- Revenue of
$252.4 million , up 15% from$219.5 million in Q4/20 - Diluted earnings per share of
$1.56 , up 24% from$1.26 in Q4/20 - Adjusted diluted earnings per share1 of
$1.77 , up 24% over$1.43 in Q4/20 - Cash flows from operating activities of
$103.0 million , up 2% from$100.6 million in Q4/20 - Increased quarterly dividend by
6 cents per common share, up 8% to83 cents per common share
Commenting on 2021 and the company's outlook,
"TMX's excellent 2021 results, highlighted by double digit revenue and earnings per share growth, reflect an extraordinary year for clients raising capital on our markets and strength across our business model. Year-over-year growth was driven by increased revenue from Capital Formation, Derivatives Trading and Clearing, and Trayport. We are extremely proud of the efforts of our people in driving TMX's success, and thankful for their exemplary efforts in serving our clients and industry stakeholders through all market conditions. As we move forward in 2022, TMX is focused on building our great markets even stronger, innovating and adapting to meet the evolving needs of the marketplace, and accelerating our global growth strategy."
Commenting on
"We were pleased to deliver very strong financial results this past quarter with revenue growth of 15% and organic revenue growth of 11%2.
_________________________ |
1 Adjusted diluted earnings per share is a non-GAAP ratio, see discussion under the heading "Non-GAAP Measures". |
2 Organic revenue excludes acquisitions ( |
RESULTS OF OPERATIONS
Non-GAAP Measures
Adjusted net income is a non-GAAP measure and adjusted earnings per share, and adjusted diluted earnings per share are non-GAAP ratios, and do not have standardized meanings prescribed by GAAP and are, therefore, unlikely to be comparable to similar measures presented by other companies.
Management uses these measures, and excludes certain items, because it believes doing so provides investors a more effective analysis of underlying operating and financial performance, including, in some cases, our ability to generate cash. Management also uses these measures to more effectively measure performance over time, and excluding these items increases comparability across periods. The exclusion of certain items does not imply that they are non-recurring or not useful to investors.
We present adjusted earnings per share, adjusted diluted earnings per share, and adjusted net income to indicate ongoing financial performance from period to period, exclusive of a number of adjustments as outlined under the heading "Adjusted Net Income and Adjusted Earnings Per Share Reconciliation for Q4/21 and Q4/20" and "Adjusted Net Income and Adjusted Earnings Per Share Reconciliation for 2021 and 2020".
Quarter ended
The information below reflects the financial statements of
(in millions of dollars, except per | Q4/21 | Q4/20 | $ increase | % increase |
Revenue | 15% | |||
Operating expenses | 136.2 | 113.4 | 22.8 | 20% |
Income from operations | 116.2 | 106.1 | 10.1 | 10% |
Net income | 87.9 | 71.8 | 16.1 | 22% |
Adjusted net income3 | 99.0 | 81.3 | 17.7 | 22% |
Earnings per share | ||||
Basic | 1.57 | 1.27 | 0.30 | 24% |
Diluted | 1.56 | 1.26 | 0.30 | 24% |
Adjusted Earnings per share4 | ||||
Basic | 1.77 | 1.44 | 0.33 | 23% |
Diluted | 1.77 | 1.43 | 0.34 | 24% |
Cash flows from operating activities | 103.0 | 100.6 | 2.4 | 2% |
_________________________ |
3 Adjusted net income is a non-GAAP measure, see discussion under the heading "Non-GAAP Measures". |
4 Adjusted earnings per share is a non-GAAP ratio, see discussion under the heading "Non-GAAP Measures". |
Net Income and Earnings per Share
Net income in Q4/21 was
Adjusted Net Income5 and Adjusted Earnings per Share6 Reconciliation for Q4/21 and Q4/20
The following are reconciliations of net income to adjusted net income; and earnings per share to adjusted earnings per share ; the adjustments include:
- The amortization expenses of intangible assets in Q4/20 and Q4/21 related to the Maple transaction (TSX, TSXV, MX, CDS, Alpha, Shorcan),
TSX Trust , Trayport (including Visotech and Tradesignal), and AST Canada; and is a component of Depreciation and amortization expenses. - An adjustment to deferred income tax liabilities in Q4/21 relating to a change in the
U.K. corporate income tax rate effectiveApril 1, 2023 . The increase in deferred income tax liabilities of$19.8 million in Q2/21 was reduced by$0.2 million in Q4/21 following updated information. This adjustment in deferred income tax liabilities is included in Income tax expense, see Additional Information - Income tax expense and effective tax rate for more details. - Acquisition and related costs in Q4/20 associated with acquiring AST Canada, and Q4/21 associated with acquiring AST Canada and Tradesignal. These costs are included in Selling general, and administration and Compensation and benefits.
- Integration costs related to integrating the AST Canada acquisition in Q4/21. These costs are included in Selling, general and administration and Compensation and benefits.
- A reversal of a write-off of deferred income tax assets in 2017 related to
TMX Atrium Wireless (soldApril 2017 ) in Q4/21. This increase in deferred income tax assets is included in Income tax expense, see Additional Information - Income tax expense and effective tax rate for more details. - A reduction in commodity tax provision of
$0.2 million in Q4/20, and is included in Selling general and administration.
