TMX Group Inc. Reports Results for Fourth Quarter and Year End 2008




    
    -   Revenue of $151.4 million for Q4/08, up 36% over Q4/07
    -   Diluted EPS of 65 cents for Q4/08, up 44% over Q4/07
    -   Diluted EPS in Q4/08 of 65 cents unchanged from Q4/07 EPS prior to a
        reduction in the value of the future tax asset(*)
    -   Cash flows from operating activities in Q4/08 of $60.8 million, up
        14% versus Q4/07
    -   Full year 2008 diluted EPS of $2.47 compared with $2.17 for 2007
    -   Full year 2008 cash flows from operating activities of
        $244.2 million, an increase of 10% from 2007
    

    TORONTO, Jan. 28 /CNW/ - TMX Group Inc. (formerly TSX Group Inc.) (TSX:X)
announced results for the fourth quarter and year ended December 31, 2008.
    Thomas Kloet, Chief Executive Officer of TMX Group said, "We are pleased
to report good results for both the fourth quarter and full year 2008 despite
difficult market conditions. We are proud of our many accomplishments in 2008,
including our progress in integrating the Montréal Exchange with TMX Group and
NGX's continued success with the execution of its growth strategy."
    Michael Ptasznik, Chief Financial Officer of TMX Group said, "The
benefits of continued diversification are evident in these solid financial
results. In addition to the positive contribution from trading on TSX, MX and
BOX this quarter, we experienced revenue growth in both our energy segment and
our market data operations while continuing to maintain cost controls and
realize efficiencies."

    Summary of Financial Information

    Net income for Q4/08 increased over Q4/07 primarily due to the increased
revenue related to the inclusion of revenue from MX and BOX, as well as
increased issuer services, cash equity trading, energy trading and market data
revenue. This increase in revenue was somewhat offset by higher operating
expenses, interest expense and a $13.3 million pre-tax mark to market
adjustment (12 cents per common share after tax, on both a basic and diluted
basis) on our interest rate swaps. The latter expense represents a non-cash
item.

    
    ---------------------------
    (*) See discussion under the heading Non-GAAP Financial Measures.

    (in millions of dollars, except per share amounts)

                                   Q4/08       Q4/07  $ Increase  % Increase

    Revenue                      $ 151.4     $ 111.2     $  40.2         36%
    Operating expenses           $  65.9     $  47.2     $  18.7         40%
    Net income                   $  49.0     $  30.4     $  18.6         61%
    Earnings per share:
      Basic                      $  0.65     $  0.46     $  0.19         41%
      Diluted                    $  0.65     $  0.45     $  0.20         44%
    Cash flows from
     operating activities        $  60.8     $  53.2     $   7.6         14%
    

    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, or 20 cents per common
share (on both a basic and diluted basis).
    The following is a reconciliation of earnings per share to earnings per
share prior to a reduction in the value of the future tax asset(*):

    
    Reconciliation for Q4/08 and Q4/07

                                        Q4/08                   Q4/07
                                   Basic     Diluted       Basic     Diluted

    Earnings per share           $  0.65     $  0.65     $  0.46     $  0.45
    Adjustment related to
     reduction of the future
     tax asset                         -           -     $  0.20     $  0.20
                                 -------     -------     -------     -------
    Earnings per share prior
     to a reduction in the
     value of the future
     tax asset(*)                $  0.65     $  0.65     $  0.66     $  0.65
                                 -------     -------     -------     -------


    ---------------------------
    (*) See discussion under the heading Non-GAAP Financial Measures.

    Summary of Financial Information

    (in millions of dollars, except per share amounts)

                                    2008        2007  $ Increase  % Increase

    Revenue                      $ 533.2     $ 424.6     $ 108.6         26%
    Operating expenses           $ 227.8     $ 181.5     $  46.3         26%
    Net income                   $ 182.0     $ 148.7     $  33.3         22%
    Earnings per share:
      Basic                      $  2.48     $  2.19     $  0.29         13%
      Diluted                    $  2.47     $  2.17     $  0.30         14%
    Cash flows from
     operating activities        $ 244.2     $ 221.7     $  22.5         10%
    

    Net income for 2008 was reduced due to a payment of $15.2 million to ISE
Ventures, LLC (ISE Ventures), a wholly-owned subsidiary of International
Securities Exchange Holdings, Inc. (ISE), related to terminating our
derivatives joint venture.
    In 2007, the future tax asset was reduced, and income tax expense
increased by $15.1 million, primarily as a result of decreases in federal
corporate income tax rates which were enacted in June and December 2007. The
adjustment resulted in a reduction in net income for 2007 of $15.1 million, or
22 cents per common share (on both a basic and diluted basis). The following
is a reconciliation of earnings per share to earnings per share prior to a
reduction in the value of the future tax asset in 2007 and prior to loss on
termination of joint venture in 2008(*):

    
    Reconciliation for 2008 and 2007

                                        2008                    2007
                                   Basic     Diluted       Basic     Diluted

    Earnings per share           $  2.48     $  2.47     $  2.19     $  2.17
    Adjustment related to
     loss on termination of
     joint venture               $  0.21     $  0.21
    Adjustment related to
     reduction of the
     future tax asset                  -           -     $  0.22     $  0.22
                                 -------     -------     -------     -------
    Earnings per share prior
     to a reduction in the
     value of the future tax
     asset in 2007 and prior
     to loss on termination
     of joint venture
     in 2008(*)                  $  2.69     $  2.68     $  2.41     $  2.39
                                 -------     -------     -------     -------

    ---------------------------
    (*) See discussion under the heading Non-GAAP Financial Measures.

    Select Segmented Financial Information

    (in millions of dollars)

                 Cash Markets
               - Equities and     Derivatives Markets  Energy Markets
    Q4/08        Fixed Income        - MX and BOX         - NGX        Total

    Revenue           $ 116.7            $  26.2           $   8.5   $ 151.4
    Net Income        $  38.8            $   7.4           $   2.8   $  49.0

    Q4/07
    Revenue           $ 104.9                  -           $   6.3   $ 111.2
    Net Income        $  28.9                  -           $   1.5   $  30.4


                 Cash Markets
               - Equities and     Derivatives Markets  Energy Markets
    2008         Fixed Income        - MX and BOX         - NGX        Total

    Revenue           $ 439.6            $  63.4           $  30.2   $ 533.2
    Net Income        $ 155.7            $  18.1           $   8.2   $ 182.0

    2007
    Revenue           $ 402.6                  -           $  22.0   $ 424.6
    Net Income        $ 144.4                  -           $   4.3   $ 148.7
    

    On May 1, 2008, TMX Group and Montréal Exchange Inc. (MX) combined their
businesses and, accordingly, the results of MX are included in TMX Group's
consolidated results from May 1, 2008. On August 29, 2008, MX acquired an
additional 21.9% interest in the Boston Options Exchange Group, LLC (BOX) from
the Boston Stock Exchange (BSE), giving MX a majority ownership interest of
53.3% in, and control of, the U.S. equity option exchange. Prior to the
completion of this transaction, MX's 31.4% investment in BOX was accounted for
under the equity method under which our 31.4% of the earnings from BOX was
reported as income from investment in an affiliate. Upon acquisition of
control, the results of BOX have been fully consolidated into TMX Group's
consolidated results from August 29, 2008, with an adjustment made for the
non- controlling interests. In October 2008, as a result of a buy-back of
units by BOX, MX's ownership increased to 53.8%.
    Certain comparative figures have been reclassified in order to conform
with the financial presentation adopted in the current year.

    
    Quarter Ended December 31, 2008 Compared with Quarter Ended December 31,
    2007

    Revenue
    

    Revenue in Q4/08 was $151.4 million, up $40.2 million, or 36% as compared
with $111.2 million in Q4/07 primarily reflecting $26.2 million in revenue
related to the business operations of MX which were combined with TMX Group on
May 1, 2008 and revenue related to the operations of BOX from August 29, 2008,
as well as increased issuer services, cash equity trading, energy trading and
market data revenue.

    Issuer Services Revenue

    The following is a summary of issuer services revenue reported and issuer
services fees billed(*) (reconciled below in this section) in Q4/08 and Q4/07.

    
    (in millions of dollars)

                                       Reported
                                                               $           %
                                                        increase/   increase/
                                   Q4/08       Q4/07   (decrease)  (decrease)

    Initial listing fees         $   4.1     $   3.7     $   0.4         11%
    Additional listing fees      $  13.4     $  11.8     $   1.6         14%
    Sustaining listing
     fees(xx)                    $  17.6     $  17.4     $   0.2          1%
    Other issuer services        $   3.6     $   3.8    ($   0.2)        (5%)
                                 -------     -------     -------
    Total                        $  38.7     $  36.7     $   2.0          5%
                                 -------     -------     -------


                                       Billed(*)
                                                               $           %
                                                        increase/   increase/
                                   Q4/08       Q4/07   (decrease)  (decrease)

    Initial listing fees         $   3.2     $  10.0    ($   6.8)       (68%)
    Additional listing fees      $  15.7     $  22.4    ($   6.7)       (30%)
    Sustaining listing
     fees(xx)                    $  17.6     $  17.4     $   0.2          1%
    Other issuer services        $   3.6     $   3.8    ($   0.2)        (5%)
                                 -------     -------     -------
    Total                        $  40.1     $  53.6    ($  13.5)       (25%)
                                 -------     -------     -------

    

    Initial and additional listing fees are non-refundable fees paid by
listed issuers for the listing or reserving of securities. These fees are
recorded as "deferred revenue - initial and additional listing fees" and
recognized on a straight-line basis over an estimated service period of ten
years.
    In the case of Toronto Stock Exchange, listed issuers are billed for
initial and additional listing fees, and with this system, there is a lag
between the time when securities are issued or reserved and the time when
these listing fees are paid by Toronto Stock Exchange listed issuers. For TSX
Venture Exchange issuers, fees are paid either prior to or at the time of
listing or reserving securities. The following is a reconciliation of initial
and additional listing fees billed(*) to initial and additional listing fees
reported:

    
    Initial Listing Fees (in millions of dollars)          Q4/08       Q4/07

    Initial listing fees billed(*)                       $   3.2     $  10.0
    Initial listing fees billed(*) and deferred
     to future periods                                  ($   3.1)   ($   9.8)
    Recognition of initial listing fees billed(*) and
     previously included in deferred revenue             $   4.0     $   3.5
                                                        ---------   ---------
    Initial listing fee revenue reported                 $   4.1     $   3.7
                                                        ---------   ---------

    Additional Listing Fees (in millions of dollars)       Q4/08       Q4/07

    Additional listing fees billed(*)                    $  15.7     $  22.4
    Additional listing fees billed(*) and deferred
     to future periods                                  ($  15.5)   ($  22.0)
    Recognition of additional listing fees billed(*) and
     previously included in deferred revenue             $  13.2     $  11.4
                                                        ---------   ---------
    Additional listing fee revenue reported              $  13.4     $  11.8
                                                        ---------   ---------

        -  Initial and additional listing fees reported increased due to
           capital market activity and listing fee price increases during the
           period from January 1, 1999 to December 31, 2008 compared with the
           period from January 1, 1998 to December 31, 2007. Initial and
           additional listing fees billed(*) in Q4/08, as compared with
           Q4/07, reflect deteriorating market conditions during 2008 that
           resulted in a decline in financing activity. This was somewhat
           offset by the impact of changes to the pricing model for each
           equity exchange that were effective January 1, 2008.

