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<TITLE>FORM S-1</TITLE>
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<DIV align="center" style="font-size: 9pt;">
<B>As filed with the Securities and Exchange Commission on
March&nbsp;22, 2005</B>
</DIV>

<DIV align="right" style="font-size: 9pt;">
<B>Registration
No.&nbsp;333-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B>
</DIV>

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<B>UNITED STATES SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>

<DIV align="center" style="font-size: 11pt;">
<B>Washington,&nbsp;D.C. 20549</B>
</DIV>

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<B>Form&nbsp;S-1</B>
</DIV>

<DIV align="center" style="font-size: 11pt;">
<B>REGISTRATION STATEMENT</B>
</DIV>

<DIV align="center" style="font-size: 11pt;">
<B>UNDER</B>
</DIV>

<DIV align="center" style="font-size: 11pt;">
<B>THE SECURITIES ACT OF 1933</B>
</DIV>

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<DIV style="width: 26%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 23pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>IntercontinentalExchange, Inc.</B>
</DIV>

<DIV align="center" style="font-size: 8pt;">
<I>(Exact name of registrant as specified in its charter)</I>
</DIV>

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    <TD width="3%">&nbsp;</TD>
    <TD width="27%">&nbsp;</TD>
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<TR>
    <TD align="center" valign="top">
    <B>Delaware</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    <B>7389</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    <B>58 2555 670</B></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <I>(State or Other Jurisdiction of<BR>
    Incorporation or Organization)</I></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    <I>(Primary Standard Industrial<BR>
    Classification Code Number)</I></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    <I>(I.R.S. Employer<BR>
    Identification Number)</I></TD>
</TR>

</TABLE>
</CENTER>

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<DIV style="width: 26%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 8pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>2100 RiverEdge Parkway</B>
</DIV>

<DIV align="center" style="font-size: 8pt;">
<B>Suite&nbsp;500</B>
</DIV>

<DIV align="center" style="font-size: 8pt;">
<B>Atlanta, GA 30328</B>
</DIV>

<DIV align="center" style="font-size: 8pt;">
<B>(770)&nbsp;857-4700</B>
</DIV>

<DIV align="center" style="font-size: 7pt;">
<I>(Address, including zip code, and telephone number,</I>
</DIV>

<DIV align="center" style="font-size: 7pt;">
<I>including area code, of registrant&#146;s principal executive
offices)</I>
</DIV>

<DIV align="center" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 26%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 8pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Johnathan H. Short,&nbsp;Esq.</B>
</DIV>

<DIV align="center" style="font-size: 8pt;">
<B>General Counsel</B>
</DIV>

<DIV align="center" style="font-size: 8pt;">
<B>IntercontinentalExchange, Inc.</B>
</DIV>

<DIV align="center" style="font-size: 8pt;">
<B>2100 RiverEdge Parkway</B>
</DIV>

<DIV align="center" style="font-size: 8pt;">
<B>Suite&nbsp;500</B>
</DIV>

<DIV align="center" style="font-size: 8pt;">
<B>Atlanta, GA 30328</B>
</DIV>

<DIV align="center" style="font-size: 8pt;">
<B>(770)&nbsp;857-4700</B>
</DIV>

<DIV align="center" style="font-size: 7pt;">
<I>(Name, address, including zip code, and telephone number,</I>
</DIV>

<DIV align="center" style="font-size: 7pt;">
<I>including area code, of agent for service)</I>
</DIV>

<DIV align="center" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 26%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 8pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B><I>Copies to:</I></B>
</DIV>

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<TR style="font-size: 1pt;">
    <TD width="53%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="44%">&nbsp;</TD>
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<TR>
    <TD align="center" valign="top">
    <B>David B. Harms,&nbsp;Esq.<BR>
    David J. Gilberg,&nbsp;Esq.<BR>
    Catherine M. Clarkin,&nbsp;Esq.<BR>
    Sullivan&nbsp;&#38; Cromwell LLP<BR>
    125 Broad Street<BR>
    New York, NY 10004<BR>
    (212)&nbsp;558-4000</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    <B>William F. Gorin,&nbsp;Esq.<BR>
    Cleary Gottlieb Steen&nbsp;&#38; Hamilton LLP<BR>
    One Liberty Plaza<BR>
    New York, NY 10006<BR>
    (212) 225-2000</B></TD>
</TR>

</TABLE>
</CENTER>

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<DIV style="width: 26%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="left" style="font-size: 8pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Approximate
date of commencement of proposed sale to the public:</B> As soon
as practicable after the effective date of this registration
statement.
</DIV>

