Mr. Thomas Kloet reports

TMX GROUP LIMITED REPORTS RESULTS FOR THE SECOND QUARTER 2014

TMX Group Ltd. has released its results for the second quarter ended June 30, 2014.

• Revenue of $182.3-million in the second quarter of 2014, unchanged from the second quarter of 2013;
• Operating expenses of $111.1-million in the second quarter of 2014, down 3 per cent compared with the second quarter of 2013;
• Income from operations of $71.3-million in the second quarter of 2014, up 6 per cent compared with the second quarter of 2013;
• Diluted loss per share of 49 cents in the second quarter of 2014 due to non-cash impairment charges, compared with diluted earnings per share of 47 cents in the second quarter of 2013;
• Adjusted diluted earnings per share of $1.01 in the second quarter of 2014, up 13 per cent compared with the second quarter of 2013;
• Adjusted diluted earnings per share of $1.01 excludes:
  • $1.31-per-share non-cash impairment charges largely related to BOX (Boston Options Exchange);
  • 13 cents per share of amortization of intangibles related to acquisitions;
  • Five-cent-per-share charge related to credit facility refinancing expenses;
  • One-cent-per-share charge related to the Maple transaction and integration costs.

Commenting on the second quarter of 2014, Thomas Kloet, chief executive officer of TMX Group, said: "We are pleased with our accomplishments this past quarter, including the successful implementation of our high-performance TMX Quantum XA trading engine on Toronto Stock Exchange in June. Over all, Canadian equities markets experienced a significant increase in capital raised during Q2/14 compared with the same period last year, as is reflected in our issuer services revenue. Importantly, in Q2/14 there were revenue increases in several lines of business, which offset the permanent loss in revenue following the termination of the CDS [Canadian Depository for Securities Ltd.] contract with securities regulators and the impact of lower trading volumes on our marketplaces compared with Q2/13. We continue to focus on new initiatives to further diversify our business and deliver increased value to our customers."

Mr. Kloet added: "As I approach retirement, I leave with great pride in what we have accomplished as a team over the last six years. I look forward to what I know will be a bright future for TMX Group. The search committee of the board is continuing its process of selecting my successor and we will have an update as events unfold."

Michael Ptasznik, chief financial officer of TMX Group, said: "While our revenue for Q2/14 was essentially unchanged from Q2/13, we experienced growth in additional listing fee revenue, information services revenue and revenue from Razor Risk. The growth was offset by lower trading and clearing revenue, as well as reduced technology services revenue following the discontinuation of CDS's arrangement with securities regulators to provide SEDAR and other services. Operating expenses declined by 3 per cent in Q2/14 compared with the same quarter last year, as we benefited from realizing cost synergies. Our results also benefited from our Q3/13 debt refinancing activities and the launch of our commercial paper program in June. All of this is reflected in adjusted diluted earnings per share growth of 13 per cent. We were required to take a non-cash impairment charge in Q2/14 related to our investment in BOX reflecting lower revenue projections for the business. The management and board of BOX are focused on building BOX's liquidity in the highly competitive U.S. options market."

Summary of financial information

Three months ended June 30, 2014, compared with three months ended June 30, 2013

The information in the accompanying table reflects the financial statements of TMX Group for the quarter ended June 30, 2014, compared with the quarter ended June 30, 2013.

                                                                                                                      
(in millions of dollars, except per-share amounts)             Q2 2014   Q2 2013

Revenue                                                       $  182.3  $  182.3
Operating expenses                                               111.0     115.0
Income from operations                                            71.3      67.3
Net (loss) income attributable to TMX Group shareholders         (26.4)     25.5
(Loss) earnings per share(1)
Basic                                                            (0.49)     0.47
Diluted                                                          (0.49)     0.47
Cash flows from operating activities                              90.9      85.6

1. (Loss) earnings per share information is based on net income attributable to 
   TMX Group shareholders.

Results of operations

Revenue

Revenue was $182.3-million in the second quarter of 2014, in line with revenue of $182.3-million in the second quarter of 2013. There were increases in issuer services and information services revenue, offset by lower revenue from trading and clearing revenue from cash and derivatives markets, as well as a decrease in technology services revenue. The decrease in technology services revenue is primarily due to the discontinuation of CDS services largely relating to the administration of SEDAR, the System for Electronic Disclosure by Insiders (SEDI) and the National Registration Database (NRD). These CDS operations were transitioned to a new service provider on Jan. 13, 2014; the CDS agreement ended on Jan. 31, 2014.

Operating expenses

Operating expenses in the second quarter of 2014 were $111-million, down $4-million or 3 per cent from $115-million in the second quarter of 2013. Operating expenses were lower, reflecting the cost synergies realized as a result of the integration of TMX Group Inc., CDS, and Alpha Trading Systems Inc. and Alpha Trading Systems LP (collectively, Alpha), lower bad debts expense, and lower operating expenses related to providing SEDAR, SEDI and NRD services following the termination of the agreement with Canadian securities regulators on Jan. 31, 2014, partially offset by higher compensation and benefits costs.

Impairment charges

In accounting for the Maple transaction, all of TMX Group's assets, including BOX, were recorded based on their estimated fair value in the third quarter of 2012, resulting in a significant amount of goodwill and intangible assets being recognized at the time.