        -  Issuers listed on Toronto Stock Exchange and TSX Venture Exchange
           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. The increase in sustaining listing
           fees was due to fee increases on TSX Venture Exchange that were
           effective January 1, 2008, and the overall higher market
           capitalization of listed issuers at the end of 2007 compared with
           the end of 2006, partially offset by a decrease in sustaining
           listing fees from issuers listed on Toronto Stock Exchange.

        -  Other issuer services includes revenue of $3.3 million from The
           Equicom Group Inc. (Equicom) in Q4/08, compared with $3.6 million
           in Q4/07.

    ---------------------------
    (*)  See discussion under the heading Non-GAAP Financial Measures.
    (xx) Sustaining listing fees billed, as shown in this table, represents
         the amount recognized for accounting purposes during the quarter.
         Sustaining listing fees are billed during the first quarter of the
         year, recorded as deferred revenue and amortized over the year on a
         straight-line basis.

    Trading, Clearing and Related Revenue

    (in millions of dollars)
                                                      $ increase/ % increase/
                                   Q4/08       Q4/07   (decrease)  (decrease)

    Cash markets:
    - Toronto Stock Exchange     $  30.8     $  24.5     $   6.3         26%
    - TSX Venture Exchange       $   6.0     $   9.2    ($   3.2)       (35%)
                                 -------     -------     -------
                                 $  36.8     $  33.7     $   3.1          9%
    - Shorcan                    $   2.7     $   2.9    ($   0.2)        (7%)
                                 -------     -------     -------
    Cash markets revenue         $  39.5     $  36.6     $   2.9          8%
    Derivatives markets revenue  $  21.3           -     $  21.3           -
    Energy markets revenue       $   8.3     $   6.1     $   2.2         36%
                                 -------     -------     -------
    Total                        $  69.1     $  42.7     $  26.4         62%
                                 -------     -------     -------

    Cash Markets

        -  Cash markets equity trading revenue from Toronto Stock Exchange
           increased due to a 34% increase in the volume of securities traded
           in Q4/08 over Q4/07 (33.0 billion securities in Q4/08 versus
           24.7 billion securities in Q4/07), partially offset by the impact
           of changes in our pricing model, which were effective November 1,
           2007, rebates to Electronic Liquidity Providers as well as changes
           in trading activity, patterns and product mix.

        -  Cash markets equity trading revenue from TSX Venture Exchange
           decreased as a result of a 29% decrease in the volume of
           securities traded in Q4/08 over Q4/07 (10.7 billion securities in
           Q4/08 versus 15.1 billion securities in Q4/07), as well as changes
           in trading activity, patterns and product mix somewhat offset by
           the impact of changes in our pricing model, which were effective
           November 1, 2007.

        -  The decrease in revenue from Shorcan Brokers Limited (Shorcan)
           primarily reflects a decrease in trading in Government of Canada
           and provincial and corporate bonds in Q4/08 versus Q4/07 as well
           as the increase in electronic trading volumes (which generates
           less commission per volume traded than traditional voice) as a
           percentage of overall trading volumes.

    Derivatives Markets

        -  Derivatives markets revenue includes $18.6 million in trading
           revenue from MX (which was combined with TMX Group on May 1, 2008)
           and BOX (following MX's acquisition of control on August 29, 2008;
           MX has a 53.8% ownership interest). In addition, we received
           $2.8 million in clearing revenue related to MX.

        -  MX volumes decreased by 14% (8.3 million contracts traded in Q4/08
           versus 9.6 million contracts traded in Q4/07).

        -  BOX volumes increased by 12% (44.5 million contracts traded in
           Q4/08 versus 39.6 million contracts traded in Q4/07).

    Energy Markets

        -  In Q4/08, the volumes of natural gas and electricity contracts
           traded or cleared on NGX increased by 10% over Q4/07 (3.4 million
           terajoules in Q4/08 versus 3.1 million terajoules in Q4/07). This
           excludes the Alberta Watt Exchange Limited (Watt-Ex) volumes,
           which represent electric operating reserve procurement for the
           Alberta Electric System Operator.

        -  The increased volumes are a result of additional products and more
           customers. Under an arrangement with ICE, NGX launched Canadian
           products in February 2008 and U.S. products in March 2008, which
           provided a wider distribution to more customers.

        -  The increase in revenue also reflects price increases that were
           effective in January 2008.

    Market Data Revenue

    (in millions of dollars)
                                   Q4/08       Q4/07  $ increase  % increase

                                 $  38.0     $  28.3     $   9.7         34%

        -  Market data revenue increased partly due to a 1% increase in the
           number of professional and equivalent real-time market data
           subscriptions to TSX Datalinx products (over 162,000 at December
           31, 2008 versus over 160,000 at December 31, 2007). This increase
           reflects increased sales to U.S. customers.

        -  Market data revenue also includes $4.1 million in market data
           revenue related to MX, acquired on May 1, 2008 and BOX, following
           MX's acquisition of control on August 29, 2008. There were over
           28,000 MX market data subscriptions at December 31, 2008 and at
           December 31, 2007.

        -  The increase was also attributable to higher revenues from: direct
           and consolidated data feeds, index licenses, PC-Bond usage, co-
           location services, and historical products. In addition there were
           fee changes that were effective January 1, 2008.

        -  The increase was also due to the impact of the depreciation of the
           Canadian dollar against the U.S. dollar in Q4/08 compared with
           Q4/07.

    Business Services and Other Revenue

    (in millions of dollars)

                                   Q4/08       Q4/07  $ increase  % increase

                                 $   5.7     $   3.4     $   2.3         68%

        -  Business services revenue includes $0.8 million in revenue related
           to the business operations of MX, acquired on May 1, 2008.

        -  The increase was also due to foreign exchange gains on U.S. dollar
           receivables.

    Operating Expenses
    

    Operating expenses in Q4/08 were $65.9 million, an increase of $18.7
million, or 40%, as compared with $47.2 million in Q4/07. The increase was
primarily due to the inclusion of $17.9 million of expenses related to the
business operations of MX, following the combination with TMX Group on May 1,
2008 and the operations of BOX from August 29, 2008, partially offset by lower
expenses associated with the short-term and long-term incentive plans and
lower organizational transition costs. While we estimate that cost synergies
related to the integration with MX of approximately $1.0 million per month
were realized on a run rate basis in Q4/08, we also continued to invest in new
initiatives.

    
    Compensation and Benefits

    (in millions of dollars)
                                   Q4/08       Q4/07  $ increase  % increase

                                 $  29.1     $  24.7     $   4.4         18%

        -  Compensation and benefits costs increased primarily due to the
           inclusion of $6.2 million in costs related to the business
           operations of MX and BOX.

        -  We capitalized $0.5 million of internal development costs related
           to the TSX Quantum trading engine and gateway and $1.9 million
           related to SOLA in Q4/08 compared with $2.5 million related to the
           TSX Quantum trading engine in Q4/07.

        -  The increase was partially offset by lower expenses associated
           with the short-term and long-term incentive plans as well as lower
           organizational transition costs.

        -  There were 845 employees at December 31, 2008, which included 221
           MX employees and 23 BOX employees, versus 603 at
           December 31, 2007.

    Information and Trading Systems

    (in millions of dollars)

                                   Q4/08       Q4/07  $ increase  % increase

                                 $  11.2     $   6.6     $   4.6         70%

        -  Information and trading systems costs included $2.1 million in
           costs related to the business operations of MX and BOX.

        -  Information and trading systems costs also increased due to
           ongoing expenses primarily related to NGX's initiative with ICE,
           as well as costs associated with the TSX Quantum gateway, smart
           order router and consolidated data feed.

    General and Administration

    (in millions of dollars)

                                   Q4/08       Q4/07  $ increase  % increase

                                 $  17.5     $  11.7     $   5.8         50%

        -  General and administration costs included $5.4 million in costs
           related to the business operations of MX and BOX.

        -  General and administration costs also increased due to higher
           occupancy costs.

    Amortization

    (in millions of dollars)

                                   Q4/08       Q4/07  $ increase  % increase

                                 $   8.1     $   4.2     $   3.9         93%

        -  Amortization costs included $4.2 million in costs related to MX
           and BOX.

    Income from Investments in Affiliates

    (in millions of dollars)

                                               Q4/08       Q4/07  $ increase

                                             $   0.4     $   0.2     $   0.2

        -  Income from investments in affiliates represents $0.4 million from
           our 47% share of the income from CanDeal.ca Inc. (CanDeal),
           compared with $0.2 million in Q4/07. CanDeal is an electronic
           trading system for the institutional debt market.

    Investment Income

    (in millions of dollars)

                                   Q4/08       Q4/07  $ increase  % increase

                                 $   4.1     $   4.0     $   0.1          3%

        -  Investment income includes $2.6 million of investment income
           earned by MX in Q4/08.

        -  This was largely offset by lower investment income due to a
           decrease in cash available for investment and lower returns on
           investments during Q4/08 versus Q4/07.

    Interest Expense

    (in millions of dollars)

                                   Q4/08       Q4/07  $ increase  % increase

                                 $   3.5     $   0.0     $   3.5          -

        -  Interest expense increased as a result of financing a portion of
           the purchase price related to the business combination with MX.
           On April 30, 2008, we drew down $430.0 million in Canadian funds
           on a three-year term facility related to financing the cash
           consideration of the purchase price for MX (see Long-term Debt).

