TMX Group Limited (X) Earnings Call Transcript & Summary

Thank you. Good afternoon, ladies and gentlemen. My name is Chuck Winograd. I am the Chair of the Board of Directors of TMX Group Limited. As prescribed by our bylaws, I will preside as Chair of this annual and special Meeting of TMX Group shareholders. John McKenzie, the Chief Executive Officer; Frank Di Liso, the Interim Chief Financial Officer; and Cheryl Graden, the Chief Legal and Enterprise Corporate Affairs Officer and Corporate Secretary, joining me on the webcast this afternoon. Also joining us remotely are my fellow directors, members of senior management and our auditor, KPMG LLP. I would like to welcome everyone who has joined us this afternoon. We are pleased to be able to connect with so many of you today. In order to mitigate risks to the health and safety of our communities, shareholders, employees and other stakeholders due to COVID-19 pandemic, we have decided once again to hold our meeting in a virtual-only format. Our goal is to ensure that you are able to participate fully in the meeting, and we have strived to emulate our usual meeting structure as much as we could. I invite you to vote on each of the matters of business and to ask questions. I now formally call the meeting to order and with the consent of the meeting, request Cheryl Graden to act as secretary of the meeting and to respond to any questions during the meeting regarding procedural matters. Our annual and special meeting is available in a virtual-only format to shareholders and proxy holders who have logged into the Lumi web platform with their control numbers. [Operator Instructions] Our corporate Secretary, Cheryl Graden will receive all questions submitted. I encourage you to submit your questions as early as possible so that we may address them at the right moment during the meeting. We would ask that questions or comments submitted online be related to the matters currently before the meeting, and we will do our best to respond to all of your questions during the meeting. If there are questions pertinent to meeting matters that are unanswered this afternoon, due to time constraints, management will post answers to a representative set of such questions online. Members of the media are permitted to attend this meeting. However, they may not participate in the meeting. Following the meeting, members of the media may reach out to Shane Quinn, Head of Corporate Communications and Public Affairs, or Catherine Kee, Senior Manager of Corporate Communications and Media Relations with any questions for John McKenzie or Frank Di Liso. Pursuant to a resolution of the Board, I appoint TSX Trust Company by its representative, Steven Nguyen, to act as scrutineer of the meeting. The scrutineer will report on the number of voting shares represented in person or by proxy at this meeting and will compute the votes on the online ballots taken. Before proceeding further, I would like to say a few words about the shareholders who have signed and delivered proxies for the meeting. Only registered shareholders who held shares on March 16, 2021, and those persons appointed as proxies for shareholders are entitled to vote and participate at this meeting. Registered shareholders and duly appointed proxy holders who have not voted and wish to vote during the meeting may vote live throughout the meeting until voting is closed. The matters to be dealt with at this meeting include: the reappointment of the corporation's auditor, the election of directors for the coming year, the approval of an advisory -- on an advisory basis of our approach to executive compensation, and to consider the shareholders' proposal submitted by the Atkinson Foundation as amended on April 22, 2021. All of these matters have been set out in the notice of annual and special meeting, and then the management information circular made available to all shareholders in advance of the meeting. Now I'd like to advance to the formal business of the meeting. I'd like to take a few moments this afternoon to reflect upon the past year at TMX Group. Without question, 2020 was a year of unprecedented cap challenges. The COVID-19 pandemic had a profound impact on the way we live and on the economy and markets here in Canada and across the world. As we continue to navigate through the challenges posed by the pandemic in 2021, TMX Group priorities remain firmly in place. The safety and well-being of our employees and their family and providing responsive and resilient markets to serve the needs of our various clients and stakeholders. TMX Group delivered positive financial results in 2020 against backdrop of prevailing uncertainty in our operating environment. Strong and volatile equity markets, corporations hungry for capital and the return of a very healthy IPO market all provided tailwinds for our industry this year. The company's strong performance is a testament to our diversified and stress-tested business model, the balanced strength of each of our business areas and the steadfast commitment of our people to remain closely connected to our stakeholders and clients while working remotely. On behalf of the Board of Directors, I want to thank all of our employees through the dedicated efforts and tremendous accomplishments over the past year. In August 2020, following an extensive and expansive search process, we were delighted to announce the appointment of John McKenzie as Chief Executive Officer of the TMX Group. John's proven leadership abilities, business acumen and vision for the best for the organization made him the best candidate for the role and the best fit for the TMX Group. The Board has the utmost confidence that he and his senior management team are well suited to execute our next phase of our corporate strategy. The company continues to evolve in important ways to anticipate and adapt to the meanings of the modern marketplace. Later today, we will be publishing our company's 2021 ESG report, highlighting the important progress we've made in our sustainability journey over the past year as we work to integrate ESG objectives into our corporate strategy, business processes and investment decisions. In closing, I want to thank our fellow board members for their steadfast commitment to our strategic vision. And on behalf of all shareholders, I'd like to thank retiring directors, Christian Exshaw, Harry Jaako, Jean Martel and Gerri Sinclair for their many, many contributions to the Board and its committees over the years. We're going to miss their guidance. In 2020, we welcome 3 new additions to the Board. Moe Kermani and Claude Tessier as well as John McKenzie. And today, we're pleased to nominate Audrey Mascarenhas, our fourth new director in the past 12 months. The 12 nominees to this year and forward have the right mix of skills and experience to guide the strategies and business operations of the TMX Group. I look forward to working with them as we enter the next exciting chapter in our history. Thank you very much. I will now ask John McKenzie to make some remarks.