<DIV align="center" style="font-size: 3pt; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 26%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="left" style="font-size: 8pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If any of the
securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule&nbsp;415 of the
Securities Act of 1933, check the following
box.&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;
</FONT>
</DIV>

<DIV align="left" style="font-size: 8pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If this Form is
filed to register additional securities for an offering pursuant
to Rule&nbsp;462(b) under the Securities Act, check the
following box and list the Securities Act registration statement
number of the earlier effective registration statement for the
same
offering.&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;
</FONT>
</DIV>

<DIV align="left" style="font-size: 8pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If this Form is
a post-effective amendment filed pursuant to Rule&nbsp;462(c)
under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier
effective registration statement for the same
offering.&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;
</FONT>
</DIV>

<DIV align="left" style="font-size: 8pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If this Form is
a post-effective amendment filed pursuant to Rule&nbsp;462(d)
under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier
effective registration statement for the same
offering.&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;
</FONT>
</DIV>

<DIV align="left" style="font-size: 8pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the delivery
of the prospectus is expected to be made pursuant to
Rule&nbsp;434 under the Securities Act, check the following
box.&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;
</FONT>
</DIV>

<DIV align="center" style="font-size: 8pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>CALCULATION OF REGISTRATION FEE</B>
</DIV>

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    <TD width="56%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- Right VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="17%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
</TR>


<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>


<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR style="font-size: 7pt;">
    <TD>&nbsp;</TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Proposed Maximum</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Amount of</B></TD>
</TR>

<TR style="font-size: 7pt;">
    <TD align="center" nowrap><B>Title of Each Class of</B></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Aggregate</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Registration</B></TD>
</TR>

<TR style="font-size: 7pt;">
    <TD align="center" nowrap><B>Securities to be Registered</B></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Offering Price(2)</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Fee</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Common Stock, par value $0.01&nbsp;per share(1)</DIV>
    </TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    $115,000,000</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    $13,536</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 2pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 8pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    Includes shares which the underwriters have the option to
    purchase to cover over-allotments, if any.</TD>
</TR>

<TR>
    <TD style="font-size: 2pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    Estimated solely for the purpose of calculating the registration
    fee pursuant to Rule&nbsp;457(o) under the Securities Act of
    1933.</TD>
</TR>

</TABLE>

<DIV align="center" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 26%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="left" style="font-size: 8pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>The
registrant hereby amends this registration statement on such
date or dates as may be necessary to delay its effective date
until the registrant shall file a further amendment which
specifically states that this registration statement shall
thereafter become effective in accordance with Section&nbsp;8(a)
of the Securities Act of 1933 or until the registration
statement shall become effective on such date as the Commission,
acting pursuant to said Section&nbsp;8(a), may determine.</B>
</DIV>

<DIV align="center" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 100%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 4pt;">
<DIV style="width: 100%; border-top: 2.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<TABLE width="100%" cellpadding="5" style="border: 3pt double #000000; margin-bottom: 6pt; font-size: 10pt"><TR><TD>
<B><FONT color="#E8112D">The information in this prospectus is
not complete and may be changed. These securities may not be
sold until the registration statement filed with the Securities
and Exchange Commission is effective. This prospectus is not an
offer to sell nor does it seek an offer to buy these securities
in any jurisdiction where the offer or sale is not
permitted.
</FONT></B>
</TD></TR></TABLE>

<DIV align="center" style="font-size: 10pt; margin-top: 1pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B><FONT color="#E8112D">SUBJECT TO COMPLETION. DATED
MARCH&nbsp;22, 2005.</FONT></B>
</DIV>

<DIV align="center" style="font-size: 15pt; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
Shares
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<IMG src="y06540y06540l1.gif" alt="(IntercontinentalExchange Logo)">
</DIV>

<DIV align="center" style="font-size: 15pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
Common Stock
</DIV>

<DIV align="center" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 26%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
is an initial public offering of common stock of
IntercontinentalExchange, Inc.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
are
offering &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of
the shares to be sold in the offering. The selling shareholders
are offering an
additional &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares.
We will not receive any proceeds from the sale of the shares
being sold by the selling shareholders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior
to this offering, there has been no public market for our common
stock. We estimate that the initial public offering price per
share will be between
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.
We will apply to list our common stock on the New York Stock
Exchange under the symbol &#147;ICE&#148;. &nbsp;See
&#147;Underwriting&#148; for a discussion of the factors to be
considered in determining the initial offering price.
</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Investing
in our common stock involves significant risks. See &#147;Risk
Factors&#148; beginning on page&nbsp;10 to read about factors
you should consider before buying shares of our common stock.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Neither the Securities and Exchange Commission nor any other
regulatory body has approved or disapproved of these securities
or passed upon the adequacy or accuracy of this prospectus. Any
representation to the contrary is a criminal offense.</B>
</DIV>