    Mark to market on interest rate swaps

    (in millions of dollars)

                                   Q4/08       Q4/07  $ increase  % increase

                                 $  13.3           -     $  13.3          -
    

    We entered into a series of interest rate swap agreements to partially
manage our exposure to interest rate fluctuations on the non-revolving three
year term facility, effective August 28, 2008 (see Long-term Debt). The
instruments are intended to partially hedge the interest rate risk that is
present within the non-revolving term loan that was put in place in connection
with the combination with MX and drawn down on April 30, 2008.
    During Q3/08, we designated these interest rate swaps as cash flow
hedges, in accordance with Section 3865 of the CICA Handbook. We determined
that the hedges were effective and paid and recognized interest expense of
$0.2 million, representing the net amount owing on the interest rate swaps. In
addition, we recognized an unrealized fair value loss on the swaps of $3.4
million ($2.3 million net of tax) in Other comprehensive income.
    While the hedges continued to be effective from an economic perspective,
we determined that it was no longer appropriate to designate the interest rate
swaps as cash flow hedges for accounting purposes in Q4/08. As a result, the
unrealized fair value loss on the swaps of $3.4 million ($2.3 million net of
tax) recognized as Other comprehensive income in Q3/08 was recorded as an
unrealized loss of $3.4 million in the income statement in Q4/08, as mark to
market on interest rate swaps. An additional unrealized loss of $9.1 million
related to mark to market on interest rate swaps was also recorded in Q4/08.
Realized losses recognized in Q4/08 were $0.8 million, of which $0.2 million
was previously recognized as interest in Q3/08.

    
    Income Taxes

    (in millions of dollars)

                                                       Effective tax rate (%)

                                   Q4/08       Q4/07       Q4/08       Q4/07

                                 $  22.9     $  37.8         31%         55%

        -  The effective tax rate of 31% in Q4/08 was lower than the
           effective tax rate of 55% in Q4/07 primarily due to a lower
           federal tax rate and lower adjustments to the value of the future
           income tax asset.

        -  The higher effective tax rate in Q4/07 related primarily to an
           increase of $13.3 million in income tax expense due to a reduction
           in the value of the future tax asset. In December 2007, the
           federal government enacted legislation to reduce corporate income
           tax rates for 2008 to 2012.
    

    Year Ended December 31, 2008 Compared with Year Ended December 31, 2007

    Revenue

    Revenue was $533.2 million for 2008, up $108.6 million, or 26% compared
with $424.6 million for 2007, reflecting $63.4 million in revenue related to
the business operations of MX which were combined with TMX Group on May 1,
2008, revenue from the operations of BOX from August 29, 2008 and increased
issuer services and market data revenue. In addition, revenue in 2008 included
$14.5 million from Equicom, acquired June 1, 2007, compared with $7.7 million
in 2007.

    
    Issuer Services Revenue

    The following is a summary of issuer services revenue reported based on
initial and additional listing fee revenue reported and issuer services
revenue based on initial and additional listing fees billed(*) (reconciled below
in this section) in 2008 and 2007.

    (in millions of dollars)

                  Reported                        Billed(*)
                                                               $ in-   % in-
                                                              crease/ crease/
                               $ in-   % in-                    (de-    (de-
                2008    2007   crease  crease   2008    2007  crease) crease)

    Initial
     listing
     fees     $ 16.0  $ 13.8  $  2.2     16%  $ 18.6  $ 32.3 ($ 13.7)   (42%)
    Additional
     listing
     fees     $ 51.3  $ 44.0  $  7.3     17%  $ 76.9  $104.1 ($ 27.2)   (26%)
    Sustaining
     listing
     fees(xx) $ 69.6  $ 68.0  $  1.6      2%  $ 69.6  $ 68.0  $  1.6      2%
    Other
     issuer
     services $ 15.9  $  8.1  $  7.8     96%  $ 15.9  $  8.1  $  7.8     96%
              ------  ------  ------          ------  ------  ------

    Total     $152.8  $133.9  $ 18.9     14%  $181.0  $212.5 ($ 31.5)   (15%)
              ------  ------  ------          ------  ------  ------
    

    Initial and additional listing fees are non-refundable fees paid by
listed issuers for the listing or reserving of securities. These fees are
recorded as "deferred revenue - initial and additional listing fees" and
recognized on a straight-line basis over an estimated service period of ten
years.
    In the case of Toronto Stock Exchange, listed issuers are billed for
initial and additional listing fees, and with this system, there is a lag
between the time when securities are issued or reserved and the time when
these listing fees are paid by Toronto Stock Exchange listed issuers. For TSX
Venture Exchange issuers, fees are paid either prior to, or at the time of,
listing or reserving securities. The following is a reconciliation of initial
and additional listing fees billed(*) to initial and additional listing fees
reported:

    
    --------------------------
    (*)    See discussion under the heading Non-GAAP Financial Measures.

    (xx)   Sustaining listing fees billed, as shown in this table, represents
           the amount recognized for accounting purposes during the period.
           Sustaining listing fees are billed during the first quarter of the
           year, recorded as deferred revenue and amortized over the year on
           a straight-line basis.


    Initial Listing Fees (in millions of dollars)           2008        2007

    Initial listing fees billed(*)                       $  18.6     $  32.3
    Initial listing fees billed(*) and deferred to
     future periods                                     ($  17.4)   ($  30.7)
    Recognition of initial listing fees billed(*) and
     previously included in deferred revenue             $  14.8     $  12.2
                                                        ---------   ---------
    Initial listing fee revenue reported                 $  16.0     $  13.8
                                                        ---------   ---------


    Additional Listing Fees (in millions of dollars)        2008        2007

    Additional listing fees billed(*)                    $  76.9     $ 104.1
    Additional listing fees billed(*) and deferred to
     future periods                                     ($  72.6)   ($  98.3)
    Recognition of additional listing fees billed(*)
     and previously included in deferred revenue         $  47.0     $  38.2
                                                        ---------   ---------
    Additional listing fee revenue reported              $  51.3     $  44.0
                                                        ---------   ---------

        -  Initial and additional listing fees reported increased due to
           capital market activity and listing fee price increases during the
           period from April 1, 1998 to December 31, 2008 compared with the
           period from April 1, 1997 to December 31, 2007. Initial and
           additional listing fees billed(*) in 2008, as compared with 2007,
           reflect deteriorating market conditions during 2008 that resulted
           in a decline in the value of securities issued and reserved. This
           was somewhat offset by the impact of changes to the pricing model
           for each equity exchange that were effective January 1, 2008.

        -  Issuers listed on Toronto Stock Exchange and TSX Venture Exchange
           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. The increase in sustaining listing fees
           was due to fee increases on TSX Venture Exchange that were
           effective January 1, 2008, and the overall higher market
           capitalization of listed issuers at the end of 2007 compared with
           the end of 2006, partially offset by a decrease in sustaining
           listing fees from issuers listed on Toronto Stock Exchange.

        -  Other issuer services includes revenue of $14.5 million from
           Equicom, compared with $7.7 million in 2007. Equicom was acquired
           June 1, 2007 and provides investor relations and related corporate
           communications services to public issuers in Canada.

    -------------------------

    (*) See discussion under the heading Non-GAAP Financial Measures.

    Trading, Clearing and Related Revenue

    (in millions of dollars)
                                                           $ in-       % in-
                                                          crease/     crease/
                                                            (de-        (de-
                                    2008        2007      crease)     crease)

    Cash markets:
      - Toronto Stock Exchange   $ 105.2     $ 101.9     $   3.3          3%
      - TSX Venture Exchange     $  28.8     $  32.7    ($   3.9)       (12%)
                                ---------   ---------   ---------
                                 $ 134.0     $ 134.6    ($   0.6)        (1%)
      - Shorcan                  $  11.8     $  13.1    ($   1.3)       (10%)
                                ---------   ---------   ---------
    Cash markets revenue         $ 145.8     $ 147.7    ($   1.9)        (1%)
    Derivatives markets revenue  $  47.3           -     $  47.3           -
    Energy markets revenue       $  29.8     $  21.6     $   8.2         38%
                                ---------   ---------   ---------
    Total                        $ 222.9     $ 169.3     $  53.6         32%
                                ---------   ---------   ---------

    Cash Markets

        -  Cash markets equity trading revenue from Toronto Stock Exchange
           increased as a result of a 14% increase in the volume of
           securities traded on Toronto Stock Exchange in 2008 over 2007
           (109.2 billion securities in 2008 versus 96.1 billion securities
           in 2007).  This was somewhat offset by the impact of changes in
           our pricing model, which were effective November 1, 2007, as well
           as changes in trading activity, patterns and product mix.

        -  Cash markets equity trading revenue from TSX Venture Exchange
           decreased due to a 17% decrease in the volume of securities traded
           in 2008 over 2007 (44.1 billion securities in 2008 versus 53.2
           billion securities in 2007). This was partially offset by the
           impact of changes in our pricing model, which were effective
           November 1, 2007, as well as changes in trading activity, patterns
           and product mix.

        -  The decrease in revenue from Shorcan primarily reflects a decrease
           in trading in Government of Canada and provincial bonds in 2008
           versus 2007.

    Derivatives Markets

        -  Derivatives markets revenue includes $39.0 million in trading
           revenue from MX (which was combined with TMX Group on May 1, 2008)
           and BOX (following MX's acquisition of control on August 29, 2008;
           MX has a 53.8% ownership interest). In addition, we received
           $8.3 million in clearing revenue related to MX.

        -  MX volumes decreased by 11% (24.8 million contracts traded from
           May 1, 2008 - December 31, 2008 versus 27.9 million contracts
           traded from May 1, 2007 - December 31, 2007) reflecting reduced
           trading in both the BAX and CGB contracts, partially offset by an
           increase in equity derivatives trading.

        -  BOX volumes increased by 29% (62.6 million contracts from
           September 1, 2008 - December 31, 2008 versus 48.7 million
           contracts traded from September 1, 2007 - December 31, 2007).

     Energy Markets

        -  In 2008, the volumes of natural gas and electricity contracts
           traded or cleared on NGX increased by 29% over 2007 (14.5 million
           terajoules in 2008 versus 11.2 million terajoules in 2007). This
           excludes the Watt-Ex volumes, which represent electric operating
           reserve procurement for the Alberta Electric System Operator.