Well, thank you, Chuck, and good afternoon, everyone. Thank you for attending today's meeting. On behalf of all of us at TMX, I want to wish the best of health to you and your families. And before I begin my remarks, I want to send out sincere thanks to all of the brave people in the front lines in our communities, fighting to save lives and contain the impact of the current wave of the COVID-19 crisis. We all owe a massive debt of gratitude to health care workers, first responders and volunteers providing critical care, essential services and support to those in need. My wishes for everyone listening this afternoon is that spring 2021 brings a sense of hope and renewal as we move closer to a return towards normalcy. And as Chuck said, by necessity, this is TMX Group's second virtual shareholder meeting. And while it certainly can feel as if our world is stuck in a holding pattern, the pace of evolution in our industry and operating environment has not slowed in the last 12 months. And anything, in fact, the pace of change has quite accelerated. The capital markets are thriving. And for TMX people, the amount of work has only increased. So I'd like to acknowledge the fantastic efforts of our dedicated employees in Canada and around the world to meet the demands of a busy market and the increased workload that comes along with it during this pandemic. The performance of our markets in 2020 and thus far into 2021 stands as proof positive of the enduring spirit of ingenuity and entrepreneurship in Canada and around the world. The ability of TMX's equity exchanges to perform our critical function, providing issuers and investors access to capital, proved a vital and stabilizing force in the nation's economy during a supremely challenging year. And we are grateful to our entire stakeholder community, including participants and issuers, regulators and competitors for their partnership in keeping Canada's markets functioning efficiently. Our markets are amongst the best in the world. They are fair and transparent, liquid and competitive and feature a diverse and deep set of great companies and investment opportunities. And we continue to build on a track record of innovation and Canada's global reputation as a proven ground for cutting-edge companies and investment vehicles. And as we look forward, as we all certainly do these days to a post-pandemic world, I am confident that Canada's capital markets will play a key role in the country's economic recovery. So I'm going to focus my opening comments this afternoon on TMX's business performance in 2020. And later, provide an update on the important progress we have made in initiatives across our key strategic growth areas. I will close by outlining some recent steps we have taken to strengthen the organization that propel us to future success. As any period in our history, TMX Group's 2020 performance highlights service compelling evidence of the benefits of our diversification strategy and the intrinsic strength of our stress-tested business model. Revenue for the full year in 2020 was $865.1 million, an increase of 7% from 2019, and earnings per share was up 12% or 11% on an adjusted basis. Year-over-year growth was driven by increased revenue from equities and fixed income trading and clearing, Trayport and capital formation and slightly offset by lower revenue from our Derivatives franchise. Operating expenses were up 6% from 2019, largely due to net litigation settlement costs of $12.4 million occurred in Q2 of 2020 and also higher costs related to our short-term employee performance incentive plan, given the strength of TMX's performance throughout the year. Taking a closer look now at our business areas. Revenue from Equities and Fixed Income Trading was $127 million in 2020, up 30% compared to 2019, driven by significantly higher activity. Equity markets surged in early 2020 and remained robust throughout the year. In fact, 2020 was the second most active year in Toronto Stock Exchange history in terms of volumes, with over 115 billion securities traded, trailing only 2009. And on a combined basis, volume on our equity markets, including Toronto Stock Exchange, TSX Venture Exchange and Alpha were up 42% compared to the previous year. And within the numbers, we're seeing specific investor interest in technology and life sciences as well as the resource sector and a surge in volumes from retail investors. The proportion of retail trading in Canada increased in 2020, reaching peak levels as high as 43% of total TMX volume traded in July and December 2020 when compared with an average of about 35% the year before. And in the first quarter of this year, retail participation levels reached an average of 46%, with a peak of 48% in February. In Canada and for the TMX, the importance of a growing retail segment of our marketplace ecosystem extends beyond the new cycle of mean stocks that occurred in the U.S. in February. This increase in retail investing as a proportion of our trading volumes represents a meaningful shift in a development that we have been tracking closely over time. And while 2020 proved a demanding year, our equities team advanced on key initiatives designed to enhance the trading experience for our broad client base. TSX DRK, Canada's fastest-growing DRK pool continued to expand its client offering and move forward in a client engagement strategy with the launch of a liquidity program in July 2020. And in October of last year, we announced amendments to our market on close or MOC facility, a call market used to set the official closing price for eligible TSX and selected TSX Venture listed issuers. Client response has been tremendously positive and the launch is on track for this fall. On our Capital Formation business, revenue was $189 million in 2020, up 5% from 2019 and primarily driven by increased revenue from additional listing fees on both TSX and TSX Venture. And the 2020 performance of our Capital Formation business is a strong proof of the efficacy of our ecosystem and illustrates the fundamental role of a healthy public markets play in maintaining the viability and vitality of the Canadian economy. Companies turn to our markets to access the capital they needed to keep their businesses running, their growth objectives on track and their people employed. And the story continued to gain momentum into Q1 of this year. In fact, Toronto Stock Exchange and TSX Venture Exchange had the best first quarter in 15 years, with over $20 billion in capital raised by our issuers and 19 corporate IPOs in the first 3 months of the year. And TMX continues to fortify our reputation as a premier destination for cutting-edge companies in all stages of maturity from all regions of the world to access capital. In less than 5 years, the TSX and TSX Venture innovation sector made up of clean tech, life sciences and technology companies has more than tripled in size. And at the end of the first quarter of this year, the sector topped $500 billion