<DIV align="center" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 26%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="73%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Per Share</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Initial public offering price</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Underwriting discount</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Proceeds, before expenses, to IntercontinentalExchange,
    Inc.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Proceeds, before expenses, to the selling shareholders</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
the extent that the underwriters sell more
than &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of our common stock, the underwriters have the option to
purchase up to an
additional&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
from some of the selling shareholders at the initial public
offering price less the underwriting discount.
</DIV>

<DIV align="center" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 26%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The underwriters expect to deliver the shares of common stock in
New York, New York
on &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2005.
</DIV>

<DIV align="center" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 26%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

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<I>Joint Book-Running Managers</I>
</DIV>

<DIV style="margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 18pt;">

<TR>
    <TD width="50%"></TD>
    <TD width="50%"></TD>
</TR>

<TR valign="top">
    <TD align="left"><B> Morgan Stanley</B></TD>
    <TD align="right"><B>Goldman, Sachs&nbsp;&#38; Co.</B></TD>
</TR>

</TABLE>

<DIV align="center" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 26%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
Prospectus
dated &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2005
</DIV>

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<B>PROSPECTUS SUMMARY</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>This summary highlights information contained elsewhere in
this prospectus. Before making an investment decision, you
should read the entire prospectus carefully, including the
section entitled &#147;Risk Factors&#148; and our consolidated
financial statements and related notes included elsewhere in
this prospectus. Unless otherwise indicated, the terms
&#147;IntercontinentalExchange&#148;, &#147;we&#148;,
&#147;us&#148;, &#147;our&#148;, &#147;our company&#148; and
&#147;our business&#148; refer to IntercontinentalExchange, Inc.
or IntercontinentalExchange, LLC, as applicable, together with
our consolidated subsidiaries. Due to rounding, figures in
tables may not sum exactly.</I>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>BUSINESS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Overview</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We operate the leading global futures and over-the-counter, or
OTC, marketplace for trading a broad array of energy products.
Our marketplace brings together buyers and sellers of
derivatives and physical energy commodities contracts through
our leading, Internet-based electronic trading platform. Our
electronic platform increases the accessibility and transparency
of the energy commodities markets and enhances the speed and
quality of trade execution. The open architecture of our
business model&nbsp;&#151; meaning our ability to offer
centralized access to trading in futures and OTC contracts on a
cleared or bilateral basis through multiple
interfaces&nbsp;&#151; allows our participants to optimize their
trading operations and strategies. We conduct our OTC business
directly, and our futures business through our wholly-owned
subsidiary, the International Petroleum Exchange, or the IPE.
The IPE is the largest energy futures exchange in Europe, as
measured by 2004 traded contract volumes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
During 2004, 35.5&nbsp;million contracts were traded in our
futures markets and 31.0&nbsp;million contracts were traded in
our OTC markets, up 6.6% from 33.3&nbsp;million futures
contracts traded in 2003 and up 27.6% from 24.3&nbsp;million OTC
contracts traded in 2003. Our revenues consist primarily of
transaction fees, trading access fees and market data fees. On a
consolidated basis, we generated $108.4&nbsp;million in revenues
in 2004, a 15.6% increase compared to $93.7&nbsp;million in
2003, and $21.9&nbsp;million in net income in 2004, a 64.1%
increase compared to $13.4&nbsp;million in 2003. We recorded
consolidated net cash provided from operations of
$40.2&nbsp;million in 2004, a 48.2% increase compared to
$27.1&nbsp;million in 2003.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Our History</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 1997, Jeffrey C. Sprecher, our founder, chairman and chief
executive officer, acquired Continental Power Exchange, Inc., or
CPEX, our predecessor company, to develop a platform to provide
a more transparent and efficient market structure for OTC energy
commodities trading. In May 2000, our company was formed, and
CPEX contributed to us all of its assets, which consisted
principally of electronic trading technology, and its
liabilities, in return for a minority equity interest in our
company. In connection with our formation, seven leading
wholesale commodities market participants, which we refer to as
our Initial Shareholders, acquired equity interests in our
company. In November 2000, six leading natural gas and power
companies, which we refer to as the Gas and Power Firms,
acquired equity interests in our company. In June 2001, we
expanded our business into futures trading by acquiring the IPE,
which, at the time, was operated predominantly as a floor-based,
open-outcry exchange.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Our Business</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our marketplace is globally accessible, promotes price discovery
and offers participants the opportunity to trade a variety of
energy products. Our key products include contracts based on
crude or refined oil, natural gas and power. Our derivative and
physical products provide participants with a means for managing
risks associated with changes in the prices of these
commodities, asset allocation, ensuring physical delivery of
select commodity products, speculation and arbitrage. The
majority of our trading volume is financially settled, meaning
that settlement is made through cash payments based on the value
of the underlying commodity, rather than through physical
delivery of the commodity itself.
</DIV>
</DIV>