        -  The increased transaction volumes are a result of additional
           products and more customers. NGX Canadian products launched in
           February 2008 through the ICE alliance and the U.S. products
           launched in March 2008 through the ICE alliance provided a wider
           distribution to more customers. These launches and the addition of
           40 new products contributed to the volume growth.

        -  The increase in revenue also reflects price increases that were
           effective in January 2008.

        -  In 2008, on a net basis, NGX deferred more revenue than in 2007,
           which somewhat offset the increase in revenue.

    Market Data Revenue

    (in millions of dollars)

                                    2008        2007  $ increase  % increase

                                 $ 135.5     $ 110.2     $  25.3         23%

        -  Market data revenue increased partly due to a 10% increase in the
           average number of professional and equivalent real-time market
           data subscriptions to TSX Datalinx products in 2008 compared with
           2007. There were over 162,000 professional and equivalent real-
           time market data subscriptions at December 31, 2008.

        -  Market data revenue included $9.4 million in revenue related to
           the business operations of MX from May 1, 2008 and BOX, following
           MX's acquisition of control on August 29, 2008. There were over
           28,000 MX market data subscriptions at December 31, 2008 and at
           December 31, 2007.

        -  The increase was also attributable to higher data feed revenues,
           increased equities and fixed income index revenues, the launch of
           co-location services and fee changes that were effective January
           1, 2008.

    Business Services and Other Revenue

    (in millions of dollars)

                                     2008       2007  $ increase  % increase

                                 $  22.0     $  11.2     $  10.8         96%

        -  Business Services revenue includes $6.7 million in revenue related
           to the business operations of MX from May 1, 2008, of which
           $5.0 million was attributable to technology and other related
           services provided to BOX from May 1, 2008 to August 28, 2008,
           prior to BOX becoming a subsidiary of MX. Revenue from BOX from
           August 29, 2008 to December 31, 2008 is eliminated on the
           consolidation of BOX.

        -  The increase was also due to foreign exchange gains on U.S. dollar
           receivables.

    Operating Expenses

    Operating expenses in 2008 were $227.8 million, an increase of $46.3
million, or 26%, as compared with $181.5 million in 2007. The increase was
primarily due to the inclusion of $43.3 million of expenses related to the
business operations of MX, following the combination with TMX Group on May 1,
2008 and the operations of BOX from August 29, 2008. In addition, there were
$11.7 million of expenses related to the business operations of Equicom,
acquired June 1, 2007, in 2008 compared with $6.9 million in 2007. The overall
increase was somewhat offset by lower compensation and benefits costs related
to organizational transition costs and short-term and long-term incentive
plans.

    Compensation and Benefits

    (in millions of dollars)

                                    2008        2007  $ increase  % increase

                                 $ 110.5     $  96.3     $  14.2         15%

        -  Compensation and benefits costs increased primarily due to the
           inclusion of $16.8 million in costs related to MX and BOX. There
           were $5.7 million in costs related to the business operations of
           Equicom (acquired on June 1, 2007) in 2008 compared with
           $3.6 million in 2007.

        -  The increase was partially offset by lower costs associated with
           the short-term and long-term incentive plans and lower
           organizational transition costs.

        -  We capitalized $3.7 million of internal development costs related
           to the TSX Quantum trading engine and gateway and $3.9 million
           related to SOLA in 2008 compared with $5.7 million related to the
           TSX Quantum trading engine in 2007.

        -  There were 845 employees at December 31, 2008, which included 221
           MX employees and 23 BOX employees, versus 603 at December 31,
           2007.

    Information and Trading Systems

    (in millions of dollars)

                                    2008        2007  $ increase  % increase

                                 $  36.4     $  26.5     $   9.9         37%

        -  Information and trading systems costs included $4.7 million in
           costs related to MX and BOX.

        -  Information and trading systems costs also increased due to
           ongoing expenses primarily related to NGX's initiative with ICE as
           well as costs associated with the TSX Quantum trading engine and
           gateway, smart order router and consolidated data feed.

    General and Administration

    (in millions of dollars)

                                    2008        2007  $ increase  % increase

                                 $  55.6     $  43.0     $  12.6         29%

        -  General and administration costs included $12.3 million in costs
           related to MX and BOX. There were also $5.5 million in costs
           associated with the business operations of Equicom (which was
           acquired June 1, 2007) in 2008 compared with $3.1 million in 2007.

        -  General and administration costs also increased as a result of
           paying higher fees to RS and IIROC for regulation services, as
           well as higher occupancy costs.

        -  These increases were somewhat offset by a decrease in fees paid to
           external advisors and reduced initiative spending.

    Amortization

    (in millions of dollars)

                                    2008        2007  $ increase  % increase

                                 $  25.3     $  15.8     $   9.5         60%

        -  Amortization costs increased reflecting amortization of
           $9.5 million related to MX and BOX, and increased amortization
           from intangible assets primarily related to TSX Quantum.

    Income from Investments in Affiliates

    (in millions of dollars)

                                                2008        2007  $ increase

                                             $   1.4     $   0.4     $   1.0

        -  Income from investments in affiliates includes $0.7 million
           representing MX's share of BOX income based on a 31.4% interest in
           BOX from May 1, 2008 to August 29, 2008. BOX volumes increased by
           26% from May 1, 2008 to August 29, 2008, compared with May 1, 2007
           to August 29, 2007 (59.9 million contracts traded from May 1, 2008
           to August 29, 2008 versus 47.6 million contracts traded from
           May 1, 2007 to August 29, 2007).

        -  Income from investments in affiliates also includes $0.7 million,
           representing TSX Inc.'s share of CanDeal income for 2008 based on
           a 47% interest in CanDeal, compared with $0.4 million for 2007.
           CanDeal is an electronic trading system for the institutional debt
           market.

    Investment Income

    (in millions of dollars)

                                    2008        2007  $ increase  % increase

                                 $  14.8     $  14.0     $   0.8          6%

        -  Investment income includes $5.3 million of investment income
           earned by MX since May 1, 2008.

        -  This was largely offset by lower investment income due to a
           decrease in cash available for investment and lower returns on
           investments during 2008 compared with 2007.

    Interest Expense

    (in millions of dollars)

                                    2008        2007  $ increase  % increase

                                 $  10.5     $   0.1     $  10.4           -

        -  Interest expense increased as a result of financing a portion of
           the purchase price of the business combination with MX. On
           April 30, 2008, we drew down $430.0 million in Canadian funds on a
           three-year term facility related to financing the cash
           consideration of the purchase price for MX (see Long-term Debt).

    Mark to market on interest rate swaps

    (in millions of dollars)

                                    2008        2007  $ increase  % increase

                                 $  13.3           -     $  13.3           -
    

    We entered into a series of interest rate swap agreements to partially
manage our exposure to interest rate fluctuations on the non-revolving three
year term facility, effective August 28, 2008 (see Long-term Debt). The
instruments are intended to partially hedge the interest rate risk that is
present within the non-revolving term loan that was put in place in connection
with the combination with MX and drawn down on April 30, 2008.
    During Q3/08, we designated these interest rate swaps as cash flow
hedges, in accordance with Section 3865 of the CICA Handbook. We determined
that the hedges were effective and paid and recognized interest expense of
$0.2 million, representing the net amount owing on the interest rate swaps. In
addition, we recognized an unrealized fair value loss on the swaps of $3.4
million ($2.3 million net of tax) in Other comprehensive income.
    While the hedges continued to be effective from an economic perspective,
we determined that it was no longer appropriate to designate the interest rate
swaps as cash flow hedges for accounting purposes in Q4/08. As a result, the
unrealized fair value loss on the swaps of $3.4 million ($2.3 million net of
tax) recognized as Other comprehensive income in Q3/08 was recorded as an
unrealized loss of $3.4 million in the income statement in Q4/08, as mark to
market on interest rate swaps. An additional unrealized loss of $9.1 million
related to mark to market on interest rate swaps was also recorded in Q4/08.
Realized losses recognized in Q4/08 were $0.8 million, of which $0.2 million
was previously recognized as interest in Q3/08.

    
    Other Acquisition Related Expenses

    (in millions of dollars)

                                                2008        2007  $ increase

                                             $  15.9     $     -     $  15.9

        -  In August 2007, TMX Group and ISE Ventures announced the execution
           of a shareholders' agreement for CDEX Inc. (CDEX), which was
           created to operate DEX, a new Canadian derivatives exchange
           scheduled to begin operations in March 2009. In connection with
           the agreement to combine with MX, we provided ISE Ventures with a
           notice of a competing transaction as required under the terms of
           the CDEX shareholders' agreement, and subsequently paid ISE
           Ventures $15.2 million on April 1, 2008.

        -  When we acquired NGX in 2004, TMX Group entered into an
           arrangement with MX and paid MX $5.0 million. We amortized this
           amount over five years, the remaining term in the 1999 Memorandum
           of Agreement with MX, or $1.0 million per annum. As a result of
           the May 1, 2008 business combination, we have now expensed the
           remaining balance in Other Assets of $0.7 million.

    Income Taxes

    (in millions of dollars)

                                                       Effective tax rate (%)
                                    2008        2007        2008        2007

                                 $  98.1     $ 108.7         35%         42%

        -  The effective tax rate for 2008 was lower than that for 2007
           partially due to a lower federal tax rate.

        -  The effective tax rate in 2008 was higher than our statutory rate
           of 33% primarily due to making a payment of $15.2 million to ISE
           Ventures, which is not being deducted for tax purposes.

        -  The effective tax rate in 2007 was somewhat higher than our
           statutory tax rate of 35% for 2007 partially due to adjustments to
           the value of the future income tax asset.

    Non-controlling Interest(1)

    Upon the acquisition of control of BOX on August 29, 2008, the results of
BOX have been fully consolidated into our consolidated statements of income.
MX now has a 53.8% ownership interest in BOX. The non-controlling interests
represent the other BOX unitholders' share of net income.

    --------------------
    (1) In October 2008, BOX repurchased some of its common shares thereby
        increasing MX's ownership interest from 53.3% to 53.8%.
    

    Comprehensive Income

    As a result of our combination with MX on May 1, 2008, our consolidated
financial statements include Statements of Comprehensive Income not previously
included in our consolidated financial statements and accompanying notes for
the year ended December 31, 2007.
    Comprehensive Income was $206.1 million for 2008 and is comprised of Net
Income of $182.0 million and Other Comprehensive Income of $24.1 million.
    Other comprehensive income includes the unrealized gain on the foreign
currency translation of BOX, a self-sustaining foreign operation, which
amounted to $24.1 million for 2008.
    Our Accumulated Other Comprehensive Income of $24.1 million as at
December 31, 2008 is included as a component of Shareholders' Equity.