in total market capitalization, surpassing the mining sector for the first time ever. And our innovation indices continue to be among the top-performing indices around the world. Q1 featured some important milestones as well. TELUS International raised $1.4 billion in the largest tech IPO in Toronto Stock Exchange history when they joined our market in February. And Toronto Stock Exchange, home to the world's first ETFs back in 1990, launched the world's first publicly listed Bitcoin and Ether ETFs in the quarter. Now turning to Derivatives. Revenue from Derivatives Trading and Clearing business was $126.2 million in 2020, a decrease of 5% from 2019, driven by lower revenue from MX and CDCC and from BOX. And while overall MX volumes in 2020 were flat year-over-year, revenue was down slightly due to an unfavorable product mix. The historically low interest rate environment had a negative impact on volumes in some of Montreal Exchange's key products, particularly short-term interest rate contracts during 2020 and into the first quarter of 2021, where we are seeing some important signs of growth within the numbers. Recently, including momentum in our single share features, higher volume in equity and ETF options and increased overall open interest. MX also plans to launch our Asian extended hours initiative in the second half of 2021, and we have seen strong engagement from investors and participants in the region to date. Our team is in the process of obtaining regulatory approvals and working with regulators and all stakeholders to ensure the industry is prepared for this implementation. Now turning to Trayport. Revenue at Trayport was $136.7 million in 2020, an increase of 14% from 2019. Volumes in the European power and gas markets were up 10% and 14%, respectively, over 2019. In addition to the strong performance of Trayport's core business, we continue to see positive results from expansion initiatives in the evolving global energy landscaping, including liquid natural gas, algorithm power trading and refined oil now. Now I'd like to close my comments today with a brief update on TMX's growth strategy. While so much has changed in our operating environment and the world around us since we first laid out our roadmap for growth in 2018, TMX remains firmly committed to executing our long-term strategic growth strategy centered around 4 priority areas. The first, growth acceleration. We continue to pursue opportunities to position TMX competitively in chosen areas of high growth potential, including our globally unique TSX Venture Exchange model, Derivatives, Trayport and Data Analytics. The second priority area is talent and culture. And as the world emerges from the grips of COVID-19 and our industry prepares for the post-pandemic operating environment, TMX is dedicated to building back stronger. We are so fortunate to have great people at TMX. And over the past year, we have taken significant steps forward in TMX's evolution as a public company and to further enhance our talent and culture. Enhancing diversity and inclusion at TMX is a priority focus, and we recently completed a self identification survey of employees and appointed an ED&I counsel to review and explore the results of that survey. Under my direction, TMX Group's ED&I counsel will be accountable for determining our overall holistic approach to diversity and our inclusion strategy. The strategy will include cultural education, unconscious bias training, measurable success metrics, inclusion monitoring and reviewing processes and policies in critical areas from vendor requirements to human resource practices like recruitment and promotions. Our third priority area is public advocacy for better markets. As the global capital market industry evolves, TMX has had an important role to play in advocating for measures to ensure that not only does Canada remain competitive on the world stage, but that we elevate the status of our markets to a global leadership position. And our fourth and key priority, our final priority area is to focus on continuing to advance sustainability and ESG. As Chuck mentioned earlier, today marks the issuance of our second annual ESG report. The report, which will be available on our website under Investor Relations, details the progress we have made in our sustainability journey over the past year as we work to integrate environmental, social and governance objectives into our corporate strategy, processes and decisions. And the report also outlines TMX's active role in positioning Canada as a world-leading marketplace for sustainable investment in finance, empowering clients to become ESG leaders in their own right through educational tools, products and services. Now before I turn the meeting back to Chuck, I would like to add some context around a shareholder proposal that TMX received ahead of today's shareholder meeting from the Atkinson Foundation related to indigenous communities. You will note that in our management information circular, TMX's Group Board of Directors recommend that shareholders originally vote against the proposal. However, in the weeks since the circular has published, we've had a number of positive and productive discussions with the Atkinson Foundation and its representative share. And as I stated a moment ago, enhancing diversity, equity and inclusion at TMX is a priority focus. We recognize that more needs to be done to improve representation for all underrepresented groups, including indigenous persons across corporate Canada. And I am pleased to advise that we were able to agree upon an amended proposal that we are recommending shareholders vote for this amended proposal, and we look forward to providing you with updates in the month ahead -- months ahead. And finally, I want to update you on a pending addition to our senior management team and a word of thanks. Last month, following an extension search process, we were pleased to name David Arnold as TMX Group's new Chief Financial Officer effective June 1, 2021. David joins us from CIBC where he served in various roles over 20 years, most recently being the Executive Vice President for Enterprise Programs, Technology and Operations. David has a proven track record in leading large teams and large-scale initiatives, and most importantly, brings key TMX attributes to the role, including an innovative mindset and a collaborative approach. And finally, I want to take this opportunity to thank Frank Di Liso for the tremendous job he has done in leading the finance team and stepping up as Interim CFO in August 2020. And the valuable contributions he has made to the senior management team throughout this interim period. Frank's leadership has been and continues to be instrumental within the organization, and I know he will play a significant role in helping David quickly acclimate to TMX and further strengthen our team for success into the future. With that, I will turn the meeting back over to you, Chuck. Thank you very much.