<P align="center" style="font-size: 10pt;">1

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We operate our business in two distinct markets: futures markets
and OTC markets. Futures markets offer trading in standardized
derivative contracts on a regulated exchange and OTC markets
offer trading in over-the-counter derivative contracts,
including contracts that provide for the physical delivery of an
underlying commodity and contracts that provide for financial
settlement based on the prices of underlying commodities. All
futures and cleared OTC contracts are cleared through a central
clearinghouse. We offer OTC contracts that can be traded on a
bilateral basis and certain OTC contracts that can be traded on
a cleared basis. Bilateral contracts are settled between
counterparties, while cleared contracts are novated to a third
party clearinghouse where they are marked to market and margined
daily before final settlement at expiration.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We operate our futures markets through our subsidiary, the IPE,
a Recognized Investment Exchange, or RIE, based in London, and
currently offer trading both on our electronic platform and on
our open-outcry trading floor. We operate our OTC markets
exclusively on our electronic platform. In addition to trade
execution, our electronic platform offers a comprehensive suite
of trading-related services, including electronic trade
confirmation, access to clearing services and risk management
functionality. We also offer a variety of market data services
for both the futures and OTC markets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Recent Developments</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
To take advantage of the increasing acceptance and adoption of
electronic trading, and to maintain and enhance our competitive
position, we recently announced our intention to close our
open-outcry trading floor in London on April&nbsp;7, 2005.
Thereafter, all of our futures trading will be conducted
exclusively on our electronic platform. For a discussion of this
announcement and the strategic and financial benefits we expect
to achieve, see &#147;Business&nbsp;&#151; Recent
Developments&#148;.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Our Competitive Strengths</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have established ourselves as the leading marketplace for
global futures and OTC energy commodities trading by leveraging
a number of key strengths, including:
</DIV>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Highly Liquid Global Markets and Benchmark
    Contracts</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We offer liquid markets in a number of the most actively traded
global energy commodities products. We operate the leading
market for trading in Brent Crude futures. The IPE Brent Crude
futures contract is the leading benchmark for pricing crude oil
produced and consumed outside of the United States, and for
pricing a majority of the world&#146;s traded oil products. We
also operate the leading market for trading in cleared OTC Henry
Hub natural gas contracts, with 17.0&nbsp;million contracts
traded in 2004. Henry Hub natural gas markets are the most
liquid natural gas markets in North America.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Leading Electronic Energy Trading Platform</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our leading electronic trading platform provides centralized and
direct access to trade execution and real-time price discovery.
We operate our OTC markets exclusively on our electronic
platform and have accelerated full transition of our futures
markets to electronic trading. Our electronic platform has
enabled us to attract significant liquidity from traditional
market participants as well as new market entrants seeking the
efficiencies and ease of execution offered by electronic
trading. We have developed a significant global presence with
approximately 4,900 active trading screens at over 890 OTC
participant firms and over 140&nbsp;futures participant firms as
of February&nbsp;28, 2005.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Integrated Access to Futures and OTC Markets</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We attribute the growth in our business in part to our ability
to offer market participants integrated access to futures and
OTC markets. Our integrated and electronic business model allows
us to respond rapidly to our participants&#146; needs, changing
market conditions and evolving trends in the markets for energy
commodities
</DIV>
</DIV>

