGX	—	—	(0.14)	(0.14)
Gain on sale of interest in Bermuda Stock Exchange	(0.04)	(0.04)	—	—
Commodity tax provision	—	—	0.10	0.10
Transaction related costs^9	0.01	0.01	0.00	0.00
Change in net deferred income tax liabilities resulting from decrease in Alberta corporate income tax rate	(0.08)	(0.08)	—	—
Adjusted earnings per share^10	$4.02	$3.99	$3.88	$3.84
Weighted average number of common shares outstanding	55,990,577	56,489,973	55,585,391	56,064,375

Adjusted diluted earnings per share increased by 4% from $3.84 in the nine months ended September 30, 2018 to $3.99 in the nine months ended September 30, 2019. The increase in adjusted diluted earnings per share was largely driven by lower operating expenses related to lease termination and severance as well as lower net finance costs. The increase was partially offset by a decrease in Capital Formation revenue driven by a decline in additional listing fee revenue, partially offset by higher Trayport 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 nine months ended September 30, 2019 compared with nine months ended September 30, 2018.

^7

See discussion under the heading "Non-IFRS Financial Measures".

^8

Please refer to "Initiatives and Accomplishments - Strategic re-alignment" in our Q3/19 MD&A for more details.

^9

Includes costs related to the integration of Trayport in 2018, and costs related to an acquisition in 2019.

^10

See discussion under the heading "Non-IFRS Financial Measures".

Adjusted Net Income¹¹ Reconciliation for Nine months ended September 30, 2019 and Nine months ended September 30, 2018

The following is a reconciliation of net income to adjusted net income:

(in millions of dollars) (unaudited)	Nine months ended September 30, 2019	Nine months ended September 30, 2018	$ increase / (decrease)	% increase / (decrease)
Net income	$200.1	$216.2	$(16.1)	(7)%
Adjustments related to:
Amortization of intangibles related to acquisitions	28.1	28.4	(0.3)	(1)%
Strategic re-alignment expenses^12	3.4	—	3.4	n/a
Gain on sale of interest in TMX FTSE	—	(26.8)	26.8	(100)%
Net income tax recovery on gain on sale of NGX	—	(8.0)	8.0	(100)%
Gain on sale of interest in Bermuda Stock Exchange	(2.0)	—	(2.0)	n/a
Commodity tax provision	—	5.6	(5.6)	(100)%
Transaction related costs^13	0.6	0.2	0.4	200%
Change in net deferred income tax liabilities resulting from decrease in Alberta corporate income tax rate	(4.3)	—	(4.3)	n/a
Adjusted net income^14	$225.9	$215.6	$10.3	5%

Adjusted net income increased by 5% from $215.6 million in the nine months ended September 30, 2018 to $225.9 million in the nine months ended September 30, 2019. The increase was largely driven by lower operating expenses related to lease termination and severance as well as lower net finance costs. There was also an increase in revenue from Trayport and Derivatives Trading and Clearing. The increases were partially offset by a decrease in Capital Formation revenue driven by a decline in additional listing fee revenue.

^11

See discussion under the heading "Non-IFRS Financial Measures".

^12

Please refer to "Initiatives and Accomplishments - Strategic re-alignment" in our Q3/19 MD&A for more details.

^13

Includes costs related to the integration of Trayport in 2018, and costs related to an acquisition in 2019.

^14

See discussion under the heading "Non-IFRS Financial Measures".

 Revenue

(in millions of dollars)	Nine months ended September 30, 2019	Nine months ended September 30, 2018	$ increase / (decrease)	% increase / (decrease)
Capital Formation	$138.1	$153.3	$(15.2)	(10)%
Equities and Fixed Income Trading and Clearing	142.4	143.3	(0.9)	(1)%
Derivatives Trading and Clearing	99.9	94.8	5.1	5%
Global Solutions, Insights and Analytics	223.8	215.5	8.3	4%
Other	(0.1)	2.6	(2.7)	(104)%
	$604.1	$609.5	$(5.4)	(1)%

Revenue was $604.1 million in the nine months ended September 30, 2019, down $5.4 million or 1% compared with $609.5 million in the nine months ended September 30, 2018. 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 revenue.