Thank you, John. We now return to the business to be conducted at this meeting. All proxies will be voted as instructed by the shareholders. Only proxy holders and registered shareholders attending this virtual meeting, who have not voted or who have previously returned a proxy and now likes to change their instructions and go differently need to complete an online ballot. I will now proceed -- provide rather instructions on how to vote at this meeting. Unless requested, I will not repeat these instructions for each motion. To vote, click on the applicable voting option. Your vote will be automatically submitted to TXS Trust, our Scrutineer after you click on your choice. Votes may be changed up to the time voting is closed. When voting is open, if you do not choose for, withhold or against as applicable. And if you have not previously submitted a proxy vote, your vote will not be recorded, and you will be regarded as having abstained from voting. The online ballots will be tabulated by the scrutineer announced prior to the conclusion of the meeting. A simple majority of the votes cast in person or by proxy will constitute approval of all matters voted on at the meeting. Since the meeting is conducted in a virtual-only format this year, we've asked 2 employee shareholders of the corporation, Catherine De Giusti and Tony Presutti to move and second all motions. I will call on them at the appropriate time. Voting will be open for all resolutions at the same time. This will allow you to choose to vote on all resolutions immediately, at once or wait until conclusion of discussion on each resolution prior to casting your goal. Cheryl, are there any questions from the participants on online voting procedures?