    
    Liquidity and Capital Resources

    Cash, Cash Equivalents and Marketable Securities

    (in millions of dollars)

                                            December    December
                                            31, 2008    31, 2007  $(decrease)

                                             $ 198.7     $ 302.8    ($ 104.1)

        -  The decrease was due to four dividend payments of $0.38 per common
           share, or $114.1 million in aggregate, as well as to payments
           totalling $285.4 million relating to the repurchase of 7,523,249
           common shares under our NCIB program in 2008.

        -  In addition, the decrease was due to a payment of $15.2 million to
           ISE Ventures relating to the termination of our previously
           announced derivatives joint venture, additions to intangible
           assets of $8.4 million primarily related to TSX Quantum and SOLA
           internal development costs as well as capital expenditures of
           $5.3 million.

        -  The decrease was partially offset by cash generated from operating
           activities of $244.2 million.

        -  While the combination with MX was financed with long-term debt and
           common shares, we did acquire cash and marketable securities when
           we combined with MX. At December 31, 2008, MX had $99.4 million of
           cash and cash equivalents and marketable securities, after paying
           $58.0 million for the increased investment in BOX on August 29,
           2008.

    Total Assets

    (in millions of dollars)

                                            December    December
                                            31, 2008    31, 2007  $ increase

                                           $ 3,672.1   $ 1,523.9   $ 2,148.2

        -  Total assets primarily increased due to the inclusion of
           $827.2 million of intangible assets and $582.5 million of goodwill
           related to both the combination with MX on May 1, 2008 and the
           acquisition of control of BOX on August 29, 2008.

        -  Total assets also increased due to the inclusion of MX daily
           settlements and cash deposits receivable of $497.3 million as at
           December 31, 2008 related to MX's clearing operations. MX also
           carried offsetting liabilities related to daily settlements and
           cash deposits which were $497.3 million at December 31, 2008.
           Daily settlements due from/to clearing members consist of amounts
           due from/to clearing members as a result of marking open futures
           positions to market and settling option transactions each day that
           are required to be collected from/paid to clearing members prior
           to the commencement of the next trading day.

        -  The overall increase was also due to higher energy contracts
           receivable of $976.4 million at December 31, 2008 related to the
           clearing operations of NGX, compared with $745.4 million at the
           end of 2007. The higher level of receivables reflected higher
           natural gas prices at the end of December 2008 compared with the
           end of December 2007 and higher volumes. As the clearing
           counterparty to every trade, NGX also carries offsetting
           liabilities in the form of energy contracts payable, which were
           $976.4 million at December 31, 2008 compared with $745.4 million
           at the end of 2007.

        -  The overall increase also reflected an increase in current assets
           related to the fair value of open energy contracts ($155.3 million
           as at December 31, 2008, compared with $74.9 million at
           December 31, 2007). The higher level of receivables reflected
           higher natural gas prices at the end of December 2008 compared
           with the end of December 2007 and higher volumes. NGX also carried
           offsetting liabilities related to the fair value of open energy
           contracts which were $155.3 million at December 31, 2008 compared
           with $74.9 million at December 31, 2007.

        -  Partially offsetting these increases in Total assets, cash and
           cash equivalents and marketable securities decreased by
           $104.1 million.

    Credit Facilities and Guarantee

    Long-term Debt

    (in millions of dollars)

                                            December    December
                                            31, 2008    31, 2007  $ increase

                                             $ 428.3           -     $ 428.3

        -  In connection with the combination with MX, we established a
           non-revolving three-year term unsecured credit facility of
           $430.0 million with a syndicate of seven financial institutions.
           In addition, we also established a revolving three-year unsecured
           credit facility of $50.0 million with the same syndicate. TMX
           Group may draw on these facilities in Canadian dollars by way of
           prime rate loans and/or Bankers' Acceptances or in U.S. dollars by
           way of LIBOR loans and/or U.S. base rate loans. Currently, the
           acceptance fee rate for Bankers' Acceptances and margin for LIBOR
           loans is 0.45%. On April 30, 2008, we drew down $430.0 million in
           Canadian funds on the three-year term facility to satisfy the cash
           consideration of the purchase price for MX.

        -  We entered into a series of interest rate swap agreements which
           took effect on August 28, 2008 in order to partially manage our
           exposure to interest rate fluctuations by fixing the interest rate
           relating to $300.0 million of principal as follows:

        ---------------------------------------------------------------------
                                   Interest rate we will
             Notional value           pay under swap         Maturity date
        (in millions of dollars)   (excludes 0.45% fee)         of swap
        ---------------------------------------------------------------------
          Swap No. 1 - $100.0            3.496%             August 31, 2009
          Swap No. 2 - $100.0            3.749%             August 31, 2010
          Swap No. 3 - $100.0            3.829%              April 18, 2011
        ---------------------------------------------------------------------

    These credit facilities contain customary covenants, including a
requirement that TMX Group maintain:

        -  a maximum debt to adjusted EBITDA ratio of 3.5:1, where adjusted
           EBITDA means earnings on a consolidated basis before interest,
           taxes, depreciation and amortization, all determined in accordance
           with GAAP but adjusted to include initial and additional listing
           fees billed and to exclude initial and additional listing fees
           reported as revenue;

        -  a minimum consolidated net worth covenant based on a pre-
           determined formula; and

        -  a debt incurrence test whereby debt to adjusted EBITDA must not
           exceed 3.0:1.

    At December 31, 2008, all covenants were met.
    

    Other Credit Facility and Guarantee

    As part of its clearing operations, NGX becomes the counterparty to each
transaction conducted through its electronic trading platform. To backstop its
clearing operations, NGX currently has a credit agreement in place with a
Canadian chartered bank, which includes a U.S.$100.0 million clearing backstop
fund. We are NGX's unsecured guarantor for this fund up to a maximum of
U.S.$100.0 million.
    NGX requires each contracting party to provide collateral in the form of
cash or letters of credit based on the margins required for its unsettled
contractual obligations, which may be accessed by NGX in the event of a
default by such contracting party.
    The collateral provided in the form of cash (the cash collateral
deposits) is segregated in individually designated bank accounts held by NGX
at a major Canadian chartered bank. The cash collateral deposits, together
with letters of credit provided by the contracting parties, exceed all of the
outstanding credit exposure, as determined by NGX in accordance with its
margining methodology, for all its unsettled contractual obligations at any
point in time.
    CDCC has also arranged a total of $30.0 million in revolving standby
credit facilities with a Canadian Schedule I bank to provide liquidity in the
event of default by a clearing member. Borrowings under the facilities, which
are required to be collateralized, bear interest based on the bank's prime
rate plus 0.75%.
    These facilities have not been drawn upon at December 31, 2008.

    
    Shareholders' Equity

    (in millions of dollars)

                                            December    December
                                            31, 2008    31, 2007  $ increase

                                             $ 794.6     $ 171.9     $ 622.7

        -  Shareholders' equity increased primarily due to an increase in
           share capital of $806.6 million relating to the issuance of
           15.3 million shares upon our combination with MX. We earned
           $182.0 million of net income in 2008. In addition, proceeds of
           $7.0 million were received on the exercise of options in 2008.

        -  The increase in shareholders' equity was partially offset by the
           repurchase of shares in connection with our NCIB announced on
           August 1, 2007. There were no repurchases between December 10,
           2007 (when we announced the MX transaction) and May 1, 2008 (when
           we closed the transaction). From May 2, 2008 to July 22 2008, we
           repurchased 4,441,189 common shares at a cost of $185.2 million
           under our original NCIB. This completed the expired NCIB under
           which we repurchased 6,841,051 shares for cancellation at a
           weighted average price of $42.79, which was the maximum allowable
           under the plan.

        -  We renewed our NCIB and from August 18, 2008 to December 31, 2008,
           we repurchased 3,082,060 common shares at a cost of
           $100.2 million. Under the new NCIB, we may repurchase up to
           7,595,585 of our common shares. All shares purchased by TMX Group
           under the NCIB have been cancelled. We entered into a pre-defined
           plan with our designated broker to allow for the repurchase of
           common shares at times when we would not ordinarily be active in
           the market due to our own internal trading blackout periods,
           insider trading rules or otherwise. These purchases will terminate
           on August 17, 2009 or such earlier date as we complete our
           permitted purchases. We will make our purchases in accordance with
           Toronto Stock Exchange requirements and the price we pay for any
           such common shares will be the market price of such shares at the
           time of acquisition. We may enter into one or more private
           agreements to purchase common shares, provided that we first
           obtain an order from the relevant securities regulatory authority
           to permit such agreements. All purchased common shares will be
           cancelled.

        -  In addition, we paid $114.1 million in dividends during 2008.

        -  In connection with the combination with MX, on May 1, 2008, we
           issued 162,194 share options in exchange for 208,400 MX share
           options.

        -  We have obtained conditional approval from Toronto Stock Exchange
           to issue up to 1.5 million common shares to satisfy a portion of
           the purchase price payable for NetThruPut Inc. (NTP) from Enbridge
           Inc. (Enbridge) and Circuit Technology Ltd. (Circuit Technology).
           We expect to exercise the option and acquire NTP in the first half
           of 2009.

        -  At December 31, 2008, there were 74,403,577 common shares issued
           and outstanding. In 2008, 331,848 common shares were issued on the
           exercise of share options. At December 31, 2008, 4,252,296 common
           shares were reserved for issuance upon the exercise of options
           granted under the share option plan. At December 31, 2008, there
           were 1,021,819 options outstanding.

        -  At January 27, 2009, there were 74,403,577 common shares issued
           and outstanding and 1,021,819 options outstanding under the share
           option plan.