_________________________ |
5 Adjusted net income is a non-GAAP measure, see discussion under the heading "Non-GAAP Measures". |
6 Adjusted earnings per share is a non-GAAP ratio, see discussion under the heading "Non-GAAP Measures". |
Pre-tax | Tax | After-tax | ||||||
(in millions of dollars) | Q4/21 | Q4/20 | Q4/21 | Q4/20 | Q4/21 | Q4/20 | $ increase / | % increase / |
Net income | 22% | |||||||
Adjustments related to: | ||||||||
Amortization of intangibles | 13.4 | 11.9 | 2.2 | 2.5 | 11.2 | 9.4 | 1.8 | 19% |
Adjustment to deferred | — | — | 0.2 | — | (0.2) | — | (0.2) | n/a |
Acquisition and related | 1.0 | 0.4 | — | 0.1 | 1.0 | 0.3 | 0.7 | 233% |
Integration costs8 | 2.8 | — | 0.8 | — | 2.0 | — | 2.0 | n/a |
Reversal of a previous write- | — | — | 2.9 | — | (2.9) | — | (2.9) | n/a |
Reduction in commodity tax | — | (0.2) | — | — | — | (0.2) | 0.2 | (100)% |
Adjusted net income10 | 22% |
Adjusted net income increased by 22% from
_________________________ |
7 Includes costs related to the acquisitions of AST Canada (acquired |
8 Includes costs related to the integration of AST Canada (acquired |
9 Related to |
10 Adjusted net income is a non-GAAP measure, see discussion under the heading "Non-GAAP Measures". |
Q4/21 | Q4/20 | |||
(unaudited) | Basic | Diluted | Basic | Diluted |
Earnings per share | ||||
Adjustments related to: | ||||
Amortization of intangibles related to acquisitions | 0.20 | 0.20 | 0.17 | 0.17 |
Acquisition and related costs11 | 0.02 | 0.02 | — | — |
Integration costs12 | 0.04 | 0.04 | — | — |
Reversal of a previous write-off of deferred income | (0.05) | (0.05) | — | — |
Reduction in commodity tax provision | — | — | — | — |
Adjusted earnings per share14 | ||||
Weighted average number of common shares | 55,950,887 | 56,293,788 | 56,481,774 | 56,945,696 |
Adjusted diluted earnings per share increased by 23% from
_________________________ |
11 Includes costs related to the acquisitions of AST Canada (acquired |
12 Includes costs related to the integration of AST Canada (acquired |
13 Related to |
14 Adjusted earnings per share is a non-GAAP ratio, see discussion under the heading "Non-GAAP Measures". |
Revenue
(in millions of dollars) | Q4/21 | Q4/20 | $ increase | % increase |
Capital Formation | 33% | |||
Equities and Fixed Income Trading | 58.0 | 56.3 | 1.7 | 3% |
Derivatives Trading and Clearing | 38.2 | 30.8 | 7.4 | 24% |
| 89.1 | 82.6 | 6.5 | 8% |
Other | (0.1) | (0.8) | 0.7 | 88% |
15% |
Revenue was
Capital Formation
(in millions of dollars) | Q4/21 | Q4/20 | $ increase | % increase |
Initial listing fees | 125% | |||
Additional listing fees | 24.2 | 22.6 | 1.6 | 7% |
Sustaining listing fees | 19.3 | 17.5 | 1.8 | 10% |
Other issuer services | 17.4 | 7.7 | 9.7 | 126% |
33% |
- Initial listing fees in Q4/21 increased from Q4/20 primarily due to an increase in the amount of deferred initial listing fee revenue recognized in Q4/21 compared with Q4/20 on TSX and TSXV. We recognized initial listing fees received in 2020 and 2021 of
$6.0 million in Q4/21 compared with initial listing fees received in 2019 and 2020 of$2.5 million in Q4/20. - Based on initial listing fees billed in 2020 and 2021, the following amounts have been deferred to be recognized in Q1/22, Q2/22, Q3/22 and Q4/22:
$5.0 million ,$3.3 million ,$1.8 million and$0.5 million respectively. Total initial listing fees revenue for future quarters will also depend on listing activity in those quarters. - Additional listing fees in Q4/21 increased compared to Q4/20 reflecting an increase in additional listing fee revenue from Q4/20 to Q4/21 due to increases in both the total number of financings and total financing dollars raised on TSX and TSXV. There was an increase in additional listing fee revenue on TSX reflecting a 52% increase in the number of transactions billed at the maximum listing fee of
$250,000 , partially offset by a 6% decrease in the number of transactions billed below the maximum fee from Q4/20 to Q4/21. - Issuers listed on TSX and TSXV pay annual sustaining listing fees primarily based on their market capitalization at the end of the prior calendar year, subject to minimum and maximum fees. There was an increase in sustaining listing fees on both TSX and TSXV from Q4/20 to Q4/21 reflecting an increase in the market capitalization of issuers at
December 31, 2020 compared withDecember 31, 2019 . - Other issuer services revenue in Q4/21 increased compared to Q4/20, and included approximately
$8.6 million of revenue related to AST Canada (acquiredAugust 12, 2021 ). Excluding AST Canada, Other issuer services revenue increased 14% primarily due to higher revenue fromTSX Trust related to higher transfer agency and corporate trust revenues.