No, we have not received any questions on this.

Thank you. I understand a quorum is present, so I propose to commence the business of the meeting while the scrutineer prepares a report on attendance. The polls are now open. [Voting]

Okay. I assume I'm to proceed, Cheryl.

Please proceed.

The notice calling this meeting and the management information circular have been made available to all shareholders of the corporation entitled to vote, to the directors of the corporation and to the corporation's auditor. The last annual and special meeting of shareholders of the corporation was held on May 12, 2020. The minutes of that meeting are available for review by any shareholder by contacting the corporation. I will now request a motion that these minutes be taken as read.

I move that the minutes of the last annual and special meeting of shareholders of the corporation held on May 12, 2020, be taken as read.

I second the motion.

Cheryl, are there any questions relating to the motion that the minutes of the last annual meeting of shareholders of the corporation be taken as read?

No, we have not received any questions on this.

We will now proceed with the vote. [Voting]

I will now call upon the secretary to present the scrutineer's required on attendance.

The scrutineer reports that there are registered shareholders or proxy holders present and holding or representing 40,266,074 shares or 71.59% of the issued and outstanding shares on March 16, 2021, the record date for the meeting. According to the bylaws, a quorum is present and a written report will be delivered to you at the end of the meeting.

Based on the scrutineer's report, I declare a quorum to be present. I therefore declare that the meeting to be regularly constituted for the transaction of business. The next item of business is considered the audited consolidated financial statements of the corporation for the year ended December 30, 2020. And accompanying notes, together with the auditor's report and the management statement, all contained in the corporation's annual report, mailed to those shareholders who requested a copy prior to the meeting. The Board of Directors has approved the audited consolidated financial statements, and I now place them before the meeting for consideration. Cheryl, are there any questions relating to the annual financial statements?

No, we have not received any questions on this.

The next item of business is the appointment of the auditor of the current year. I will now ask for a motion appointing KPMG LLP as auditor of the corporation at a remuneration to be fixed by the Board of Directors until the next annual meeting of shareholders and for a seconder to this motion.

