CME Group Inc.

Hello and welcome to CME Group third quarter 2022 earnings call. My name is Sarah and I will be your coordinator for today's event. Please note this conference is being recorded and for the duration of the call, your lines will be on listen only. However, you will have the opportunity to ask questions. This can be done by pressing star one on your telephone keypad to register your question. If you require assistance at any point, please press star zero and you will be connected to an operator. I will now hand you over to your host, John Pescher, to begin today's conference. Thank you.

Good morning, and I hope you all are doing well today. I'm going to start with a safe harbor language, then I'll turn over to Terry and team for brief remarks, followed by your questions. Other members of our management team will also participate in the Q&A session. 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 measure. On a personal note, Today will be my last earnings call as I am retiring after more than 20 years with CME. My first day on the job was December 24th of 2001 with a plan that CME would go public soon after I joined. CME ultimately went public in December of 2002 and it has been an amazing journey. We have created a lot of value for our investor. I want to thank all of our shareholders and sell side analysts who I've met on this journey. And I want to thank all my CME colleagues I have worked with closely with during the last two decades. In particular, the CFOs Dave, Jamie, and John. Most importantly, Jennifer and George and Susan Jacks, with whom I have worked closely with for many years, have been instrumental to our success. Lastly, I'd like to thank Terry for his leadership of this successful journey. He and I are the only ones left. We're on the first CME earnings call in 2003, and it's been a great run. With that, I will turn it over to Terry.

Well, thank you all for joining us this morning, and let me take a quick moment first to thank you, John, on behalf of all of us for an incredible run, more than two decades, as you said, with CME and giving service to the organization and its shareholder relations organization. You have been an instrumental force in our investor relations and analyst outreach, helping us grow from our early days, as you said, as a public company to the leading derivatives marketplace we have become today. As a friend and respected colleague to so many, you've made a significant impact on our business. There is no doubt you'll be missed. We wish you nothing but the best for you and your family going forward. And, again, on behalf of everybody at CME and throughout the investor community, John, we thank you very much for your leadership. Thank you. Thank you. We are leaving the investment community in good hands with the remaining members of the investor relations team, as John referenced, Jennifer George and Susan Jacks, who have worked side by side with John through his entire career, as well as Adam Minnick, who you'll all get to know soon, who recently joined the investor relations department coming over from our strategy department. So we look forward to all of you meeting up with Adam. We released our executive commentary earlier today, which provided extensive details on the third quarter of 2022. I have John Lin, Sean, Derek, Sunil, and Julie Winkler on the call this morning, as well as Tim McCourt, our global head of equity and FX products. I felt it was important to take some time to not only run through a snapshot of our current business and financial results, but more importantly, to expand on why we feel our business is in such a strong position to finish out the year and head into 2023 on a high note. I will start, and then Sean, Tim, and Derek will provide some thoughts before John finishes up our commentary with details related to our financial results and our JV. Then, we will open the call for your questions. Let me start by talking about the tremendous amount of uncertainty in the markets today. whether that be uncertainty around the US Federal Reserve policy, varying views about the recession risk with inflation at levels not seen since the 1980s, or uncertainty around the size and speed of the unwind of the Fed's balance sheet. When there is uncertainty driving activity in our interest rate business, the impacts cascade to other asset classes, most prominently in equities. as rate changes impact corporate valuation and in foreign exchange with varied policies and approaches from central banks around the world. We're also seeing high level of volatility in the commodities markets, which appear likely to persist given the impact of the Russian invasion in Ukraine and the resulting disruption affecting both agriculture and energy markets in the region and around the world. Risk management is our business, and we have been and always will be committed to helping our customers manage uncertainty. We do this across our unique breadth of asset classes and our broad range of deeply liquid, globally relevant products. With that being said, let me transition into our Q3 performance. Our performance for Q3 and year-to-date in 2022 highlights the effectiveness of our risk management solutions. Our volume is up 23% year-to-date versus the same period last year, and up 19% from the same period in 2019 prior to the pandemic. The highest average daily volume quarter in CME Group's history was Q1 of 2020, when risk management was critical at the onset of the pandemic. The first three quarters of this year have been the second, third, and fourth highest ADV quarters in our history. So far in 2022, our interest rates, equities, and FX products have hit peak levels of large open interest holders, with our interest rate products at an all-time high again, just last week suggesting that this represents a risk on environment. Additionally, Q3 represented our fifth sequential quarter of double-digit year-over-year growth in total ADV. With the pandemic becoming part of our lives, global economics and market participants are left to manage not only uncertain market risk, but also potential new risk associated with the pandemic. We're pleased the next integration is complete and market participants are able to access cash treasuries and cash foreign exchange through one platform, complementing our existing futures on treasuries and on foreign exchange. The breadth of the assets we've built over time, combined with the work we are currently doing in partnership with Google to transform markets, will provide us further opportunity to continue our industry-leading innovation going forward. And we are 100% focused on growing in the short term while also positioning the business for long-term sustained growth. I'll now turn it over to Sean and then Tim and Derek to dig into more detail around these things.