Equities and Fixed Income Trading and Clearing
(in millions of dollars) | Q4/21 | Q4/20 | $ increase / | % increase / |
Equities and fixed income trading | ( | (4)% | ||
Equities and fixed income clearing, | 28.6 | 25.7 | 2.9 | 11% |
3% |
- CDS revenue increased from Q4/20 to Q4/21. There was higher depository, event management fee, international as well as clearing and settlement revenue in Q4/21 compared with Q4/20. The increases in revenue were partially offset by higher rebates and lower network fees.
- There was a decrease in Equities and Fixed Income Trading revenue in Q4/21 compared with Q4/20 driven by lower volumes on TSX, TSXV and Alpha. The impact from the lower volumes was somewhat offset by higher yields in Q4/21 compared with Q4/20. There was also a decrease in Fixed Income Trading revenue reflecting decreased activity in swaps.
- The overall volume of securities traded on our equities marketplaces decreased by 9% (41.4 billion securities in Q4/21 versus 45.7 billion securities in Q4/20). There were decreases in volumes of 6% on TSX, 17% on TSXV, and 6% on Alpha in Q4/21 compared with Q4/20.
- Excluding intentional crosses, for TSX and TSXV listed issues, our combined domestic equities trading market share was approximately 65% in Q4/21, down 2% from approximately 67% in Q4/20. We only trade securities that are listed on TSX or TSXV.
- Excluding intentional crosses, in all listed issues in
Canada , our combined domestic equities trading market share was approximately 55% in Q4/21, down 1% from approximately 56% in Q4/20.
Derivatives Trading and Clearing
(in millions of dollars) | Q4/21 | Q4/20 | $ increase | % increase |
24% |
- There was an increase in Derivatives Trading and Clearing revenue from Q4/20 to Q4/21 driven by higher volumes on MX. The impact from the higher volumes was somewhat offset by lower revenue per contract traded in Q4/21 compared with Q4/20.
- While volumes increased 46% on MX (40.9 million contracts traded in Q4/21 versus 28.0 million contracts traded in Q4/20), there was lower revenue per contract reflecting changes in client mix and product mix. In Q4/21, there was an increase in high volume traders which resulted in lower revenue per contract. In addition, the volume increase was partially driven by contracts with lower yields, including single stock futures which made up 15% of total volumes in Q4/21, compared with 7% in Q4/20.
(in millions of dollars) | Q4/21 | Q4/20 | $ increase | % increase |
Trayport | 10% | |||
GSIA (excluding Trayport) | 50.2 | 47.3 | 6% | |
8% |
The increase in
Trayport
The following table summarizes the average number of Trayport subscribers (excluding VisoTech and Tradesignal) over the last eight quarters15:
Q4/21 | Q3/21 | Q2/21 | Q1/21 | Q4/20 | Q3/20 | Q2/20 | Q1/20 | |
Trader Subscribers | 6,135 | 5,677 | 5,483 | 5,392 | 5,259 | 5,150 | 4,999 | 5,192 |
Total Subscribers | 27,473 | 26,620 | 26,196 | 25,889 | 25,259 | 24,662 | 24,277 | 24,712 |
Revenue (in millions of CAD) | ||||||||
Average CAD-GBP FX rate | 1.71 | 1.72 | 1.71 | 1.77 | 1.73 | 1.74 | 1.70 | 1.74 |
Revenue (in millions of GBP) | £22.7 | £22.0 | £21.3 | £21.1 | £20.4 | £19.6 | £19.7 | £19.4 |
_________________________ |
15 Previous amounts have been restated based on current data. |
Total Subscribers means all chargeable licenses of core Trayport products in core customer segments including Traders, Brokers and Exchanges. Trader Subscribers are a subset of Total Subscribers. Trader Subscribers revenue represents over 50% of total Trayport revenue.
Revenue from Trayport increased by 10% from Q4/20 to Q4/21. In GBP, revenue from Trayport was £22.7 million (based on CAD-GBP FX rate of 1.71) in Q4/21, up 11% over Q4/20. The increase in Trayport revenue was driven by a 17% increase in Trader Subscribers and 9% growth in Total subscribers in Q4/21 compared with Q4/20. In addition, Q4/21 included approximately
GSIA (excluding Trayport)
Revenue from GSIA (excluding Trayport) increased by 6% from Q4/20 to Q4/21. There were higher revenues related to increased usage based quotes, subscriptions, co-location, feeds, and benchmarks and indices. The higher revenue was partially offset by an unfavourable impact of approximately
- The average number of professional market data subscriptions for TSX and TSXV products was up 7% in Q4/21 compared with Q4/20 (108,038 professional market data subscriptions in Q4/21 compared with 101,052 in Q4/20).
- The average number of MX professional market data subscriptions was up 7% in Q4/21 from Q4/20 (20,090 MX professional market data subscriptions in Q4/21 compared with 18,746 in Q4/20).