I move to appoint KPMG LLP as auditor of the corporation until the next annual meeting of shareholders and authorize the Board of Directors to fix the remuneration of KPMG LLP.

I second the motion.

You've heard the motion, Cheryl. Are there any questions relating to the appointment of the auditor for the current year?

No, we haven't received any questions relating to this.

We will now proceed with the vote. [Voting]

We will now proceed with the election of directors. The number of directors to be elected has been set at 12 by the Board. All 12 of the recommended nominees have been approved by the Board of Directors and have consented to stand for election to the Board. Additional information about the recommended nominees is contained in the management information circular. Our director qualification policy provides that in an uncontested election of directors, any nominee who receives a greater number of votes withheld than votes for, will tender his or her resignation to the Board promptly following our annual meeting. I now declare the meeting open for nominations.

I have the pleasure of nominating the following 12 individuals as directors of the corporation to hold office until the next annual meeting of shareholders or until their successors are duly elected or appointed. The individuals are Luc Bertrand, Nicolas Darveau-Garneau, Marie Giguère, Martine Irman, Moe Kermani, William Linton, Audrey Mascarenhas, John McKenzie, Kevin Sullivan, Claude Tessier, Eric Wetlaufer and Charles Winograd.

I second the motion.

Thank you. Cheryl, are there any further nominations or any questions from the participants or on the nominations?

No, we have not received any further nominations or questions on the nominations.

Thank you. Since there are no further nominations, I declare the nominations closed. 12 persons have been nominated as directors, and there are 12 directors to be elected. We will now proceed with the vote. [Voting]

The next item of business is the approval, on an advisory basis, of our approach to executive compensation. I will now ask for a motion approving, on an advisory basis, our approach to executive compensation, as discussed in the management information circular.

I move to approve, on an advisory basis, and not to diminish the role and responsibilities of the directors, that the shareholders accept the approach to executive compensation disclosed in the management information circular.

I second the motion.

You've heard the motion, Cheryl. Are there any questions relating to the approval, on an advisory basis, of our approach to executive compensation as discussed in the management information circular?

No, we have not received any questions on this.

Thank you. We will now proceed with the vote. [Voting]

The next item of business is the shareholder proposal submitted by the Atkinson Foundation as amended on April 22, 2021. The amended proposal was set out in the press release issued by TMX Group on April 22, 2021. It replaces the Atkinson Foundation's original shareholder proposal published in the management information circular. I will now ask Catherine to read the amended proposal.

The amended proposal resolves by TMX Group's Board of Directors report to shareholders on work, one, to develop internal programs and policies upon equity, diversity and inclusion, including those that encompass current and prospective indigenous employees and relationships with indigenous communities. Two, to review procurement from indigenous-owned businesses and those owned by other underrepresented groups and establish appropriate disclosure practices and objectives. And three, to engage with qualified indigenous and other organizations to support this work, so that these programs can be shown to meet standards that are appropriate for the company and wherever possible, aligned with commonly used frameworks. And to report in an ongoing way that supports investors' ability to determine the breadth, depth and content of these programs.

Thank you, Catherine. I will now ask Colette Murphy, CEO of the Atkinson Foundation, to deliver remarks on the amended shareholder proposal on behalf of the Atkinson Foundation.