<P align="center" style="font-size: 10pt;">2

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trading. We believe that our demonstrated ability to develop and
launch new products for both the futures and OTC markets
provides us with several competitive advantages, including:
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Multi-Product Trading:</I> We operate a globally accessible
    platform that offers a seamless interface between trading in
    futures products and options on those products, as well as a
    broad range of OTC products.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Multiple Access Options:</I> Our participants can access our
    marketplace through a variety of means, including through our
    Internet-based electronic trading platform, proprietary
    front-end systems, independent software vendors, or ISVs, and
    brokerage firms. ISVs allow market participants to access
    multiple exchanges through a single interface, which is
    integrated with the participants&#146; risk management systems.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Cleared OTC Contracts:</I> We were the first market to
    introduce cleared OTC energy contracts, which we believe have
    attracted new participants to our markets by reducing bilateral
    credit risk and administrative burdens and by improving capital
    efficiency.</TD>
</TR>

</TABLE>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Highly Scalable, Proven Technology Infrastructure</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our Internet-based electronic trading platform provides rapid
trade execution and is, we believe, one of the world&#146;s most
flexible, efficient and secure systems for commodities trading.
We have designed our platform to be highly scalable, meaning
that we can expand capacity and add new products and
functionality efficiently, at relatively low cost and without
disruption to our markets. Trades on our platform are executed
on average in 250 milliseconds, or one quarter of a second,
compared to up to a minute or more for execution of an order
through a traditional voice broker. Our platform can also be
adapted and leveraged for use in other markets, as demonstrated
by the decision of the Chicago Climate Exchange, or CCX, to
operate its emissions-trading market on our platform. We believe
that our commitment to using technology to develop our platform
will continue to contribute to the growth and development of our
business.
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Transparency and Independence</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We offer market participants price transparency, meaning a
complete view of the depth and liquidity of our markets, through
our electronic platform. This is in contrast to the lack of
transparency of many open-outcry exchanges and voice-brokered
markets. All participant orders placed on our platform are
executed in the order in which they are received, ensuring that
all orders receive equal execution priority. In addition, the
transparency of our platform facilitates market regulation
through increased market visibility and the generation of
complete records of all transactions executed in our markets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In contrast to many of our competitors, our company is governed
independently and impartially and in a manner intended to
promote shareholder value and the operation of fair and
efficient markets. We believe that this governance structure
provides us with greater flexibility to launch new products and
services, and evaluate and pursue growth opportunities while
ensuring impartial treatment for our participants. In addition,
we do not participate as a principal in any trading activities,
which allows us to avoid potential conflicts of interest that
could arise from engaging in trading activities while operating
our marketplace.
</DIV>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Strong Value Proposition</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We believe that, by using our electronic platform, market
participants can achieve price improvement over alternate means
of trading. Electronic trade execution offers cost efficiencies
by providing firm posted prices and reducing trade-processing
errors and back office overhead, and allows us to accelerate the
introduction of new products on our platform. The combination of
electronic trade execution and integrated trading and market
data services facilitates automation by our participants of all
phases of trade execution and processing from front-office to
back-office, and ranging from trading and risk management to
settlement. In addition, in our futures business, we offer
substantially lower membership fees than those required to join
other exchanges. For example, as of March&nbsp;2005, the price
of membership, or a seat, on the New York Mercantile Exchange,
or NYMEX, was $1.82&nbsp;million, while the prevailing price of
a Chicago Board of Trade,
</DIV>
</DIV>

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<DIV align="left" style="font-size: 10pt;">
or CBOT, membership was $1.36&nbsp;million. In contrast, members
of our futures exchange are only required to pay membership fees
of up to a maximum of &#163;6,000&nbsp;per annum, or
approximately $11,500.
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Strong Management Team</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our management team has on average over 19&nbsp;years of
experience in the energy and financial services sectors. Our
founding management team includes Jeffrey C. Sprecher, our
chairman and chief executive officer, Charles A. Vice, our chief
operating officer, and Edwin Marcial, our chief technology
officer. We enhanced our management team with additional
noteworthy professionals, including Richard V. Spencer, our
chief financial officer, and David S. Goone, our head of
business development and sales. We later integrated the
managerial talent of Dr.&nbsp;Richard Ward, the IPE&#146;s chief
executive officer, following our acquisition of the IPE. Our
management team has successfully developed and deployed our
electronic platform, integrated the IPE into our business,
developed and launched our electronic trade confirmation system
and introduced the industry&#146;s first cleared OTC energy
contracts. We believe that the proven strength and experience of
our management team will continue to provide us with a
competitive advantage in executing our business strategy.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Our Growth Strategy</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We seek to advance our leadership position by focusing our
efforts on the following key strategies for growth:
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Attract New Market Participants</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In recent years, our participant base has expanded and
diversified due to the emergence of new participants in the
energy commodities markets. These new participants include
financial services companies, such as investment banks, hedge
funds, proprietary trading firms and asset managers, as well as
industrial businesses that are increasingly engaging in hedging,
trading and risk management strategies. Many of these
participants have been attracted to the energy markets in part
due to the availability of electronic trading, primarily through
our platform. We intend to continue to expand our participant
base by targeting these and other new market participants and by
offering electronic trade execution and processing capabilities
that appeal to a broad range of market participants.
</DIV>