Other
(in millions of dollars) | Q4/21 | Q4/20 | $ increase | % increase |
88% |
- The increase in Other revenue reflected lower net foreign exchange losses on net monetary assets in Q4/21 compared with Q4/20.
Operating expenses
(in millions of dollars) | Q4/21 | Q4/20 | $ increase | % increase |
Compensation and benefits | 17% | |||
Information and trading systems | 19.4 | 17.7 | 1.7 | 10% |
Selling, general and administration | 25.8 | 16.9 | 8.9 | 53% |
Depreciation and amortization | 23.0 | 20.6 | 2.4 | 12% |
20% |
Operating expenses in Q4/21 were
Compensation and benefits
(in millions of dollars) | Q4/21 | Q4/20 | $ increase | % increase |
17% |
- Compensation and benefits costs increased in Q4/21 reflecting higher headcount and payroll costs including merit increases, increased short term employee incentive plan costs of approximately
$1.3 million , as well as approximately$3.4 million included in Q4/21 related to AST Canada (acquiredAugust 12, 2021 ). In addition, we incurred integration costs related to AST Canada of$1.6 million . These increases were somewhat offset by lower severance costs of approximately$2.0 million and lower long term employee performance incentive plan costs of approximately$0.9 million . - There were 1,576
TMX Group employees atDecember 31, 2021 versus 1,383 employees atDecember 31, 2020 reflecting an increase in headcount attributable to investing in the various growth areas of our business. The headcount in Q4/21, includes approximately 150 employees for AST Canada (acquiredAugust 12, 2021 ) and approximately 15 employees for Tradesignal (acquiredJune 1 , 2021).
Information and trading systems
(in millions of dollars) | Q4/21 | Q4/20 | $ increase | % increase |
10% |
- The increase in Information and trading systems expenses from Q4/20 to Q4/21 was primarily attributable to approximately
$2.0 million included in Q4/21 related to AST Canada (acquiredAugust 12, 2021 ), including$0.6 million related to theTSA and integration costs of$0.4 million .
Selling, general and administration
(in millions of dollars) | Q4/21 | Q4/20 | $ increase | % increase |
53% |
- Selling, general and administration expenses increased in Q4/21 compared with Q4/20 attributable to higher legal costs, recoverable expenses, travel and entertainment costs, and increased marketing expenses in Q4/21 compared with Q4/20. There were also approximately
$5.0 million of selling, general and administration expenses included in Q4/21 related to AST Canada (acquiredAugust 12, 2021 ), including$0.7 million related to the TSA, acquisition and related costs of approximately$0.9 million , as well as integration costs of$0.8 million - These increases in Selling, general and administration expenses were partially offset by acquisition and related costs related to AST Canada in Q4/20 of
$0.4 million .
Depreciation and amortization
(in millions of dollars) | Q4/21 | Q4/20 | $ increase | % increase |
12% |
- There were higher Depreciation and amortization costs reflecting increased amortization related to AST Canada (acquired
August 12, 2021 ) of approximately$1.3 million , as well as Tradesignal (acquiredJune 1 , 2021). - The Depreciation and amortization costs in Q4/21 of
$23.0 million included$13.4 million related to amortization of intangibles related to acquisitions (20 cents per basic and diluted share). - The Depreciation and amortization costs in Q4/20 of
$20.6 million included$11.9 million related to amortization of intangibles related to acquisitions (17 cents per basic and diluted share).
Additional Information
Share of (income) loss from equity accounted investees
(in millions of dollars) | Q4/21 | Q4/20 | $ increase | % increase |
744% |
- The increase in our share of income from equity accounted investees of
$6.7 million primarily reflected an increase in our share of income from BOX reflecting higher revenues driven by a 113% increase in volumes from Q4/20 to Q4/21, partially offset by unfavorable impacts from a stronger Canadian dollar relative to theU.S dollar. In Q4/20, we recognized a loss from our share of BOX driven by an increase in our share of long term employee performance incentive plan costs for the full year of 2020.
Net finance costs
(in millions of dollars) | Q4/21 | Q4/20 | $ increase | % increase |
13% |
- The increase in net finance costs from Q4/20 to Q4/21 largely reflected higher interest expense largely related to the Series F Debentures issued in Q1/21.
Income tax expense and effective tax rate
Income Tax Expense (in millions of dollars) | Effective Tax Rate (%) | ||
Q4/21 | Q4/20 | Q4/21 | Q4/20 |
22% | 26% |
Excluding adjustments, primarily related to items noted below, the effective tax rate would have been approximately 26% for Q4/21 and Q4/20.
- In Q4/21, there was a
$3.9 million increase in our deferred income tax assets, which reduced income tax expense, primarily relating to the carryforward of net operating losses related toTMX Atrium Wireless (soldApril 2017 ) that were not previously recognized. This increase included a reversal of a$2.9 million (5 cents per basic and diluted share) write off of deferred income tax assets in 2017. In Q1/17, we adjusted our basic and diluted earnings per share for this item. As of Q4/21, we expect these net operating losses to now be fully recoverable.
