CME Group Inc.

Good day and welcome to the CME Group Third Quarter 2021 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to John Pescher. Please go ahead, sir.

Thank you and good morning, everyone. I hope you're all doing well. I'm going to start with a safe harbor language, then I'll turn it over to Terry and our team for brief remarks, followed by your questions. Statements made on this call and in the other reference documents on our website that are not historical facts are forward-looking statements. These statements are not guarantees of future performance. They involve risks, uncertainties, and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or implied in any statement. Detailed information about factors that may affect our performance can be found in the filings with the SEC, which are on our website. Lastly, on the final page of the earnings release, you will see a reconciliation between GAAP and non-GAAP measures. With that, I'd like to turn the call over to Terry.

Thank you, John, and thank you all for joining us this morning. We released our executive summary, as John says, which provided extensive details on the third quarter of 2021. I have John, Sean, Derek, Sunil, Julie Winkler on the call this morning, and we all look forward to addressing any questions you have. Before I begin, in addition to John, who will discuss the financial results, I'm going to have Sean and Derek make some comments. With all the recent news associated with interest rates and energy, I thought it was important that they present this morning. With that, we delivered solid volume during the third quarter of this year as we averaged 17.8 million contracts per day, which was up 14% versus third quarter last year. We saw year-over-year strength in our interest rates and energy businesses and saw significant options growth of 45% during Q3 2020. Rates to average daily volume rose 53%, including 78% growth in euro dollars and 41% growth in treasuries, as the expectations of future rate hikes has increased. We continue to launch innovative new products, tools, and services to support customer needs, including additions to our suite of micro-sized contracts that allow market users to customize their trading and hedging. as well as ESG-focused futures contracts that help manage climate-related risk. In terms of specific products and services, we had two consecutive quarterly ADB records in SOFR futures in Q2 and Q3, as the market continues to manage their interest rate risk ahead of key transition deadlines. Bitcoin futures ADB increased 170% compared with the third quarter last year, Ether futures are also off to a good start since their launch in the first quarter this year. In September, we launched the derivatives industry's first ever sustainable clearing service to help market participants track and report on how their hedging activities are advancing their sustainable goals. Finally, micro WTI and micro treasury yield contracts began trading in July and August respectively. The Micro WTI contract represents the most successful commodity product launch in our history, with over 1 million contracts traded within the first 20 days and a total of 4.3 million contracts traded since July 12th launch. Most importantly, this innovative new contract is attracting new customers to our energy market, as evidenced by the fact that almost 10,000 micro WTI market participants have not traded any other CME Group crude oil product in 2021. You'll hear more about this in a moment from both Derek and Sean, respectively. In the third quarter, non-US ADB was up 13% to 5 million contracts per day. We saw 15% growth in Europe, 8% growth in Asia, 32% growth in Latin America, and 10% growth in the U.S. Also during the quarter, we completed our joint venture with IHS Market and together launched Ostrock, a leading provider of progressive post-trade solutions for the global OTC market across interest rates, equities, FX, and credit asset classes. Turning to Q4, we have had a strong start so far in October, averaging more than 20 million contracts, which is an increase of 35% month-to-date compared to the same point in October last year. Interest rates and energy are up double digits, with rates up 90%. With that, let me turn it over to Sean to give you more flavor as it relates to interest rates.