Thank you. Good afternoon, everyone. My name is Colette Murphy. I'm the Executive Director of the Atkinson Foundation. Atkinson exists to promote social and economic justice. We invest, advocate and make grants to strengthen movements for racial justice, decent work in a fair economy. As a shareholder, with over $95 million in assets, including a stake in TMX Group, we have an interest in how our investments are delivering a return on our goals. We work hard to align our investment portfolio with the values and objectives of our philanthropic mission. Building an inclusive, sustainable and productive economy necessitates that companies respond to call to action, 92 of the Truth and Reconciliation Commission, which is directed at the corporate sector. On April 22, TMX Group announced its support for an amended shareholder proposal on reconciliation and indigenous conclusion. Considered by shareholders today, we would like to recognize the efforts of John McKenzie, TMX Group's CEO and the company's Board in developing this amended proposal. The Board's support is an indication that our company is committed to prioritizing and setting meaningful objectives related to reconciliation and indigenous economic advancement. In doing so, TMX group is also setting an important example for the financial services sector, and Canadian public markets at large, reaffirming these best practices. The Atkinson Foundation is collaborating with like-minded investors to enhance disclosures and targets on reconciliation amongst Canadian companies, including the Mississaugas of the Credit First Nation Community Trust represented at today's AGM by its General Manager, Mark Silvestre. Mark is a Mohawk member of the 6 nations of the Grand River First Nation. He also serves a senior adviser and founding member of the National Aboriginal Trust Officers Association, better known as NATOA. Through the reconciliation and responsible investment initiative led by NATOA and SHARE, we are collaborating to promote economic reconciliation across our portfolios, recognizing that business benefits of building diverse teams that include indigenous people and advanced reconciliation of bound. We are pleased to see TMX Group joining the ranks of public companies accelerating the shift to meaningful comparable corporate disclosure practices on reconciliation. And working with indigenous organizations like the Canadian Council for aboriginal business to do so. Fellow shareholders, I so move the amended proposal and ask for your support. I look forward to continued constructive engagement with our company in the near-term so that TMX Group's future prosperity can be built on a foundation of inclusiveness and reconciliation. Thank you.

Thank you, Colette. I will now ask Catherine De Giusti to move the amended proposal.

On behalf of the Atkinson Foundation, I move to approve the amended shareholder proposal submitted by the Atkinson Foundation as set out in the press release issued by TMX Group on April 22, 2021.

I second the motion.

Thank you. Management nominees will use the discretionary authority confirmed on that in the form of the proxy to vote for the amended proposal. Cheryl, are there any questions from participants on this proposal?

No, we have not received any questions on this proposal.

Thank you. We will now proceed with the vote. If you have not yet voted on any other items in the business agenda, please do so now. [Voting]

The polls are now closed. I will now ask Frank Di Liso, the Corporation's Interim Chief Financial Officer, to present the highlights of the financial statements and to comment on our first quarter 2021 financial results.