Summary of Cash Flows
Q4/21 compared with Q4/20
(in millions of dollars) | Q4/21 | Q4/20 | $ increase / |
Cash flows from operating activities | |||
Cash flows used in financing activities | (88.5) | (123.9) | 35.4 |
Cash flows used in investing activities | (10.7) | (30.1) | 19.4 |
- In Q4/21, Cash flows from operating activities increased compared with Q4/20 reflecting higher income from operations (excluding depreciation and amortization). This increase was partially offset by decreases in cash related to trade and other receivables, and prepaid expenses, and higher income taxes paid.
- In Q4/21, Cash flows used in financing activities increased compared with Q4/20 reflecting decreased cash used for shares repurchased under normal course issuer bid of
$23.5 million and a lower net draw under credit and liquidity facilities of$8.2 million . - In Q4/21, Cash flows used in investing activities decreased compared with Q4/20 reflecting decreased cash used for additions to premises and equipment and intangible assets of
$11.5 million , and cash used for the net purchase of marketable securities in Q4/20 compared with net sales in Q4/21.
Year ended
The information below reflects the financial statements of
(in millions of dollars, except per share | 2021 | 2020 | $ increase | % increase |
Revenue | 13% | |||
Operating expenses | 489.5 | 449.2 | 40.3 | 9% |
Income from operations | 491.2 | 415.9 | 75.3 | 18% |
Net income | 338.5 | 279.7 | 58.8 | 21% |
Adjusted net income16 | 401.2 | 334.9 | 66.3 | 20% |
Earnings per share | ||||
Basic | 6.03 | 4.96 | 1.07 | 22% |
Diluted | 5.99 | 4.91 | 1.08 | 22% |
Adjusted Earnings per share17 | ||||
Basic | 7.14 | 5.93 | 1.21 | 20% |
Diluted | 7.10 | 5.88 | 1.22 | 21% |
Cash flows from operating activities | 441.4 | 412.2 | 29.2 | 7% |
Net Income and Earnings per Share
Net income in 2021 was
These increases in operating expenses were somewhat offset by
_________________________ |
16 Adjusted net income is a non-GAAP measure, see discussion under the heading "Non-GAAP Measures". |
17 Adjusted earnings per share is a non-GAAP ratio, see discussion under the heading "Non-GAAP Measures". |
Adjusted Net Income18 and Adjusted Earnings per Share19 Reconciliation for 2021 and 2020
The following tables present reconciliations of net income to adjusted net income and earnings per share to adjusted earnings per share. The financial results have been adjusted for the following:
- The amortization expenses of intangible assets in 2020 and 2021 related to the Maple transaction (TSX, TSXV, MX, Alpha, CDS, Shorcan),
TSX Trust , Trayport (including Visotech and Tradesignal), and AST Canada; and is a component of Depreciation and amortization expenses. - An increase in deferred income tax liabilities in 2020 and 2021 relating to a change in the
U.K. corporate income tax rate effectiveApril 1, 2023 . This increase in deferred income tax liabilities is included in Income tax expense, see Additional Information - Income tax expense and effective tax rate for more details. - Acquisition and related costs in 2020 associated with acquiring AST Canada, and 2021 associated with acquiring AST Canada and Tradesignal. These costs are included in Selling general, and administration and Compensation and benefits.
- Integration costs related to integrating the AST Canada acquisition in 2021. These costs are included in Selling, general and administration and Compensation and benefits.
- A reduction in commodity tax provision of
$1.5 million in 2020, and is included in Selling general and administration. - A net litigation settlement cost of
$12.4 million incurred in 2020, and is included in Selling general and administration - A reversal of a
$2.9 million write-off of deferred income tax assets in 2017 related toTMX Atrium Wireless (soldApril 2017 ) in 2021. This increase in deferred income tax assets is included in Income tax expense, see Additional Information - Income tax expense and effective tax rate for more details.