<DIV style="margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Increase Connectivity to Our Marketplace</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our participants may access our electronic platform for trading
in our futures markets through our own Internet-based front-end
or through the front-end systems developed by any of seven ISVs.
These represent a substantial portion of the ISVs that serve the
commodities futures markets. Furthermore, participants in our
futures markets can access our platform directly through their
own proprietary interfaces or through a number of brokerage
firms. Participants may access our OTC markets through our
Internet-based front-end or, in the case of some of our most
liquid markets, through a leading ISV. We intend to extend our
initiatives in this area by continuing to establish multiple
points of access with our existing and prospective market
participants.
</DIV>

<DIV style="margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Expand Our Market Data Business</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We will continue to leverage the value of the market data
derived from our trade execution, clearing and confirmation
system by developing enhancements to our existing information
services and creating new market data products. For example, in
2004, we introduced our Market Price Validation, or MPV,
service, an information service that provides a means for
subscribers to mark to market their month-end portfolios. We
also publish daily transaction-based indices for the North
American spot natural gas and power markets based on data
collected from trading activity on our platform. In addition, we
sell real-time and historical futures quotes and other futures
market data through 43 data vendors that distribute this
information, directly and through various sub-vendors, to
approximately 19,000 subscribers. We believe that the database
of information generated by our platform serves as the single
largest repository of energy market data in North America. As a
result of the breadth of our global data offerings, we believe
that we are well positioned to meet the growing demand for
increased availability of energy market data.
</DIV>
</DIV>

<P align="center" style="font-size: 10pt;">4
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<DIV style="width: 100%; border: 1px solid black; padding: 12px;">

<DIV style="margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Develop New Trading Products and Services</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We continually develop and launch new products designed to meet
market demand and the needs of our participants. In 2004, we
launched two new electronically traded futures contracts for
U.K. power, and we, together with the European Climate Exchange,
or ECX, plan to launch a futures contract on our platform in
2005 based on allowances issued under a government-sponsored
program designed to control and reduce greenhouse gas emissions.
During the past three years, we successfully launched over
25&nbsp;new cleared OTC contracts, and we currently plan to
introduce new products at a similar rate going forward. In
particular, we believe there is an opportunity to increase
electronic trading in oil contracts, since historically only a
small percentage of all OTC oil trades have been executed
electronically. We also intend to continue to introduce
bilateral OTC contracts in less liquid, or niche, markets to
satisfy the specific needs of our participants as they arise. We
may also seek to license our platform to other exchanges for the
operation of their markets on our platform, as we have with ECX
and CCX.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Pursue Select Strategic Opportunities</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We intend to pursue strategic acquisitions and alliances that
will enable us to supplement our internal growth, expand our
trading products and related services, advance our technology
and take advantage of new developments in the markets for energy
commodities trading. We focus on these key evaluation criteria
when identifying and assessing potential strategic transactions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Risk Factors</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We face risks in operating our business, including risks that
may prevent us from achieving our business strategy or that may
adversely affect our business, financial condition and operating
results. You should consider these risks before investing in our
company. Risks to our business include the substantial
competition we face from well-established competitors and
potential new entrants, our dependence on trading volume and
liquidity in our markets, our ability to effect an orderly
transition of all open-outcry trading in our futures markets to
our electronic platform, adverse resolution of pending
litigation and potential regulatory changes, among others. For a
discussion of the significant risks associated with operating
our business, our industry or investing in our common stock, you
should read the section entitled &#147;Risk Factors&#148;
beginning on page&nbsp;10 of this prospectus.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Our Recapitalization</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In this prospectus, we refer to the changes described below as
our recapitalization. Effective upon the closing of this
offering, we will amend our charter and bylaws to, among other
things:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    create a new class of common stock, which we refer to as new
    common stock, to be issued to investors who purchase shares in
    this offering;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    authorize our board of directors to grant holders of our
    outstanding shares of Class&nbsp;A common stock, Series&nbsp;1,
    which we refer to as our Class&nbsp;A1&nbsp;shares, and holders
    of our outstanding shares of Class&nbsp;A common stock,
    Series&nbsp;2, which we refer to as our
    Class&nbsp;A2&nbsp;shares, a right to convert these shares into
    shares of new common stock at the holder&#146;s option, subject
    to such conditions as our board of directors may deem
    appropriate;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    adopt customary anti-takeover provisions in our charter;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    reduce the number of authorized and outstanding Class&nbsp;A1
    and Class&nbsp;A2&nbsp;shares by way of
    a &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;for 1 reverse stock split.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Unless the context otherwise requires, we refer to our
Class&nbsp;A1&nbsp;shares and our Class&nbsp;A2&nbsp;shares,
collectively, as our Class&nbsp;A common stock, and we refer to
our Class&nbsp;A common stock and shares of our new common stock
that will be sold in this offering, collectively, as our common
stock. Any shares to be sold by the selling shareholders in this
offering will be converted from the Class&nbsp;A2&nbsp;shares
held by such holder into shares of new common stock upon the
closing of this offering.
</DIV>
</DIV>

