Mr. Lou Eccleston reports

TMX GROUP LIMITED REPORTS RESULTS FOR THE FOURTH QUARTER 2015

TMX Group Ltd. has released results for the fourth quarter ended Dec. 31, 2015.

Commenting on 2015 and looking ahead, Lou Eccleston, chief executive officer of TMX Group, said: "Two thousand fifteen was both a transformative and challenging year for TMX. We successfully executed a number of significant strategic and operational changes aimed at realigning the organization around priority areas for investment and transforming TMX into a client-focused and competitive technology-driven solutions provider. We also worked to realize efficiencies in our operations. Economic factors, particularly the prolonged slump in commodity values, continued to weigh heavily on the performance of the Canadian economy and on key elements of our market ecosystem. The impact of these challenging conditions on TMX's financial performance, combined with the valuations at the time of the Maple transaction, contributed to non-cash impairment charges related to goodwill and intangible assets in certain operating segments.

"Looking ahead, we have now entered the execution phase of our strategy, and our plans remain on track. We are confident that as our growth initiatives develop and as macroeconomic factors stabilize and recovery begins, TMX will emerge from our evolutionary process an efficient, client-centric organization that is better equipped to compete for Canada around the world and deliver profitable growth to shareholders."

Commenting on operating performance in fourth quarter 2015, Michael Ptasznik, chief financial officer of TMX Group, said: "In the fourth quarter, we continued to be impacted by the downturn in the resource sector. Revenue from our capital formation and efficient markets businesses both declined with the impact being partly offset by increased revenue from market insights. Excluding strategic realignment expenses, our operating costs were up 1 per cent compared to fourth quarter 2014. Once again, the stronger U.S. dollar had a positive impact on our business this past quarter."

Summary of financial information

The information below reflects the financial statements of TMX Group for the three months ended Dec. 31, 2015 (fourth quarter 2015), compared with the three months ended Dec. 31, 2014 (fourth quarter 2014), except as otherwise indicated.

Net income (loss) attributable to TMX Group shareholders

Net loss attributable to TMX Group shareholders for fourth quarter 2015 was $159.0-million, or $2.92 per common share on a basic and diluted basis, compared with net income of $41.1-million, or 76 cents per common share on a basic and diluted basis, for fourth quarter 2014. The net loss in fourth quarter 2015 was driven by non-cash impairment charges related to capital formation (listings), efficient markets (equities trading), derivatives (BOX) and other assets of $215.8-million, of which TMX Group's share was $194.0-million after tax. While operating expenses before realignment expenses were up 1 per cent, TMX Group did incur realignment expenses of $8.2-million in fourth quarter 2015. In addition, there was a 3-per-cent decline in revenue from fourth quarter 2014 to fourth quarter 2015, reflecting lower capital formation, efficient markets and derivatives revenue, partially offset by an increase in market insights revenue.

Adjusted earnings per share

The decrease in adjusted earnings per share to 87 cents in fourth quarter 2015 from 93 cents in fourth quarter 2014 reflects a 3-per-cent decline in revenue from fourth quarter 2014 to fourth quarter 2015, reflecting lower capital formation, efficient markets and derivatives revenue, partially offset by an increase in market insights revenue. In capital formation, the downturn in the resource sector continues to negatively impact financing activity, particularly on the TSX Venture Exchange. Operating expenses before realignment expenses were essentially unchanged from fourth quarter 2014 to fourth quarter 2015. Over all, there was a favourable impact from a weaker Canadian dollar relative to other currencies, including the U.S. dollar, in fourth quarter 2015 versus fourth quarter 2014. The impact on income from operations was approximately $3-million (pretax).

Three months ended Dec. 31, 2015, compared with three months ended Dec. 31, 2014

Revenue

Prior to the implementation of its new plan, TMX Group reported revenue in the following categories:

• Issuer services;
• Trading, clearing, depository and related;
• Information services;
• Technology services and other.

Effective fourth quarter 2015, TMX Group will report revenue in the following categories:

• Market insights;
• Capital formation;
• Derivatives;
• Efficient markets and market solutions;
• Other.