_________________________ |
18 Adjusted net income is a non-GAAP measure, see discussion under the heading "Non-GAAP Measures". |
19 Adjusted earnings per share is a non-GAAP ratio, see discussion under the heading "Non-GAAP Measures". |
Pre-tax | Tax | After-tax | ||||||
(in millions of dollars) | 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | $ increase / | % increase / |
Net income | 21% | |||||||
Adjustments related to: | ||||||||
Amortization of | 49.9 | 47.4 | 9.4 | 9.3 | 40.5 | 38.1 | 2.4 | 6% |
Increase in deferred | — | — | (19.6) | (7.4) | 19.6 | 7.4 | 12.2 | 165% |
Acquisition and related | 3.4 | 1.7 | 0.4 | — | 3.0 | 1.7 | 1.3 | 76% |
Integration costs21 | 3.4 | — | 0.9 | — | 2.5 | — | 2.5 | n/a |
Reduction in commodity | — | (1.5) | — | (0.4) | — | (1.1) | 1.1 | (100%) |
Net litigation settlement | — | 12.4 | — | 3.3 | — | 9.1 | (9.1) | (100%) |
Reversal of a previous | — | — | 2.9 | — | (2.9) | — | (2.9) | n/a |
Adjusted net income23 | 20% |
_________________________ |
20 Includes costs related to the acquisitions of AST Canada (acquired |
21 Includes costs related to the integration of AST Canada (acquired |
22 Related to |
23 Adjusted net income is a non-GAAP measure, see discussion under the heading "Non-GAAP Measures". |
Adjusted net income increased by 20% from
2021 | 2020 | |||
(unaudited) | Basic | Diluted | Basic | Diluted |
Earnings per share | ||||
Adjustments related to: | ||||
Amortization of intangibles related to acquisitions | 0.72 | 0.72 | 0.67 | 0.67 |
Increase in deferred income tax liabilities relating to a | 0.35 | 0.35 | 0.13 | 0.13 |
Acquisition and related costs24 | 0.05 | 0.05 | 0.03 | 0.03 |
Integration costs25 | 0.04 | 0.04 | — | — |
Reduction in commodity tax provision | — | — | (0.02) | (0.02) |
Net litigation settlement costs | — | — | 0.16 | 0.16 |
Reversal of a previous write-off of deferred income tax | (0.05) | (0.05) | — | — |
Adjusted earnings per share27 | ||||
Weighted average number of common shares outstanding | 56,098,460 | 56,474,945 | 56,425,302 | 56,950,290 |
Adjusted diluted earnings per share increased by 21% from
_________________________ |
24 Includes costs related to the acquisitions of AST Canada (acquired |
25 Includes costs related to the integration of AST Canada (acquired |
26 Related to |
27 Adjusted earnings per share is a non-GAAP ratio, see discussion under the heading "Non-GAAP Measures". |
FINANCIAL STATEMENTS GOVERNANCE PRACTICE
CONSOLIDATED FINANCIAL STATEMENTS
Our 2021 audited annual consolidated financial statements are prepared in accordance with IFRS and are reported in Canadian dollars unless otherwise indicated. Financial measures contained in the MD&A and this press release are based on financial statements prepared in accordance with IFRS, unless otherwise specified and are in Canadian dollars unless otherwise indicated.
ACCESS TO MATERIALS
CAUTION REGARDING FORWARD-LOOKING INFORMATION
This press release of
Examples of forward-looking information in this press release include, but are not limited to, growth objectives; our target dividend payout ratio; the ability of
These risks include, but are not limited to: competition from other exchanges or marketplaces, including alternative trading systems and new technologies, on a national and international basis; dependence on the economy of
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
In addition to the assumptions outlined above, forward looking information related to long term revenue cumulative average annual growth rate (CAGR) objectives, and long term adjusted earnings per share CAGR objectives are based on assumptions that include, but not limited to:
TMX Group's success in achieving growth initiatives and business objectives;- continued investment in growth businesses and in transformation initiatives including next generation post-trade systems;
- no significant changes to our effective tax rate, recurring revenue, and number of shares outstanding;
- moderate levels of market volatility;
- level of listings, trading, and clearing consistent with historical activity;
- economic growth consistent with historical activity;
- no significant changes in regulations;
- continued disciplined expense management across our business;
- continued re-prioritization of investment towards enterprise solutions and new capabilities;
- free cash flow generation consistent with historical run rate; and
- a limited impact from the COVID-19 pandemic on our plans to grow our business over the long term including on the ability of our listed issuers to raise capital.
While we anticipate that subsequent events and developments may cause our views to change, we have no intention to update this forward-looking information, except as required by applicable securities law. This forward-looking information should not be relied upon as representing our views as of any date subsequent to the date of this press release. We have attempted to identify important factors that could cause actual actions, events or results to differ materially from those current expectations described in forward-looking information. However, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended and that could cause actual actions, events or results to differ materially from current expectations. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. These factors are not intended to represent a complete list of the factors that could affect us. A description of the above-mentioned items is contained in the section "Enterprise Risk Management" of our 2021 Annual MD&A.
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Audio Replay: 416-764-8677 or 1-888-390-0541
The pass code for the replay is 116483.