Thank you, Chuck, and good afternoon, everyone. We'll begin by reviewing our 2020 financial results. GAAP earnings per share for 2020 were $4.91 on a diluted basis, growth of 12% compared to $4.38 in 2019. The increase reflected a 9% increase in income from operations, lower net financing costs as well as a noncash impairment charge related to Shorcan in 2019. Our revenue grew by 7% to over $865 million, reflecting increases in Capital Formation, Equities and Fixed Income Trading & Clearing as well as Global Solutions, Insights and Analytics, or GSIA, partially offset by a decrease in Derivatives Trading and Clearance. This increase in revenue was partially offset by a 6% increase in operating expenses, which included net litigation settlement costs of just over $12 million as well as higher short-term employee performance incentive plan costs. Now turning to our Q1 '21 results. Last evening, we reported another strong quarter. Revenue grew 14% from Q1 '20, reflecting increases from Capital Formation, Equities and Fixed Income Trading & Clearing as well as GSIA, partially offset by decreases in Derivatives Trading and Clearing. Operating expenses were up 9% over Q1 '20, driven by higher employee-related costs in the first quarter. Diluted earnings per share grew 37%, which included a Q1 '20 increase in deferred income tax liabilities relating to a change in the U.K. tax rate of $7.4 million. Adjusted diluted earnings per share increased by 23% compared to last year. The revenue growth in Capital Formation was primarily driven by higher additional listing fees, revenue on both TSX and TSXV in Q1 '21 related to both an increase in number of financings and the total financing dollars raised. There were also increases in TSX Trust, sustaining listing fees and initial listing fees compared to the prior year. In Equities and Fixed Income Trading, revenue in Q1 '21 increased 23% compared with Q1 '20, driven by a 50% increase in the overall volume of securities traded on equities marketplaces. The impact from the higher volumes was somewhat offset by a less favorable product mix in Q1 '21 compared with the last year. There was also an increase in Fixed Income Trading, reflecting increased activity in swaps. Revenue from CDS was also up 11% in Q1 '21, reflecting higher clearing and settlement revenues due to higher volumes, increased depository fee revenue as well as higher international revenues. Revenue in our GSIA segment was up 7% over Q1 '20 with increases from both Trayport and our traditional data business. The increase for Trayport reflected a 5% increase in total subscribers, increased sales of additional products and higher enterprise license renewals in Q1 '21 compared with the prior year. Revenue in our traditional data business was up 3%, driven by an increase in both professional and nonprofessional subscribers, issue-based quotes, benchmarks and indices as well as co-location. Derivatives Trading and Clearing revenue declined by 7% from Q1 '20 to Q1 '21. While volumes in the mix were up 2% compared to last year, there was a lower revenue per contract attributable to an unfavorable product mix. In addition, there was a decrease of approximately $900,000 in revenue relating to our agreement to provide transitional services to BOX, which ended in June of 2020. Operating expenses in the first quarter increased by 9% compared to Q1 of the prior year. The increase reflected higher costs related to our short-term employee performance incentive plan and sales commissions, increased severance costs, higher headcount and payroll costs and IT costs. Increases were somewhat offset by a decline in long-term employee performance incentive plan costs, lower travel entertainment expenses, legal fees and marketing costs. Now turning to our balance sheet. We financed $250 million of debentures at about 2% due February 2031. A portion of the proceeds from the Series F debentures were used to repay $160 million of our commercial paper. We also renewed our normal course issuer bid program, allowing us to purchase up to 560,000 shares or approximately 1% of the common shares outstanding between March 4, 2021 and March 3, 2022. With the increase in our debt from the Series F debentures, our debt-to-adjusted EBITDA ratio was 1.9x at March 31, up from 1.8x at the end of 2020. We also held about $381 million of cash from marketable securities at the end of the quarter, which was about $216 million in excess of the $165 million we target to retain for regulatory and credit facility purposes. Last evening, our Board approved a 10% increase in the quarterly dividend from $0.70 to $0.77 per common share payable on June 11 to shareholders of record as of May 28, which is our fourth increase in the dividend over the past 3 years. At 41% of our adjusted EPS, this is consistent with our target payout ratio of 40% to 50%. As at the share price of May 11, this translates into a dividend yield of 2.3%. And with that, thank you, and I will now turn it back to Chuck.

Thank you, Frank. I have received the report of the ballots from the scrutineer, and will ask Cheryl Graden read the report.

The scrutineer reports that the shareholders present virtually or represented by proxy have voted as follows. On the appointment of KPMG as auditor at a remuneration to be fixed by the Board of Directors: for, 40,164,046; withheld, 102,028. On the election of directors, the average vote total for the 12 nominees set out in the circular: for is 39,738,813; withheld, 461,674. On the acceptance, on an advisory basis, of the approach to executive compensation as set out in the circular: for is 36,600,903; against is 4,193,584. And on the amended shareholder proposal submitted by the Atkinson Foundation as set out in the press release issued by TMX Group on April 22, 2021: for is 39,380,051; against is 820,536.

Thank you, Cheryl. As Chair, I adopt the report of the scrutineer. And based on these results, I declare that KPMG LLP has been appointed as auditor of the corporation at a remuneration to be fixed by the Board of Directors. I also declare that Luc Bertrand, Nicolas Darveau-Garneau, Marie Giguère, Martine Irman, Moe Kermani, William Linton, Audrey Mascarenhas, John McKenzie, Kevin Sullivan, Claude Tessier, Eric Wetlaufer and Charles Winograd have been duly elected as directors of the corporation to hold office until the next [Audio Gap]