<P align="center" style="font-size: 10pt;">5
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<DIV style="width: 100%; border: 1px solid black; padding: 12px;">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Unless otherwise specified, all information in this prospectus
assumes that we have obtained all necessary approvals from our
shareholders and that the recapitalization has been completed,
including the &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;for 1 reverse stock
split of the Class&nbsp;A common stock, and all references to
our common stock and our charter and bylaws refer to those items
as they will be in effect at the closing of this offering.
</DIV>

<DIV align="center" style="font-size: 3pt; margin-top: 15pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 26%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
You may contact us at our principal executive offices, located
at 2100 RiverEdge Parkway, Suite&nbsp;500, Atlanta, Georgia
30328, or by telephone at (770)&nbsp;857-4700. You may find us
on the Internet at www.theinterchange.com. Information contained
on our website does not constitute a part of this prospectus. We
have included our website address only as an inactive textual
reference and do not intend it to be an active link to our
website.
</DIV>
</DIV>

<P align="center" style="font-size: 10pt;">6
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<DIV style="width: 100%; border: 1px solid black; padding: 12px;">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>The Offering</B>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt;">

<TR>
    <TD width="28%"></TD>
    <TD width="1%"></TD>
    <TD width="71%"></TD>
</TR>

<TR>
    <TD valign="top">
    Common stock offered by us</TD>
    <TD></TD>
    <TD valign="top">
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    Common stock offered by the selling shareholders</TD>
    <TD></TD>
    <TD valign="top">
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares(1)</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    Total common stock offered</TD>
    <TD></TD>
    <TD valign="top">
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares(1)</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    Common stock to be outstanding after the offering</TD>
    <TD></TD>
    <TD valign="top">
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares(1)(2)</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    Use of proceeds</TD>
    <TD></TD>
    <TD valign="top">
    We will receive net proceeds from our sale of common stock in
    the offering of approximately
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    (assuming a per share price equal to the midpoint of the
    estimated price range set forth on the cover of this
    prospectus). We intend to use the net proceeds for general
    corporate purposes, including expanding and diversifying our
    products and services, and for repayment in full of outstanding
    long-term debt, which as of December&nbsp;31, 2004, amounted to
    $13.0&nbsp;million. We will not receive any proceeds from the
    sale of common stock by the selling shareholders.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    Voting rights</TD>
    <TD></TD>
    <TD valign="top">
    The holders of our common stock will be entitled to one vote per
    share on all matters submitted to a vote of our common
    shareholders.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    Dividends</TD>
    <TD></TD>
    <TD valign="top">
    We do not anticipate paying any cash dividends in the
    foreseeable future.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    Proposed New York Stock Exchange symbol</TD>
    <TD></TD>
    <TD valign="top">
    &#147;ICE&#148;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    Risk Factors</TD>
    <TD></TD>
    <TD valign="top">
    Please read &#147;Risk Factors&#148; and other information
    included in this prospectus for a discussion of factors you
    should carefully consider before deciding to invest in our
    common stock.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The number of shares of our common stock to be outstanding after
this offering, as set forth above and elsewhere in this
prospectus, unless otherwise specified, is based
on &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of our common stock outstanding as of December&nbsp;31, 2004,
after giving effect to the recapitalization. This number of
shares of common stock to be outstanding excludes:
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    of our common stock reserved for issuance upon the exercise of
    options under our 2000 Stock Option Plan, of
    which &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    were subject to outstanding options as of December&nbsp;31,
    2004, at a weighted average exercise price of
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
    share;</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    of our common stock reserved for issuance under our 2004
    Restricted Stock Plan, of
    which &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    were subject to outstanding grants as of December&nbsp;31,
    2004;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    of our common stock reserved for issuance under our 2003
    Restricted Stock Deferral Plan for Outside Directors, of
    which &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    were subject to outstanding grants as of December&nbsp;31, 2004.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    Does not
    include &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    of common stock that may be sold by the selling shareholders if
    the underwriters choose to exercise in full their option to
    purchase additional shares. See &#147;Underwriting&#148;. Unless
    otherwise indicated, the information contained in this
    prospectus assumes that the underwriters&#146; option to
    purchase additional shares is not exercised.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    Includes &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    of new common
    stock, &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class&nbsp;A1&nbsp;shares
    and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class&nbsp;A2&nbsp;shares.</TD>
</TR>