Consolidated Balance Sheets
(In millions of Canadian dollars) | ||||
(Unaudited) | ||||
Assets | ||||
Current Assets: | ||||
Cash and cash equivalents | $ | 264.3 | $ | 222.1 |
Restricted cash and cash equivalents | 180.0 | 153.3 | ||
Marketable securities | 77.3 | 55.8 | ||
Trade and other receivables | 132.6 | 108.0 | ||
Balances of Participants and Clearing Members | 57,113.5 | 30,270.4 | ||
Other current assets | 32.6 | 29.9 | ||
Total Current Assets | 57,800.3 | 30,839.5 | ||
Non-Current assets: | ||||
5,156.9 | 5,047.7 | |||
Right-of-use assets | 84.3 | 82.1 | ||
Deferred income tax assets | 24.7 | 22.5 | ||
Other non-current assets | 133.2 | 106.8 | ||
Total Non-Current Assets | $ | 5,399.1 | $ | 5,259.1 |
Total Assets | $ | 63,199.4 | $ | 36,098.6 |
Liabilities and Equity | ||||
Current Liabilities: | ||||
Trade and other payables | $ | 152.8 | $ | 132.4 |
Participants' tax withholdings | 180.0 | 153.3 | ||
Balances of Participants and Clearing Members | 57,113.5 | 30,270.4 | ||
Debt | — | 160.0 | ||
Credit and liquidity facilities drawn | 2.0 | 4.3 | ||
Other current liabilities | 70.7 | 60.7 | ||
Total Current Liabilities | 57,519.0 | 30,781.1 | ||
Non-Current liabilities: | ||||
Debt | 997.1 | 747.5 | ||
Lease liabilities | 88.3 | 86.2 | ||
Deferred income tax liabilities | 844.9 | 805.1 | ||
Other non-current liabilities | 44.0 | 67.2 | ||
Total Non-Current Liabilities | 1,974.3 | 1,706.0 | ||
Total Liabilities | 59,493.3 | 32,487.1 | ||
Equity: | ||||
Share capital | 2,875.8 | 2,943.6 | ||
Contributed surplus | 11.8 | 11.1 | ||
Retained earnings | 817.1 | 636.2 | ||
Accumulated other comprehensive income | 1.4 | 20.6 | ||
Total Equity | 3,706.1 | 3,611.5 | ||
Total Liabilities and Equity | $ | 63,199.4 | $ | 36,098.6 |
Consolidated Income Statements
(In millions of Canadian dollars, except per share | For the three months ended | For the year ended | ||||||
(Unaudited) | 2021 | 2020 | 2021 | 2020 | ||||
Revenue | $ | 252.4 | $ | 219.5 | $ | 980.7 | $ | 865.1 |
REPO and collateral interest: | ||||||||
Interest income | 21.1 | 18.5 | 53.9 | 160.6 | ||||
Interest expense | (21.1) | (18.5) | (53.9) | (160.6) | ||||
Net REPO and collateral interest | — | — | — | — | ||||
Total revenue | 252.4 | 219.5 | 980.7 | 865.1 | ||||
Compensation and benefits | 68.0 | 58.2 | 253.5 | 226.6 | ||||
Information and trading systems | 19.4 | 17.7 | 64.6 | 57.6 | ||||
Selling, general and administration | 25.8 | 16.9 | 84.3 | 84.7 | ||||
Depreciation and amortization | 23.0 | 20.6 | 87.1 | 80.3 | ||||
Total operating expenses | 136.2 | 113.4 | 489.5 | 449.2 | ||||
Income from operations | 116.2 | 106.1 | 491.2 | 415.9 | ||||
Share of income from equity accounted investees | 5.8 | (0.9) | 24.2 | 5.7 | ||||
Net finance costs | (9.0) | (8.0) | (36.1) | (32.8) | ||||
Income before income tax expense | 113.0 | 97.2 | 479.3 | 388.8 | ||||
Income tax expense | 25.1 | 25.4 | 140.8 | 109.1 | ||||
Net income | $ | 87.9 | $ | 71.8 | $ | 338.5 | $ | 279.7 |
Earnings per share: | ||||||||
Basic | $ | 1.57 | $ | 1.27 | $ | 6.03 | $ | 4.96 |
Diluted | $ | 1.56 | $ | 1.26 | $ | 5.99 | $ | 4.91 |
Consolidated Statements of Comprehensive Income
(In millions of Canadian dollars) | For the three months ended | For the year ended | ||||||
(Unaudited) | 2021 | 2020 | 2021 | 2020 | ||||
Net income | $ | 87.9 | $ | 71.8 | $ | 338.5 | $ | 279.7 |
Other comprehensive income (loss): | ||||||||
Items that will not be reclassified to the consolidated income statements: | ||||||||
Actuarial gain (loss) on defined benefit pension and other | 3.2 | 0.3 | 11.3 | (2.8) | ||||
Total items that will not be reclassified to the consolidated income statements | 3.2 | 0.3 | 11.3 | (2.8) | ||||
Items that may be reclassified subsequently to the | ||||||||
Unrealized (loss) gain on translating financial statements of | 0.3 | 9.9 | (19.2) | 11.6 | ||||
Total items that may be reclassified subsequently to the | 0.3 | 9.9 | (19.2) | 11.6 | ||||
Total comprehensive income | $ | 91.4 | $ | 82.0 | $ | 330.6 | $ | 288.5 |
Consolidated Statements of Changes in Equity
(In millions of Canadian dollars) | ||||||||||
(Unaudited) | For the year ended | |||||||||
Share capital | Contributed | Accumulated | Retained | Total equity | ||||||
Balance at | $ | 2,943.6 | $ | 11.1 | $ | 20.6 | $ | 636.2 | $ | 3,611.5 |