Operating expenses

(in millions of dollars)	Nine months ended September 30, 2019	Nine months ended September 30, 2018	$ increase / (decrease)	% increase / (decrease)
Compensation and benefits	$160.9	$166.7	$(5.8)	(3)%
Information and trading systems	38.0	37.2	0.8	2%
Selling, general and administration	55.5	81.3	(25.8)	(32)%
Depreciation and amortization	59.2	52.3	6.9	13%
Strategic re-alignment expenses	4.6	—	4.6	n/a
	$318.2	$337.5	$(19.3)	(6)%

Operating expenses in the nine months ended September 30, 2019 were $318.2 million, down $19.3 million or 6%, from $337.5 million in the nine months ended September 30, 2018. The decrease in costs was largely related to 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) in the nine months ended September 30, 2018. There was also a decrease in severance costs of approximately $7.4 million from the nine months ended September 30, 2018 to the nine months ended September 30, 2019.

Strategic re-alignment expenses

	Nine months ended September 30, 2019		Nine months ended September 30, 2018
(in millions of dollars)	Pre-tax Amount	Basic and Diluted Earnings per Share Impact	Pre-tax Amount	Basic and Diluted Earnings per Share Impact
	$4.6	$0.06	$—	$—

• Strategic re-alignment expenses for the nine months ended September 30, 2019 included $3.3 million related to organizational changes we made in our post-trade business, elimination of centralized innovation product development unit, and changes to our enterprise risk approach. There were also non-recurring charges for onerous contracts related to our initiative on modernizing our clearing platforms of $1.3 million (See INITIATIVES AND ACCOMPLISHMENTS - Strategic re-alignment).

Additional Information

Other income

(in millions of dollars)	Nine months ended September 30, 2019	Nine months ended September 30, 2018	$ (decrease)	% (decrease)
	$2.3	$26.8	$(24.5)	(91)%

• In the nine months ended September 30, 2018, we completed the sale of our entire 24.2% interest in TMX FTSE. The proceeds of $70.4 million resulted in a gain on sale of approximately $26.8 million before and after income taxes (48 cents per basic and diluted share).
  
  
• In the nine months ended September 30, 2019, we completed the sale of our interest in Bermuda Stock Exchange resulting in a gain on sale of approximately $2.3 million before tax ($2.0 million after income tax, or 4 cents per basic and diluted share).

Income tax expense and effective tax rate             

Income Tax Expense (in millions of dollars)		Effective Tax Rate (%)
Nine months ended September 30, 2019	Nine months ended September 30, 2018	Nine months ended September 30, 2019	Nine months ended September 30, 2018
$64.1	$54.8	24%	20%

Excluding adjustments, primarily related to the items noted below, the effective tax rate would have been approximately 26% for both the nine months ended September 30, 2019, and for the nine months ended September 30, 2018.

2019

• In the nine months ended September 30, 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.

2018

• In the nine months ended September 30, 2018, we realized a capital loss on the windup of a limited partnership, resulting in a tax benefit of approximately $11.8 million. A portion of this capital loss was utilized to eliminate the income tax otherwise payable of $3.8 million on the sale of our interest in TMX FTSE. In addition, we carried back the balance of this net capital loss to reduce the income tax of $8.0 million on the sale of NGX in 2017. Also, the non-taxable portion of the capital gain on the sale of our interest in TMX FTSE resulted in a tax benefit of approximately $3.3 million. As a result, there was a decrease in income tax expense, which reduced our effective tax rate for the nine months ended September 30, 2018.

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 Q3/19 unaudited condensed consolidated interim financial statements and related Management's Discussion and Analysis (MD&A) and recommended they be approved by the Board. Following review by the full Board, the Q3/19 unaudited condensed consolidated interim financial statements, MD&A and the contents of this press release were approved.

CONSOLIDATED FINANCIAL STATEMENTS

Our Q3/19 unaudited condensed consolidated interim 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 Q3/19 unaudited condensed consolidated interim 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 [phone] 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 in this press release 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 anticipated cost savings resulting from this initiative and the timing of the modernization and the anticipated savings; other statements related to cost reductions; the impact of the decrease of market capitalization of TSX and TSXV issuers overall (from 2017 to 2018) net of changes to sustaining fees on TMX Group's revenue; anticipated increases to strategic re-alignment costs as a result of organizational changes, expected cost savings resulting from this initiative, and the timing thereof; 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 British pound sterling), 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 2018 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 Q3/19.

Time: 8:00 a.m. - 9:00 a.m. ET on Friday, November 8, 2019.

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 1894882.

SOURCE TMX Group Limited

Catherine Kee, Senior Manager, Corporate Communications, TMX Group, 416-814-8834, [email protected]; Julie Park, Manager, Investor Relations, TMX Group, 416-365-3892, [email protected]

Related Links

www.tmx.com