Market insights includes revenue from real-time data, other market data products and data delivery solutions for TMX Group's marketplaces, as well as those operated by third parties. This pillar also includes revenue from risk management technology solutions (Razor Risk).

Capital formation includes revenue from listings on Toronto Stock Exchange and TSX Venture Exchange and other issuer services. Other issuer services include revenue from transfer agent and corporate trust services, as well as revenue from Toronto Stock Exchange private markets.

Derivatives includes revenue from trading and clearing on the Montreal Exchange (MX) and Canadian Derivatives Clearing Corp. (CDCC), as well as revenue from trading and market data on Boston Options Exchange (BOX).

Efficient markets and market solutions include revenue from equities trading (Toronto Stock Exchange, TSX Venture Exchange and Alpha) and fixed-income trading (Shorcan Brokers Ltd.), as well as from the Canadian Depository for Securities (CDS). Efficient markets revenue also includes revenue from energy trading and clearing (NGX and Shorcan Energy Brokers). Market solutions will include revenue from leveraging TMX Group's capabilities to introduce new operating models into sectors and asset classes not currently served by TMX Group.

Other includes revenue related to foreign exchange gains and losses and other services, along with certain consolidation and elimination adjustments. For a reclassification of TMX Group's historical revenue based on these pillars, please see TMX Group's press release dated Feb. 10, 2016: TMX Group revenue reporting reclassification -- 2014 to third quarter 2015 historical revenue.

Revenue was $177.1-million in fourth quarter 2015, down $5.6-million, or 3 per cent, from revenue of $182.7-million in fourth quarter 2014. There was a decrease in capital formation, efficient markets and derivatives revenue, partially offset by an increase in market insights revenue. There was a favourable impact from a weaker Canadian dollar relative to other currencies, including the U.S. dollar, in fourth quarter 2015 versus fourth quarter 2014. The impact was approximately $6-million.

Market insights:

• The increase in market insights revenue reflected the positive impact of a stronger U.S. dollar relative to the Canadian dollar in fourth quarter 2015 compared with fourth quarter 2014 and the addition of the microwave network business (TMX Atrium Wireless), including the launch of TMX Group's New Jersey to Toronto area microwave service in July, 2015. There was also higher revenue from recoveries related to underreported usage of real-time quotes in prior periods and TMX Atrium.
• There was a 6-per-cent decrease in the average number of professional market data subscriptions for TSX and TSX-V products (109,663 professional market data subscriptions in fourth quarter 2015 compared with 116,102 in fourth quarter 2014).
• The average number of MX professional market data subscriptions increased by 1 per cent (19,319 MX professional market data subscriptions in fourth quarter 2015 compared with 19,191 in fourth quarter 2014).

Capital formation

Initial listing fee revenue in fourth quarter 2015 decreased compared with fourth quarter 2014, reflecting a decline in the number of initial public offerings on the Toronto Stock Exchange. In addition, there was a decrease in the amount of initial public offering financings on the TSX Venture Exchange.

Additional listing fees in fourth quarter 2015 declined over fourth quarter 2014, reflecting an 11-per-cent decline in additional listing fees billed on the TSX (both at and below the maximum fee). A significant portion of the companies listed on the TSX-V are resource-based and energy companies that continue to be negatively impacted by lower commodity prices, including crude oil and various metals. This resulted in a decline in the number of financings, the amount of supplementary financings and additional listing fees on the TSX-V in fourth quarter 2015 compared with fourth quarter 2014.

Issuers listed on the TSX and the TSX-V 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 on the TSX was due to an increase in the market capitalization for issuers at Dec. 31, 2014, compared with Dec. 31, 2013, and an increase in the maximum sustaining listing fee on the TSX, effective Jan. 1, 2015. The increase on the TSX was partially offset by the impact of a decrease in the market capitalization of issuers listed on the TSX-V at Dec. 31, 2014, compared with Dec. 31, 2013.

Other issuer services revenue in fourth quarter 2015 was lower compared with fourth quarter 2014, reflecting lower revenue from the Equicom Group Inc., which was sold in July, 2015.