Based on tests for impairment of goodwill and intangible assets at the end of the second quarter of 2014, TMX Group recognized a non-cash impairment charge of $128.4-million pretax ($106.2-million after tax), primarily related to BOX's goodwill and customer list. Of the $106.2-million after-tax impairment charge, $42.6-million was attributable to NCI. The net effect on shareholders of TMX Group was $63.6-million.

MX (Montreal Exchange) invested approximately $70.5-million to purchase its equity interest in BOX since its inception. Since then, TMX Group has also received dividends from BOX as well as technology services revenue related to the licensing of TMX Group's SOLA technology. Net of the impairment charges in the second quarter of 2014, the resulting carrying value of BOX is $45.2-million, net of NCI, on TMX Group's condensed consolidated interim balance sheet as at June 30, 2014.

In addition to the BOX assets, TMX Group determined that certain other assets had recoverable amounts that were lower than their respective carrying amounts. As a result, TMX Group recognized a non-cash impairment charge of $7.7-million (before and after tax) related to goodwill for those assets.

Net (loss) income attributable to TMX Group shareholders

Net loss attributable to TMX Group shareholders was $26.4-million or 49 cents per common share on a basic and diluted basis, a decrease of 204 per cent compared with net income of $25.5-million or 47 cents per common share on a basic and diluted basis in the second quarter of 2013. The decrease primarily reflects the recognition of non-cash impairment charges related to BOX and other assets and credit facility refinancing expenses, partially offset by higher income from operations and lower finance costs following the refinancing of approximately $1-billion of debt under TMX Group's credit facility through the issuance of debentures, the amendment of its credit facility under more favourable terms at the end of the third quarter of 2013 and the launch of its commercial paper program in June, 2014. Net income in the second quarter of 2013 reflects a significantly higher income tax expense related to the sale of PC-Bond.

Six months ended June 30, 2014, compared with six months ended June 30, 2013

The information below reflects the financial statements of TMX Group for the six months ended June 30, 2014 (1H/14), including the operating results of TMX Equity Transfer Services Inc. (Equity Transfer) from April 5, 2013, compared with the six months ended June 30, 2013 (1H/13).

                                               
(in millions of dollars, except per-share amounts)              H1 2014   H1 2013

Revenue                                                        $  364.4  $  354.5
Operating expenses                                                215.8     227.0
Income from operations                                            148.6     127.5
Net income attributable to TMX Group shareholders                  20.0      63.3
Earnings per share(1)
Basic                                                              0.37      1.17
Diluted                                                            0.37      1.17
Cash flows from operating activities                              123.9     160.6

1. Earnings per share information is based on net income attributable to TMX Group 
   shareholders.

Results of operations

Revenue

Revenue was $364.4-million in the first half of 2014, up $9.9-million or 3 per cent compared with revenue of $354.5-million in the first half of 2013. Issuer services revenue included revenue from Equity Transfer (acquired on April 5, 2013). There were increases in issuer services and information services revenue, partially offset by lower trading and clearing revenue from derivatives markets and a decrease in technology services revenue reflecting the discontinuation of CDS services largely relating to the administration of SEDAR, SEDI and NRD. These CDS operations were transitioned to a new service provider on Jan. 13, 2014; the CDS agreement ended on Jan. 31, 2014. In addition, there was a reduction in revenue following the sale of PC-Bond on April 5, 2013.

Operating expenses

Operating expenses in the first half of 2014 were $215.8-million, down $11.2-million or 5 per cent from $227-million in the first half of 2013. Operating expenses were lower, reflecting the cost synergies realized as a result of the integration of TMX Group Inc., CDS and Alpha, the elimination of operating expenses related to PC-Bond that were no longer consolidated following the sale on April 5, 2013, and lower operating expenses related to providing SEDAR, SEDI and NRD services following the termination of the agreement with Canadian securities regulators on Jan. 31, 2014. These decreases were partially offset by the inclusion of six months of operating expenses for Equity Transfer (acquired on April 5, 2013) in the first half of 2014, compared with three months in the first half of 2013.

Net income attributable to TMX Group shareholders

Net income attributable to TMX Group shareholders was $20-million or 37 cents per common share on a basic and diluted basis, compared with net income of $63.3-million or $1.17 per common share on a basic and diluted basis in the first half of 2013. The decrease reflects the recognition of non-cash impairment charges related to BOX and other assets and credit facility refinancing expenses, partially offset by higher income from operations and lower finance costs following the refinancing of approximately $1-billion of debt under TMX Group's credit facility through the issuance of debentures, the amendment of its credit facility under more favourable terms at the end of the third quarter of 2013 and the launch of its commercial paper program in June, 2014. Net income in the first half of 2013 reflects higher income tax expense related to the sale of PC-Bond.

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 second quarter 2014 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 second quarter 2014 financial statements, the MD&A and the contents of this press release were approved.

Access to quarterly materials

TMX Group has filed its second quarter 2014 financial statements and MD&A with Canadian securities regulators. 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.

Teleconference/audio webcast

TMX Group will host a teleconference/audio webcast to discuss the financial results for the second quarter of 2014.

Time:  8 a.m. to 9 a.m. ET on Friday, Aug. 8, 2014

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

The passcode for the replay is 71572285.

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