    Cash Flows from Operating Activities
    (in millions of dollars)
                                                                    Increase
                                               Q4/08       Q4/07     in cash

    Cash Flows from Operating Activities     $  60.8     $  53.2     $   7.6


    Cash Flows from Operating Activities were $7.6 million higher in Q4/08
compared with Q4/07 due to:

                                                                    Increase/
    (in millions of dollars)                                       (decrease)
                                               Q4/08       Q4/07     in cash

    Net income                               $  49.0     $  30.4     $  18.6
    Amortization                             $   8.1     $   4.2     $   3.9
    Unrealized (gain)/loss on marketable
     securities                             ($   1.0)    $   0.2    ($   1.2)
    Unrealized loss on interest rate swaps   $  12.5           -     $  12.5
    Decrease in future income tax asset     ($   4.1)    $  10.3    ($  14.4)
    (Increase)/decrease in accounts
     receivable and prepaid expenses        ($   1.2)   ($   2.0)    $   0.8
    (Increase) in other assets              ($   0.1)   ($   2.9)    $   2.8
    Net increase in accounts payable and
     accrued liabilities                     $   8.3     $  12.4    ($   4.1)
    (Decrease) in deferred revenue          ($  17.5)   ($   1.6)   ($  15.9)
    Net increase in income taxes payable     $   4.5     $   1.8     $   2.7
    Net increase/(decrease) in other items   $   2.3     $   0.4     $   1.9
                                            ---------   ---------   ---------
    Cash Flows from Operating Activities     $  60.8     $  53.2     $   7.6
                                            ---------   ---------   ---------


    (in millions of dollars)                                        Increase
                                                2008        2007     in cash

    Cash Flows from Operating Activities     $ 244.2     $ 221.7     $  22.5

    Cash Flows from Operating Activities were $22.5 million higher in 2008
compared with 2007 due to:

                                                                    Increase/
    (in millions of dollars)                                       (decrease)
                                                2008        2007     in cash

    Net income                               $ 182.0     $ 148.7     $  33.3
    Amortization                             $  25.3     $  15.8     $   9.5
    Unrealized (gain)/loss on marketable
     securities                             ($   1.2)    $   3.1    ($   4.3)
    (Increase) in future income tax asset   ($   9.3)   ($   3.1)   ($   6.2)
    Payment to ISE Ventures related to
     termination of joint venture            $  15.2           -     $  15.2
    Unrealized loss on interest rate swaps   $  12.5           -     $  12.5
    (Increase) in accounts receivable and
     prepaid expenses                       ($   1.2)   ($  15.2)    $  14.0
    (Increase)/decrease in other assets      $   4.9    ($   3.1)    $   8.0
    Net (decrease)/increase in accounts
     payable and accrued liabilities        ($  27.3)    $   7.0    ($  34.3)
    Increase in deferred revenue             $  34.6     $  78.0    ($  43.4)
    Net increase/(decrease) in income taxes
     payable                                 $   5.0    ($  11.5)    $  16.5
    Net increase in other items              $   3.7     $   2.0     $   1.7
                                            ---------   ---------   ---------
    Cash Flows from Operating Activities     $ 244.2     $ 221.7     $  22.5
                                            ---------   ---------   ---------

    Cash Flows from (used in) Financing Activities

    (in millions of dollars)                                        Increase
                                               Q4/08       Q4/07     in cash

    Cash Flows from (used in) Financing
     Activities                             ($  58.2)   ($  59.3)    $   1.1

    Cash Flows used in Financing Activities were $1.1 million lower in Q4/08
compared with Q4/07 due to:

                                                                    Increase/
    (in millions of dollars)                                       (decrease)
                                               Q4/08       Q4/07     in cash

    Dividends paid on common shares         ($  28.5)   ($  25.3)   ($   3.2)
    Repurchase of common shares under NCIB  ($  27.8)   ($  33.8)    $   6.0
    Net increase/(decrease) in other items  ($   1.9)   ($   0.2)   ($   1.7)
                                            ---------   ---------   ---------
    Cash Flows from (used in) Financing
     Activities                             ($  58.2)   ($  59.3)    $   1.1
                                            ---------   ---------   ---------

    (in millions of dollars)                                        Increase
                                                2008        2007     in cash

    Cash Flows from (used in) Financing
     Activities                              $  33.1    ($ 207.4)    $ 240.5

    Cash Flows from Financing Activities were $240.5 million higher in 2008
compared with 2007 due to:

                                                                    Increase/
    (in millions of dollars)                                       (decrease)
                                                2008        2007     in cash

    Net proceeds on term loan used to
     finance cash portion of purchase price
     for MX                                  $ 427.8           -     $ 427.8
    Dividends paid on common shares         ($ 114.1)   ($ 103.5)   ($  10.6)
    Repurchase of common shares under NCIB  ($ 285.4)   ($ 107.6)   ($ 177.8)
    Proceeds from exercised options          $   7.0     $   4.4     $   2.6
    Net (decrease) in other items           ($   2.2)   ($   0.7)   ($   1.5)
                                            ---------   ---------   ---------
    Cash Flows from (used in) Financing
     Activities                              $  33.1    ($ 207.4)    $ 240.5
                                            ---------   ---------   ---------

    Cash Flows from (used in) Investing Activities

    (in millions of dollars)                                        Increase
                                               Q4/08       Q4/07     in cash

    Cash Flows from (used in) Investing
     Activities                              $  19.9     $  13.4     $   6.5

    Cash Flows from Investing Activities were $6.5 million higher in Q4/08
compared with Q4/07 due to:

                                                                    Increase/
    (in millions of dollars)                                       (decrease)
                                               Q4/08       Q4/07     in cash

    Acquisitions, net of cash                $   7.9           -     $   7.9
    Capital expenditures primarily related
     to technology investments              ($   0.5)   ($   1.9)    $   1.4
    Additions to intangible assets including
     TSX Quantum and SOLA internal
     development costs                      ($   2.8)   ($   2.2)   ($   0.6)
    Net sale of marketable securities        $  15.3     $  17.5    ($   2.2)
                                            ---------   ---------   ---------
    Cash Flows from (used in) Investing
     Activities                              $  19.9     $  13.4     $   6.5
                                            ---------   ---------   ---------

    (in millions of dollars)                                       (Decrease)
                                                2008        2007     in cash

    Cash Flows from (used in) Investing
     Activities                             ($ 230.7)    $   2.1    ($ 232.8)

    Cash Flows (used in) Investing Activities were $232.8 million higher in
2008 compared with 2007 due to:

                                                                    Increase/
    (in millions of dollars)                                       (decrease)
                                                2008        2007     in cash

    Acquisitions of MX, controlling interest
     in BOX, Shorcan and Equicom, net of
     cash                                   ($ 405.3)   ($   8.2)   ($ 397.1)
    Payment to ISE Ventures related to
     termination of joint venture           ($  15.2)          -    ($  15.2)
    Payments related to option to purchase
     NetThruPut Inc. shares                        -    ($  10.3)    $  10.3
    Capital expenditures primarily related
     to technology investments and leasehold
     improvements                           ($   5.3)   ($   6.5)    $   1.2
    Additions to intangible assets including
     TSX Quantum and SOLA internal
     development costs                      ($   8.4)   ($   6.2)   ($   2.2)
    Net sale of marketable securities        $ 203.5     $  33.3     $ 170.2
                                            ---------   ---------   ---------
    Cash Flows from (used in) Investing
     Activities                             ($ 230.7)    $   2.1    ($ 232.8)
                                            ---------   ---------   ---------
    

    Financial Statements Governance Practice

    The Finance & Audit Committee of the Board of Directors of TMX Group Inc.
reviewed this press release as well as the 2008 audited annual 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 financial statements, MD&A and the contents of this press
release were approved.

    Consolidated Financial Statements

    TMX Group's 2008 audited annual financial statements have been prepared
in accordance with Canadian generally accepted accounting principles (GAAP)
and are reported in Canadian dollars. The financial information in this press
release is in Canadian dollars unless otherwise indicated and is based on
financial statements prepared in accordance with Canadian GAAP, unless
otherwise noted.
    TMX Group expects to file its 2008 audited annual financial statements
and MD&A with Canadian securities regulators today, after which time the
statements and related MD&A may be accessed through www.sedar.com, or on the
TMX Group website at www.tsx.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
shareholder@tsx.com.

    Non-GAAP Financial Measures

    Toronto Stock Exchange customers are billed for initial and additional
listing fees, and with this system, there is a lag between the time when
securities are issued or reserved and the time when these listing fees are
paid by Toronto Stock Exchange listed issuers. For TSX Venture Exchange
issuers, fees are paid either prior to, or at the time of, listing or
reserving securities. In order to reflect these activities, we have adopted
the terms "issuer services fees billed", "initial listing fees billed" and
"additional listing fees billed".
    Certain measures used in this press release, specifically "initial
listing fees billed", "additional listing fees billed" and "issuer services
revenue based on initial and additional listing fees billed" do not have
standardized meanings prescribed by Canadian GAAP and therefore are unlikely
to be comparable to similar measures presented by other issuers. We present
these non-GAAP revenue measures as an indication of how initial and additional
listing activity and the fees billed or received in connection with the
listing or reserving of securities impact the financial performance and cash
flows of our business. Management uses these measures to assess the
effectiveness of our strategy to serve our listed issuers and to manage the
listings portion of our business.
    We present "earnings per share prior to a reduction in the value of the
future tax asset" as an indication of operating performance exclusive of tax
charges, which primarily relate to lower federal corporate income tax rates
and other adjustments. This measure does not have a standardized meaning
prescribed by Canadian GAAP and therefore is unlikely to be comparable to
similar measures presented by other issuers. Management uses this measure to
assess financial performance excluding the reduction of the future tax asset.
    We present "earnings per share prior to a reduction in the value of the
future tax asset in 2007 and prior to loss on termination of joint venture in
2008" as an indication of operating performance exclusive of the adjustment to
the value of the future tax asset (see above) and the payment made on April 1,
2008 to ISE Ventures, LLC (ISE Ventures), a wholly-owned subsidiary of
International Securities Exchange Holdings, Inc. (ISE), related to terminating
our proposed derivatives joint venture. This measure does not have a
standardized meaning prescribed by Canadian GAAP and therefore is unlikely to
be comparable to similar measures presented by other issuers. Management
believes this measure allows it to assess operating performance excluding the
reduction of the future tax asset and the type of payment made to ISE
Ventures.