Derivatives

The decrease in derivatives revenue was driven by a decline in revenue for both BOX and MX. Effective first quarter 2015, BOX market participants received volume performance rights (VPRs) as an incentive to provide volume. These commitments were met during fourth quarter 2015 (in the aggregate) and contributed to higher overall volume. The associated cost of the VPRs was recorded as a reduction in revenue and was the major factor in the decline in BOX revenue from fourth quarter 2014 to fourth quarter 2015. Volumes increased by 27 per cent on BOX (29.3 million contracts traded in fourth quarter 2015 versus 23.1 million contracts traded in fourth quarter 2014). There was also a positive impact from a stronger U.S. dollar relative to the Canadian dollar in fourth quarter 2015 compared with fourth quarter 2014. Higher volumes on the MX were largely offset by a lower average fee. Volumes increased by 4 per cent on the MX (20.2 million contracts traded in fourth quarter 2015 versus 19.5 million contracts traded in fourth quarter 2014). In addition, there was a decline in REPO revenue, as well as in revenue from the regulatory division, in fourth quarter 2015 compared with fourth quarter 2014.

Efficient markets and market solutions

The decrease in equities and fixed-income trading revenue reflected the impact of a 22-per-cent decrease in overall volume of securities traded on TMX Group's equities marketplaces (30.0 billion securities in fourth quarter 2015 versus 38.6 billion securities in fourth quarter 2014). The impact from a decrease in the volume of securities traded on the TSX, the TSX-V and Alpha was partially offset by the impact from a favourable customer and product mix on the TSX. In September, 2015, TMX closed TMX Select and launched a new trading model on Alpha as part of the TMX equity trading restructuring plan announced in October, 2014. TMX Group's combined domestic equities trading market share excluding intentional crosses was 71 per cent in fourth quarter 2015 compared with 76 per cent in fourth quarter 2014. Including intentional crosses, TMX Group's combined domestic equities trading market share was 67 per cent in fourth quarter 2015 compared with 74 per cent in fourth quarter 2014. In addition, revenue from Shorcan Brokers was lower in fourth quarter 2015 compared with fourth quarter 2014, reflecting lower volumes in government of Canada and provincial bonds.

CDS revenue decreased in fourth quarter 2015 compared with fourth quarter 2014, reflecting lower clearing volumes and reduced revenue from other services. The increase in energy trading and clearing revenue reflected the positive impact from a stronger U.S. dollar relative to the Canadian dollar in fourth quarter 2015 compared with fourth quarter 2014 on the revenues of NGX and Shorcan Energy Brokers and price increases for certain natural gas contracts. The increases were partially offset by a net deferral of revenue in NGX in fourth quarter 2015 compared with a net recapture in fourth quarter 2014. Total energy volumes on NGX increased by 3 per cent (3.4 million terajoules in fourth quarter 2015 compared with 3.3 million terajoules in fourth quarter 2014) as natural gas volumes increased from fourth quarter 2014 to fourth quarter 2015. U.S. power volume also increased as a result of a discounting program for longer-dated transactions. There was also an increase in revenue from Shorcan Energy Brokers in fourth quarter 2015 compared with fourth quarter 2014 reflecting higher volumes.

Other

The decrease in other revenue was primarily due to lower net foreign exchange gains on U.S.-dollar and other non-Canadian-dollar-denominated net monetary assets in fourth quarter 2015 compared with fourth quarter 2014.

Operating expenses before realignment expenses

Operating expenses before realignment expenses in fourth quarter 2015 were up 1 per cent from fourth quarter 2014. During fourth quarter 2015, there was an increase in costs related to Razor Risk of $3.5-million, as well as additional costs related to TMX Atrium Wireless. However, there was a reduction in expenses related to the operations of Equicom (sold in July, 2015). There was an unfavourable impact from a weaker Canadian dollar relative to other currencies, including the U.S. dollar, in fourth quarter 2015 versus fourth quarter 2014. The impact was approximately $3-million.

Compensation and benefits:

• Compensation and benefits costs increased due to higher costs related to Razor Risk of $3.7-million, lower capitalization of labour and additional costs related TMX Atrium Wireless.
• These increases were partially offset by a reduction in Equicom costs (sold in July, 2015), lower overall employee performance incentive plan costs and reduced compensation expense due to lower head count.
• There were 1,187 TMX Group employees at Dec. 31, 2015, versus 1,323 employees at Dec. 31, 2014.