Net income | — | — | — | 338.5 | 338.5 | |||||
Other comprehensive (loss) income: | ||||||||||
Unrealized loss on translating financial | — | — | (19.2) | — | (19.2) | |||||
Actuarial gain on defined benefit pension and | — | — | — | 11.3 | 11.3 | |||||
Total comprehensive (loss) income | — | — | (19.2) | 349.8 | 330.6 | |||||
Dividends to equity holders | — | — | — | (168.9) | (168.9) | |||||
Proceeds from exercised share options | 15.1 | — | — | — | 15.1 | |||||
Cost of exercised share options | 1.5 | (1.5) | — | — | — | |||||
Cost of share option plan | — | 2.2 | — | — | 2.2 | |||||
Shares repurchased under normal course | (84.4) | — | — | — | (84.4) | |||||
Balance at | $ | 2,875.8 | $ | 11.8 | $ | 1.4 | $ | 817.1 | $ | 3,706.1 |
Consolidated Statements of Changes in Equity
(In millions of Canadian dollars) | ||||||||||
(Unaudited) | For the year ended | |||||||||
Share capital | Contributed | Accumulated | Retained | Total equity | ||||||
Balance at | $ | 2,965.1 | $ | 12.1 | $ | 9.0 | $ | 512.9 | $ | 3,499.1 |
Net income | — | — | — | 279.7 | 279.7 | |||||
Other comprehensive income (loss): | ||||||||||
Unrealized gain on translating financial | — | — | 11.6 | — | 11.6 | |||||
Actuarial loss on defined benefit pension and | — | — | — | (2.8) | (2.8) | |||||
Total comprehensive income (loss) | — | — | 11.6 | 276.9 | 288.5 | |||||
Dividends to equity holders | — | — | — | (153.6) | (153.6) | |||||
Proceeds from exercised share options | 31.7 | — | — | — | 31.7 | |||||
Cost of exercised share options | 3.6 | (3.6) | — | — | — | |||||
Cost of share option plan | — | 2.6 | — | — | 2.6 | |||||
Shares repurchased under normal course | (56.8) | — | — | — | (56.8) | |||||
Balance at | $ | 2,943.6 | $ | 11.1 | $ | 20.6 | $ | 636.2 | $ | 3,611.5 |
Consolidated Statements of Cash Flows
(In millions of Canadian dollars) | For the three months ended | For the year ended | ||||||
(Unaudited) | 2021 | 2020 | 2021 | 2020 | ||||
Cash flows from (used in) operating activities: | ||||||||
Income before income taxes | $ | 113.0 | $ | 97.2 | $ | 479.3 | $ | 388.8 |
Adjustments to determine net cash flows: | ||||||||
Depreciation and amortization | 23.0 | 20.6 | 87.1 | 80.3 | ||||
Net finance costs | 9.0 | 8.0 | 36.1 | 32.8 | ||||
Share of (income) loss from equity accounted investees | (5.8) | 0.9 | (24.2) | (5.7) | ||||
Cost of share option plan | 0.7 | 0.4 | 2.2 | 2.6 | ||||
Unrealized foreign exchange (gain) loss | (0.1) | 0.5 | (0.4) | 0.9 | ||||
Changes in: | ||||||||
Trade and other receivables, and prepaid expenses | (14.5) | (8.9) | (19.7) | (4.0) | ||||
Trade and other payables | 28.0 | 27.2 | 4.8 | 17.4 | ||||
Provisions | (0.4) | (1.1) | (0.6) | (6.9) | ||||
Deferred revenue | (22.3) | (14.0) | 7.6 | 1.4 | ||||
Other assets and liabilities | (1.9) | (8.3) | (16.2) | 3.1 | ||||
Income taxes paid | (25.7) | (21.9) | (114.6) | (98.5) | ||||
103.0 | 100.6 | 441.4 | 412.2 | |||||
Cash flows from (used in) financing activities: | ||||||||
Interest paid | (15.1) | (15.1) | (34.6) | (33.9) | ||||
Repayment of lease liabilities | (2.3) | (2.1) | (8.4) | (8.3) | ||||
Proceeds from exercised options | 0.1 | 1.7 | 15.1 | 31.7 | ||||
Shares repurchased under normal course issuer bid | (18.6) | (42.1) | (84.4) | — | ||||
Dividends paid to equity holders | (43.1) | (39.6) | (168.9) | (153.6) | ||||
Net movement of Commercial Paper | — | (9.0) | (160.0) | (79.6) | ||||
Credit and liquidity facilities drawn, net | (9.5) | (17.7) | (2.3) | (3.9) | ||||
(88.5) | (123.9) | (194.8) | (304.4) | |||||
Cash flows from (used in) investing activities: | ||||||||
Interest received | 0.4 | 0.4 | 1.5 | 2.3 | ||||
Dividends received | — | — | 5.7 | 5.4 | ||||
Additions to premises and equipment and intangible assets | (11.2) | (22.7) | (51.2) | (67.1) | ||||
Acquisition of subsidiary, net of cash | — | — | (138.4) | — | ||||
Marketable securities, net | 0.1 | (7.8) | (21.5) | 24.6 | ||||
(10.7) | (30.1) | (203.9) | (34.8) | |||||
Increase (decrease) in cash and cash equivalents | 3.8 | (53.4) | 42.7 | 73.0 | ||||
Cash and cash equivalents, beginning of the period | 260.5 | 275.5 | 222.1 | 149.0 | ||||
Unrealized foreign exchange (loss) gain on cash and cash | — | — | (0.5) | 0.1 | ||||
Cash and cash equivalents, end of the period | $ | 264.3 | $ | 222.1 | $ | 264.3 | $ | 222.1 |
SOURCE
© Canada Newswire, source