BGC Partners, Inc.

Hello everyone and thank you for your patience. The call is due to begin in two minutes time. © transcript Emily Beynon Welcome to the BGC Partners Inc fourth quarter and full year 2021 earnings conference call. At this time, all participants are in listen only mode. After the speaker's presentation, there will be a question and answer session. Please be advised that today's conference call is being recorded. I would like to hand over the conference to your speaker today, Jason Crucisus, Head of Investor Relations. Thank you, and please go ahead.

Good morning, everyone. We issued BGC's fourth quarter and full year 2021 financial results, press release, and presentation summarizing these results earlier this morning. You can find these at ir.bgcpartners.com. Please note you can find additional details on our quarterly results in today's press release and investor presentation. Unless otherwise stated, the results provided on today's call compare only the fourth quarter of 2021 with the prior year period and compare revenue excluding insurance due to its sale on November 1st, 2021. We will be referring to our results on this call only on an adjusted earnings basis unless otherwise stated. We may also refer to adjusted EBITDA. We may refer to our liquidity, which we define as cash and cash equivalents plus marketable securities that have not been financed, reverse repurchase agreements and securities owned, less loaned and repurchase agreements. We define total capital as redeemable partnership interest, total stockholders' equity, and non-controlling interest in subsidiaries. Please see today's press release for results under generally accepted accounting principles or GAAP. Please also see the relevant sections in the back of today's press release for the complete and updated definitions of any non-GAAP terms, reconciliations of these items to the corresponding GAAP results, and how, when, and why management uses such terms. Additional information with respect to our GAAP and non-GAAP results mentioned on today's call is available on our website at ir.btcpartners.com and in our investor presentation. We refer to the company's technology-driven businesses as FENIX, Fenix offerings include Fenix markets and Fenix growth platforms. I also remind you that the information regarding our business on today's call that are not historical are forward-looking statements. These include statements about the effects of COVID-19 pandemic on the company's business, results, financial position, liquidity, and outlook. Any forward-looking statements involve risks and uncertainties. And except as required by law, BGC undertakes no obligation to update any forward-looking statements. Any outlook and targets discussed on this call assume no material acquisitions, buybacks, extraordinary transactions, or meaningful changes to the company's stock price. For discussion of additional risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see BGC's SEC filings, including but not limited to the risk factors in special note on forward-looking information set forth in these filings, and any updates to such risk factors in special note on forward-looking information contained in the subsequent reports on Form 10-K, Form 10-Q, or Form 8K. With that, I'm now happy to turn the call over to Howard Lutnick, Chairman of the Board and CEO of BGC Partners.

Thank you, Jason. Good morning, and thank you for joining us for our fourth quarter and full year 2021 conference call. With me today are BGC's Chief Financial Officers, Steve Diskay, and our Chief Operating Officers, Sean Mendiatt. BGC improved profitability across all metrics in 2021, Additionally, we executed numerous value-unlocking initiatives, including selling our insurance brokerage business for $535 million, reducing our share count by over 10%, and expanding Fenix USP's market share by nearly 600 basis points to over 20%. Leveraging Fenix USP's success, after consulting with our global clients and strategic partners, we are pleased to announce the expansion of the scope of FMX Futures to cover the entire U.S. rates futures complex. U.S. Treasury futures, Euro dollars, and silver futures will launch concurrently in the fourth quarter of 2022. We recently launched a number of crypto products and expect to have a comprehensive offering by the end of this year. Our crypto platform is powered by our multi-billion dollar global infrastructure and state-of-the-art FedEx trading technology. Our futures exchange was amongst the first exchanges permitted to lift crypto derivatives, an advantage we plan to leverage as we scale our cryptocurrency offerings. As you know, we completed the sale of our insurance brokerage business on November 1st, bringing in gross proceeds of $535 million. Since we announced the sale on May 26th, we have repurchased and redeemed 71.5 million shares and units, reducing our fully diluted share count by over 10%. We continue to grow our technology driven higher margin FedEx business at an industry leading pace of 26%, so over $400 million for the full year 2021. For the fourth quarter, FedEx net revenue improved by 20% compared to the prior year, which represents a record 23% of BGC's total revenue, excluding insurance, of course. We expect FedEx to exceed a quarter of BGC's total revenues in 2022. FedEx revenue growth was a key factor in driving front office productivity 10% higher during the quarter, improving post-tax adjusted earnings by 20%, and expanding margins by 370 basis points. I'd like to take a moment to update you on my health. As many of you know, I was diagnosed in the fall with non-Hodgkin's lymphoma. I'm happy to report that I've completed chemotherapy on January 31st, but in mid-December, I had a very positive PET scan where the cancer was 95% resolved, and it made my doctors and me very, very happy. I have my final PET scan scheduled in March, and I look forward to updating you then. If you would like more details, my most recent video update is provided both on our website, on Rumble, or on YouTube. With that, I'd like to turn the call over to Steve Diskay.