Information and trading systems

Information and trading system expenses increased primarily due to new costs related to circuits and towers associated with TMX Atrium Wireless. These increases were partially offset by lower operating-expense-related network and server costs.

Selling, general and administration

Selling, general and administration costs decreased in fourth quarter 2015 due to lower occupancy costs, lower bad debts, the elimination of Equicom costs (sold in July, 2015) and a reduction in costs in BOX. These were partially offset by additional operating costs associated with TMX Atrium Wireless and the reversal of a 2011 commodity tax provision in 2014 of $2.5-million.

Depreciation and amortization

Depreciation and amortization costs reflect a reduction in amortization relating to intangible assets of $1.1-million and a reduction in depreciation of fixed assets of $300,000. The depreciation and amortization costs of $16.6-million included $9.3-million ($8.8-million, net of NCI) related to amortization of intangibles related to acquisitions (11 cents per basic and diluted share).

Realignment expenses

Realignment expenses of $8.2-million (11 cents per basic and diluted share) include severance expense of $7.9-million (11 cents per basic and diluted share) and professional fees of $300,000.

Impairment charges

In accounting for the Maple transaction, all of TMX Group's assets were recorded based on fair value in third quarter 2012 and at a time when the resource sector was much more robust. While TMX Group's revenue and customer base are somewhat diversified, a significant portion of TMX Group's issuers come from the resource sector. The valuation of goodwill and intangible assets was established near the peak of the commodity cycle. Since that time, the impact of lower commodity prices and the downturn in the resource sector have significantly impacted financing and trading activity. Specifically, the TSX-V market and the smaller-market-cap listings on the TSX have been negatively impacted, and this has contributed to the impairment in the value of goodwill and intangible assets attributed to certain cash-generating units, or CGUs. As at Dec. 31, 2015, TMX Group determined that the fair value of the listings, equities trading, BOX and other CGUs had recoverable amounts less than their carrying amounts. TMX Group recognized a non-cash impairment charge of $215.8-million ($3.57 per basic and diluted share) related to goodwill and intangible assets for those CGUs.

Income tax expense

Excluding the impact of the non-cash impairment charges in fourth quarter 2015 of $215.8-million, the effective tax rate would have been approximately 27 per cent in fourth quarter 2015.

Net loss attributable to non-controlling interests

MX now holds a 49.4-per-cent ownership interest in BOX Holdings Group LLC, which holds all the membership units of BOX. In January, 2015, BOX launched a program to incent subscribers to provide liquidity. In exchange for providing this liquidity, subscribers will receive VPRs, which are composed of Class C units of BOX Holdings and an order flow commitment. As a result, MX's ownership interest in BOX Holdings decreased from 53.8 per cent in fourth quarter 2014 to 49.4 per cent in fourth quarter 2015. The results for BOX are consolidated in TMX Group's consolidated income statements as TMX Group continues to hold majority voting power. Net loss attributable to non-controlling interests represents the other BOX members' share of BOX's income or loss for the period. The increase in loss from fourth quarter 2014 to fourth quarter 2015 reflected the non-controlling interest's share of non-cash impairment charges related to BOX and lower revenue.

Summary of cash flows

The decrease in cash flows from operating activities in fourth quarter 2015 compared with fourth quarter 2014 reflected lower income from operations (excluding depreciation and amortization) and a decrease in cash related to deferred revenue, as well as trade and other payables. These decreases in cash were partially offset by an increase in cash related to trade and other receivables, and prepaid expenses. In fourth quarter 2015, cash flows used in financing activities was higher than in fourth quarter 2014 primarily due to significantly higher net repayments on TMX Group's commercial paper, partially offset by an increase in net drawings on liquidity facilities. In fourth quarter 2015, cash flows from investing activities was higher than in fourth quarter 2014. In fourth quarter 2014, there was a net cash outflow of $14.7-million related to the cost of acquisitions (net of cash acquired). There was an increase in dividends received, as well as a reduction in cash outlays for additions to premises and equipment and intangible assets, in fourth quarter 2015 compared with fourth quarter 2014. Partially offsetting the increases in cash, the net sale of marketable securities was lower in fourth quarter 2015 than in fourth quarter 2014.