    Forward-Looking Information

    This press release contains "forward looking information" (as defined in
applicable Canadian securities legislation) that is based on expectations,
estimates and projections 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 involves known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of TMX Group to be materially different from any
future results, performance or achievements expressed or implied by the
forward looking information in this press release.
    Examples of such forward looking information in this press release
include, but are not limited to factors relating to stock, derivatives and
energy exchanges and the business, financial position, operations and
prospects of TMX Group, including the creation (through the combination with
MX) of opportunities to create cost and revenue synergies, which are subject
to significant risks and uncertainties, including competition from other
exchanges or marketplaces, including alternative trading systems and new
technologies, on a national or international basis; dependence on the economy
of Canada; adverse effects on our results by global economic uncertainties;
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; failure to implement our strategies; regulatory constraints;
risks of litigation; dependence on adequate numbers of customers; failure to
develop or gain acceptance of new products; adverse effect of new business
activities; we may not be able to meet cash requirements because of our
holding company structure and restrictions on paying dividends; dependence and
restrictions imposed by licenses and other arrangements; dependence of trading
operations on a small number of clients; new technologies make it easier to
disseminate our information; the risks associated with NGX's and CDCC's
clearing operations; challenges related to international expansion;
restrictions on ownership of TMX Group shares; inability to protect our
intellectual property; we depend on third party suppliers; adverse effect of a
systemic market event on our derivatives business; the risks associated with
the credit of customers; cost structures being largely fixed; the risks
associated with integrating the operations, systems, and personnel of MX
within TMX Group; and dependence on market activity that cannot be controlled;
and the risk that the cost savings, anticipated revenues from new product
development; growth prospects and any other synergies expected to result from
the combination with MX may not be fully realized or may take longer to
materialize than expected. Actual results and developments are likely to
differ, and may differ materially, from those expressed or implied by the
forward looking information contained in this press release.
    Such 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 exchanges; the accuracy, timing and ability to realize the projected
synergies in respect of expected cash flows, cost savings and profitability,
which will be dependent on, but not limited to, such factors as optimizing
technology and data centres, reducing corporate costs and rationalizing
premises (cost synergies are presented in this press release to provide one
strategic rationale to support the benefits of the combination with MX and
these estimated cost synergies should not be relied on for any other purpose);
business and economic conditions generally; exchange rates (including
estimates of the U.S. dollar - Canadian dollar exchange rate), the level of
trading and activity on markets, and particularly the level of trading in TMX
Group's key products; 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 & development activities;
the successful introduction of new derivatives and equity products; tax
benefits/charges; the impact on TMX Group and its customers of various
regulations and initiatives; 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.
    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. See Risks and Uncertainties and risk factors outlined in
materials filed with the securities regulatory authorities in Canada from time
to time, including our 2008 annual MD&A and our most recent annual information
form and the impact upon them of subsequently reported items.

    
    About TMX Group (TSX-X)
    -----------------------
    
    TMX Group's key subsidiaries operate cash and derivative markets for
multiple asset classes including equities, fixed income and energy. Toronto
Stock Exchange, TSX Venture Exchange, Montreal Exchange, Natural Gas Exchange,
Boston Options Exchange (BOX), Shorcan, Equicom and other TMX Group companies
provide trading markets, clearing facilities, data products and other services
to the global financial community. TMX Group is headquartered in Toronto with
offices in Montreal, Calgary and Vancouver. For more information about TMX
Group, visit our website at www.tsx.com.

    Teleconference / Audio Webcast

    TMX Group will host a teleconference / audio webcast to discuss the
financial results for fourth quarter and year end 2008.

    
    Time: 4:00 p.m. - 5:00 p.m. EST on Wednesday, January 28, 2009.

    To teleconference participants:  Please call the following number at least
15 minutes prior to the start of the event.

    Teleconference Number:   416-644-3416 or 1-800-732-9307

    AudioWebcast:            www.tsx.com, under Investor Relations

    Audio Replay:            416-640-1917 and 1-877-289-8525
                             The passcode for the replay is 21294334 followed
                             by the number sign.



    TMX GROUP INC.
    (formerly TSX Group Inc.)
    Consolidated Balance Sheets
    (In thousands of dollars)
    December 31, 2008 and 2007
    (Unaudited)
    -------------------------------------------------------------------------
                                                          2008          2007
    -------------------------------------------------------------------------
    Assets
    Current assets:
      Cash and cash equivalents                    $   102,442   $    53,398
      Marketable securities                             96,251       249,399
      Restricted cash                                    1,454             -
      Accounts receivable                               63,722        48,438
      Energy contracts receivable                      976,431       745,378
      Fair value of open energy contracts              155,331        74,907
      Daily settlements and cash deposits              497,312             -
      Prepaid expenses                                   9,050         6,561
      Future income tax asset                           34,030        22,840
      -----------------------------------------------------------------------
                                                     1,936,023     1,200,921
    Premises and equipment                              27,505        21,324
    Future income tax asset                            132,499       131,613
    Other assets                                        21,105        25,869
    Investments in affiliate                            12,424        11,731
    Intangible assets                                  891,976        66,578
    Goodwill                                           650,554        65,883
    -------------------------------------------------------------------------
    Total Assets                                   $ 3,672,086   $ 1,523,919
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Liabilities and Shareholders' Equity
    Current liabilities:
      Accounts payable and accrued liabilities     $    59,457   $    48,175
      Energy contracts payable                         976,431       745,378
      Fair value of open energy contracts              155,331        74,907
      Daily settlements and cash deposits              497,312             -
      Deferred revenue                                  12,353         6,032
      Deferred revenue - initial and additional
       listing fees                                     69,540        61,820
      Obligation under capital lease                        42           152
      Fair value of interest rate swaps                  1,787             -
      Income taxes payable                              13,522         9,724
      -----------------------------------------------------------------------
                                                     1,785,775       946,188
    Accrued employee benefits payable                   12,916        12,113
    Future income tax liability                        221,101             -
    Obligation under capital lease                          29            71
    Other liabilities                                   17,265        30,331
    Deferred revenue                                       718           452
    Deferred revenue - initial and additional
     listing fees                                      383,315       362,854
    Fair value of interest rate swaps                   10,690             -
    Term loan                                          428,278             -
    -------------------------------------------------------------------------
    Total Liabilities                                2,860,087     1,352,009

    Non-controlling Interests                           17,370             -

    Shareholders' Equity:
      Share capital                                  1,084,399       379,370
      Share option plan                                  5,969         5,060
      Deficit                                         (319,843)     (212,520)
      Accumulated other comprehensive income            24,104             -
      -----------------------------------------------------------------------
    Total Shareholders' Equity                         794,629       171,910
    -------------------------------------------------------------------------
    Total Liabilities and Shareholders' Equity     $ 3,672,086   $ 1,523,919
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    TMX GROUP INC.
    (formerly TSX Group Inc)
    Consolidated Statements of Income
    (In thousands of dollars, except per share amounts)
    (Unaudited)

    -------------------------------------------------------------------------
                              Three months ended         Twelve months ended
                                     December 31,                December 31,
                              2008          2007          2008          2007
    -------------------------------------------------------------------------
    Revenue:
      Issuer services  $    38,663   $    36,700   $   152,793   $   133,939
      Trading, clearing
       and related          69,066        42,729       222,850       169,237
      Market data           38,009        28,325       135,533       110,241
      Business services
       and other             5,657         3,437        22,013        11,170
      -----------------------------------------------------------------------
      Total revenue        151,395       111,191       533,189       424,587

    Expenses:
      Compensation and
       benefits             29,123        24,669       110,486        96,251
      Information and
       trading systems      11,163         6,566        36,354        26,505
      General and
       administration       17,546        11,682        55,638        42,951
      Amortization           8,082         4,248        25,340        15,838
      -----------------------------------------------------------------------
      Total operating
       expenses             65,914        47,165       227,818       181,545
    -------------------------------------------------------------------------

    Income from
     operations             85,481        64,026       305,371       243,042

    Income from
     investments in
     affiliates                424           182         1,426           374
    Investment income        4,123         4,004        14,824        14,036
    Interest expense        (3,453)          (13)      (10,508)          (55)
    Mark to market on
     interest rate swaps   (13,289)            -       (13,289)            -
    Other acquisition
     related expenses            -             -       (15,902)            -
    -------------------------------------------------------------------------

    Income before income
     taxes                  73,286        68,199       281,922       257,397

    Income taxes            22,881        37,760        98,149       108,700

    -------------------------------------------------------------------------
    Net income before
     non-controlling
     interests              50,405        30,439       183,773       148,697

    Non-controlling
     interests               1,370             -         1,821             -
    -------------------------------------------------------------------------
    Net income         $    49,035   $    30,439   $   181,952   $   148,697
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Earnings per
     share:
      Basic            $      0.65   $      0.46   $      2.48   $      2.19
      Diluted          $      0.65   $      0.45   $      2.47   $      2.17

    Share information:
      Weighted average
       number of
       common shares
       outstanding      74,866,873    66,655,090    73,443,944    67,970,365
      Diluted weighted
       average number
       of common shares
       outstanding      74,941,186    67,049,887    73,540,390    68,464,095
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    TMX GROUP INC.
    (formerly TSX Group Inc.)
    Consolidated Statements of Comprehensive Income
    (In thousands of dollars)
    (Unaudited)

    -------------------------------------------------------------------------
                              Three months ended         Twelve months ended
                                     December 31,                December 31,
                              2008          2007          2008          2007
    -------------------------------------------------------------------------
    Net income         $    49,035   $    30,439   $   181,952   $   148,697

    Other comprehen-
     sive income
      Unrealized gain
       on translating
       financial
       statements
       of a self-
       sustaining
       foreign
       operation            19,789             -        24,104             -
      Unrealized fair
       value (loss)
       on the interest
       rate swaps
       previously
       designated as
       cash flow hedges
       (net of tax)          2,277             -             -             -
    -------------------------------------------------------------------------
    Comprehensive
     income            $    71,101   $    30,439   $   206,056   $   148,697
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    TMX GROUP INC.
    (formerly TSX Group Inc.)
    Consolidated Statements of Changes in Shareholders' Equity
    (In thousands of dollars)

    Years ended December 31, 2008 and 2007
    (Unaudited)
    -------------------------------------------------------------------------
                                                          2008          2007
    -------------------------------------------------------------------------

    Common shares:
      Balance, beginning of period                 $   379,370   $   387,501
      Issuance of common shares                        806,573             -
      Proceeds from options exercised                    6,959         4,416
      Cost of exercised options                          1,731         1,165
      Purchased under normal course issuer bid        (110,234)      (13,712)
      -----------------------------------------------------------------------
      Balance, end of period                         1,084,399       379,370

    Share option plan:
      Balance, beginning of period                       5,060         3,942
      Options issued                                       735             -
      Cost of exercised options                         (1,731)       (1,165)
      Cost of share option plan                          1,905         2,283
      -----------------------------------------------------------------------
      Balance, end of period                             5,969         5,060