For a more meaningful discussion of the results of operations for 2015 compared with 2014, please see TMX Group's 2015 management's discussion and analysis that can be accessed through SEDAR or TMX Group's website.

                                 CONSOLIDATED INCOME (LOSS) STATEMENTS  
                    (in millions of Canadian dollars, except per-share amounts) 

                                                               For the three months          For the year
                                                                      ended Dec. 31,        ended Dec. 31,
                                                                   2015        2014        2015        2014

Revenue                                                     $     177.1    $  182.7    $  717.0     $ 717.3
REPO interest
Interest income                                                     8.8        22.7        46.2        77.1
Interest expense                                                   (8.8)      (22.7)      (46.2)      (77.1)
Net REPO interest                                                    --          --          --          --
Total revenue                                                     177.1       182.7       717.0       717.3
Compensation and benefits                                          56.0        52.9       219.2       206.8
Information and trading systems                                    22.1        21.6        77.2        70.0
Selling, general and administration                                21.9        23.2        84.2        91.6
Depreciation and amortization                                      16.6        18.0        69.0        70.3
Total operating expenses before realignment expenses              116.6       115.7       449.6       438.7
Income from operations before realignment expenses                 60.5        67.0       267.4       278.6
Realignment expenses                                                8.2          --        22.7          --
Income from operations                                             52.3        67.0       244.7       278.6
Net income from equity-accounted investees                          0.8         0.6         2.8         3.0
Impairment charges                                               (215.8)         --      (221.7)     (136.1)
Maple transaction and integration costs                              --        (2.5)         --        (6.7)
Finance income (costs)
Finance income                                                      0.4         1.1         2.9         4.2
Finance costs                                                      (9.6)      (10.5)      (40.2)      (43.2)
Credit facility refinancing expenses                                 --          --          --        (3.6)
Net finance costs                                                  (9.2)       (9.4)      (37.3)      (42.6)
(Loss) income before income taxes                                (171.9)       55.7       (11.5)       96.2
Income tax expense                                                  3.0        14.9        57.0        41.6
Net (loss) income                                           $    (174.9)   $   40.8     $ (68.5)     $ 54.6
Net (loss) income attributable to
Equity holders of the company                               $    (159.0)   $   41.1     $ (52.3)     $100.5
Non-controlling interests                                         (15.9)       (0.3)      (16.2)      (45.9)
Total                                                       $    (174.9)   $   40.8     $ (68.5)     $ 54.6
(Loss) earnings per share (attributable to equity holders
of the company)
Basic                                                       $     (2.92)   $   0.76     $ (0.96)     $ 1.85
Diluted                                                     $     (2.92)   $   0.76     $ (0.96)     $ 1.85

Financial statements governance practice

The finance and audit committee of the board of directors of TMX Group reviewed this press release, as well as the 2015 audited annual consolidated financial statements and related management's discussion and analysis, and recommended they be approved by the board of directors. Following review by the full board, the 2015 audited annual consolidated financial statements, MD&A and the contents of this press release were approved.

Consolidated financial statements

The company's 2015 audited annual consolidated financial statements are prepared in accordance with international financial reporting standards and are reported in Canadian dollars. The financial measures included in this press release are derived from financial information prepared in accordance with IFRS, unless otherwise specified. All amounts in the press release are in Canadian dollars unless otherwise noted.

TMX Group has filed its 2015 audited annual consolidated financial statements and MD&A with Canadian securities regulators today, after which time these documents may be accessed through SEDAR or on the TMX Group website. TMX Group is 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 TMXshareholder@tmx.com.

Teleconference/audio webcast

TMX Group will host a teleconference/audio webcast to discuss the financial results for fourth quarter 2015.

Time:  8 a.m. to 9 a.m. ET on Feb. 12, 2016

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

The audio webcast of the conference call will also be available on TMX Group's website under investor relations.

Teleconference number:  647-427-7450 or 1-888-231-8191

Audio replay:  416-849-0833 or 1-855-859-2056

Passcode for the replay:  17628721

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