    Deficit:
      Balance, beginning of period                    (212,520)     (164,488)
      Transitional adjustment                                -           621
      Net income                                       181,952       148,697
      Dividends on common shares                      (114,099)     (103,465)
      Shares purchased under normal course
       issuer bid                                     (175,176)      (93,885)
      -----------------------------------------------------------------------
      Balance, end of period                          (319,843)     (212,520)

    Accumulated other comprehensive income:
      Balance, beginning of period                           -             -
      Unrealized gain on translating financial
       statements of a self-sustaining foreign
       operation                                        24,104             -
      -----------------------------------------------------------------------
      Balance, end of period                            24,104             -

    -------------------------------------------------------------------------
    Shareholders' equity, end of period            $   794,629   $   171,910
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    TMX GROUP INC.
    (formerly TSX Group Inc.)
    Consolidated Statements of Cash Flows
    (In thousands of dollars)
    (Unaudited)
    -------------------------------------------------------------------------
                              Three months ended         Twelve months ended
                                     December 31,                December 31,
                              2008          2007          2008          2007
    -------------------------------------------------------------------------
    Cash flows from
     (used in) operating
     activities:
      Net income       $    49,035   $    30,439   $   181,952   $   148,697
      Adjustments to
       determine net
       cash flows:
        Amortization         8,082         4,248        25,340        15,838
        Unrealized
         (gain) loss
         on marketable
         securities         (1,049)          185        (1,206)        3,142
        (Income) from
         investments
         in affiliates        (424)         (182)       (1,426)         (374)
        Cost of share
         option plan           515           544         1,905         2,283
        Cost of options
         issued on
         acquisition           213             -           568             -
        Payment on
         termination of
         joint venture           -             -        15,152             -
        Amortized
         financing fees        185             -           492             -
        Non-controlling
         interest            1,370             -         1,821             -
        Unrealized loss
         on interest
         rate swaps         12,477             -        12,477             -
        Unrealized
         foreign
         exchange loss         401             -           401             -
        Future income
         tax asset          (4,059)       10,261        (9,307)       (3,060)
        Accounts
         receivable
         and prepaid
         expenses           (1,160)       (2,002)       (1,175)      (15,173)
        Other assets          (122)       (2,929)        4,954        (3,122)
        Accounts
         payable and
         accrued
         liabilities        10,170        10,492       (15,063)        7,878
        Long-term
         accrued and
         other
         liabilities        (1,838)        1,918       (12,263)         (907)
        Deferred revenue   (17,507)       (1,573)       34,566        78,027
        Income taxes
         payable, net        4,470         1,824         5,001       (11,549)
        ---------------------------------------------------------------------
                            60,759        53,225       244,189       221,680
    Cash flows from
     (used in) financing
     activities:
        Restricted cash         24             -           (47)            -
        Reduction in
         obligation under
         capital lease         (10)         (174)         (177)         (786)
        Proceeds from
         exercised
         options                 -            56         6,959         4,416
        Dividends on
         common shares     (28,508)      (25,352)     (114,099)     (103,465)
        Shares purchased
         under normal
         course issuer
         bid               (27,805)      (33,793)     (285,410)     (107,597)
        Dividends paid
         to non-controlling
         interests          (1,946)            -        (1,946)            -
        Proceeds from
         term loan, net          -             -       427,786             -
        ---------------------------------------------------------------------
                           (58,245)      (59,263)       33,066      (207,432)
    Cash flows from
     (used in) investing
     activities:
       Additions to
        premises and
        equipment             (474)       (1,873)       (5,306)       (6,504)
       Additions to
        intangible assets   (2,803)       (2,195)       (8,451)       (6,225)
       Payment on
        termination of
         joint venture           -             -       (15,152)            -
       Marketable
        securities          15,277        17,523       203,546        33,268
       Acquisitions, net
        of cash acquired     7,875             -      (405,283)       (8,142)
       Purchase of
        option to acquire
        NetThruPut Inc.          -             -             -       (10,265)
    -------------------------------------------------------------------------
                            19,875        13,455      (230,646)        2,132
       Unrealized foreign
        exchange gain on
        cash held in
        foreign subsidiary   2,435             -         2,435             -
    -------------------------------------------------------------------------

    Increase (decrease)
     in cash and cash
     equivalents            24,824         7,417        49,044        16,380

    Cash and cash
     equivalents,
     beginning of period    77,618        45,981        53,398        37,018

    -------------------------------------------------------------------------
    Cash and cash
     equivalents,
     end of period     $   102,442   $    53,398   $   102,442   $    53,398
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Supplemental cash
     flow information:
    Interest paid      $     2,994   $       940   $    11,038   $       979
    Interest received  $     2,704   $     3,879   $    12,648   $    16,090
    Income taxes paid  $    25,606   $    27,264   $   107,114   $   124,601
    -------------------------------------------------------------------------



    TMX GROUP INC.

    Market Statistics(*)

    (Unaudited)
    -------------------------------------------------------------------------
                             Three months ended              Year ended
                                 December 31                 December 31
    -------------------------------------------------------------------------
                              2008          2007          2008          2007
    -------------------------------------------------------------------------
    Toronto Stock
     Exchange:
      Volume (millions)   33,037.7      24,726.3     109,239.7      96,109.0
      Value ($ billions)     403.6         439.7       1,853.2       1,697.2
      Transactions
       (000s)             56,726.0      34,143.3     182,901.5     118,578.2
      Issuers Listed         1,570         1,613         1,570         1,613

      New Issuers
       Listed:                  27            52           126           207
        Number of
         Initial Public
         Offerings               7            27            52            99
        Number of graduates
         from TSX
         Venture/NEX             8            15            45            72
      New Equity
       Financing:
       ($ millions)       13,199.5      11,728.6      35,312.0      47,613.9
        Initial Public
         Offering
         Financings
         ($ millions)        258.2       2,627.7       1,929.0       7,321.3
        Secondary
         Offering
         Financings(1)
         ($ millions)     11,005.7       5,911.8      24,523.8      23,157.6
        Supplementary
         Financings
         ($ millions)      1,935.6       3,189.1       8,859.3      17,134.9
      Market Cap of
       Issuers Listed
       ($ billions)        1,279.3       2,095.3       1,279.3       2,095.3
      S&P/TSX Composite
       Index(2) Close      8,987.7      13,833.1       8,987.7      13,833.1


    TSX Venture
     Exchange:(3)
      Volume (millions)   10,740.9      15,138.2      44,052.2      53,147.4
      Value ($ millions)   1,900.8      11,378.7      23,796.1      44,970.4
      Transactions (000s)    904.9       2,235.6       5,912.6       8,675.1
      Issuers Listed         2,443         2,338         2,443         2,338

      New Issuers Listed        28            87           233           273
      New Equity Financing:
       ($ millions)          576.0       2,923.3       5,560.2      11,652.4
        Initial Public
         Offering
         Financings
         ($ millions)          6.8         207.4         225.1         532.7
        Secondary Offering
         Financings(1)
        ($ millions)         569.2       2,715.9       5,335.1      11,119.7
      Market Cap of
       Issuers Listed:
       ($ billions)           17.1          58.5          17.1          58.5
      S&P/TSX Venture
       Composite Index(2)
       Close                 797.0       2,839.7         797.0       2,839.7


    Toronto Stock Exchange
     and TSX Venture Exchange:
      Professional and
       Equivalent
       Real-time Data
       Subscriptions       162,460       160,413       162,460       160,413


    -------------------------------------------------------------------------
                             Three months ended              Year ended
                                 December 31                 December 31
    -------------------------------------------------------------------------
                              2008          2007          2008          2007
    -------------------------------------------------------------------------

    Montreal Exchange:
      Volume (Contracts)
       (000s)              8,302.6       9,604.9      38,064.9      42,742.2
      Open Interest
       (Contracts)
       (000s) as at
       December 31         2,085.9       2,595.6       2,085.9       2,595.6

      Data Subscriptions
       as at December 31    28,461        28,122        28,461        28,122


    Boston Options
     Exchange:
      Volume (Contracts)
      (000s)              44,521.0      39,589.6     178,650.5     129,797.3


    (*) Certain comparative figures have been restated.
    (1) Secondary Offering Financings includes prospectus offerings on both
        a treasury and secondary basis.
    (2) S&P is a trade-mark owned by The McGraw-Hill Companies, Inc. and is
        used under license.
    (3) TSX Venture Exchange market statistics do not include data for debt
        securities. 'New Issuers Listed' and 'S&P/TSX Venture Composite
        Index Close' statistics exclude data for issuers on NEX. All other
        TSX Venture Exchange market statistics include data for issuers on
        NEX, which is a board that was established on August 18, 2003 for
        issuers that have fallen below TSX Venture Exchange's listing
        standards (181 issuers at December 31, 2008 and 162 issuers at
        December 31, 2007).



    SUPPLEMENTARY INFORMATION ON DEFERRED REVENUE - INITIAL AND ADDITIONAL
    LISTING FEES(1)
    As at December 31, 2008
    Unaudited

    (in millions of dolars)
    -------------------------------------------------------------------------

    Future amortization of deferred revenue - initial and additional listing
    fees

    -------------------------------------------------------------------------
                     Q1           Q2           Q3           Q4    Total Year
    -------------------------------------------------------------------------
    2008              -            -            -            -             -
    2009           17.6         17.4         17.3         17.2          69.5
    2010           17.1         16.9         16.8         16.7          67.5
    2011           16.5         16.3         16.2         15.9          64.9
    2012           15.7         15.3         15.0         14.7          60.7
    2013           14.5         14.1         13.7         13.2          55.5
    2014           12.7         12.1         11.7         11.1          47.6
    2015           10.6          9.9          9.3          8.9          38.7
    2016            8.3          7.5          6.7          6.1          28.6
    2017            5.3          4.3          3.4          2.7          15.7
    2018            2.0          1.3          0.6          0.2           4.1

    Total deferred revenue - initial and additional listing fees     $ 452.8

    Note: only includes initial and additional listing fees billed up to
          December 31, 2008 (and is calculated based on an estimated service
          period of ten years)

    (1) Please refer to Forward-Looking Information.
    





For further information:

For further information: Carolyn Quick, Director, Corporate
Communications, TMX Group, Office: (416) 947-4597, E-Mail:
carolyn.quick@tsx.com; Paul Malcolmson, Director, Investor and Government
Relations, TMX Group, Office: (416) 947-4317, E-Mail: paul.malcolmson@tsx.com


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