</TABLE>
</DIV>

<P align="center" style="font-size: 10pt;">7

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<DIV style="width: 100%; border: 1px solid black; padding: 12px;">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Summary Consolidated Financial Data</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following tables summarize the consolidated financial data
for our business. The following summary consolidated financial
data set forth below should be read in conjunction with our
consolidated financial statements and related notes and
&#147;Management&#146;s Discussion and Analysis of Financial
Condition and Results of Operations&#148; included elsewhere in
this prospectus.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We derived the summary consolidated statement of income data and
the consolidated balance sheet data set forth below for the
years ended December&nbsp;31, 2004, 2003 and 2002 and as of
December&nbsp;31, 2004 and 2003 from our audited consolidated
financial statements that are included elsewhere in this
prospectus in reliance upon the report of Ernst&nbsp;&#38; Young
LLP, independent registered public accounting firm. Our
historical results do not necessarily indicate results expected
for any future period.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="49%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Year Ended December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2002</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>(in thousands, except for share and per share data)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Consolidated Statement of Income Data</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Revenues(1):</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Transaction fees, net(2)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>90,906</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>81,434</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>118,794</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Data services fees</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,691</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,742</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,141</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Trading access fees</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,595</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,461</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>490</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,222</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,109</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,065</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>108,414</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>93,746</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>125,490</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Operating expenses:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cost of hosting</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,279</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,715</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,962</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Compensation and benefits</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30,074</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26,236</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>27,906</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Professional services</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,523</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,138</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,876</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Selling, general and administrative</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,120</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,398</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,425</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Depreciation and amortization</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,024</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,341</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,368</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total operating expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>76,020</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>74,828</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>74,537</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Operating income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32,394</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,918</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>50,953</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total other income, net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,328</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>948</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,492</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Income before income taxes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33,722</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,866</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>52,445</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Income tax expense</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,773</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,489</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,739</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>21,949</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>13,377</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>34,706</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deduction for accretion of redeemable common stock(3)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,768</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,656</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income available to common shareholders</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>21,949</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>11,609</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>31,050</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Earnings per common share:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Basic and Diluted</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.14</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Weighted average common shares outstanding:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Basic</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>211,460,434</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>217,315,866</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>217,570,408</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Diluted</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>212,248,312</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>218,558,834</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>219,400,380</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 9pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    We generate revenues from related parties in the ordinary course
    of our business. For a presentation and discussion of our
    revenues attributable to related parties for the years ended
    December&nbsp;31, 2004, 2003 and 2002, see our consolidated
    statements of income and note&nbsp;11 in our consolidated
    financial statements that are included elsewhere in this
    prospectus.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    Our transaction fees are presented net of rebates. See
    &#147;Management&#146;s Discussion and Analysis of Financial
    Condition and Results of Operations&nbsp;&#151; Sources of
    Revenues&nbsp;&#151; Transaction Fees&#148;.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(3)&nbsp;</TD>
    <TD align="left">
    We redeemed all of our Class&nbsp;B redeemable common stock on
    November&nbsp;23, 2004 at a price of $5.895&nbsp;per share, for
    aggregate consideration of $67.5&nbsp;million. Upon its issuance
    on June&nbsp;18, 2001, we recorded our Class&nbsp;B redeemable
    common stock at its discounted present value of
    $60.2&nbsp;million. We recorded charges to retained earnings for
    the accretion of this amount up to the $67.5&nbsp;million
    redemption value of our Class&nbsp;B redeemable common stock
    over a two-year period ending in June 2003, which was the
    earliest potential redemption date.</TD>
</TR>

</TABLE>
</DIV>

<P align="center" style="font-size: 10pt;">8

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="width: 100%; border: 1px solid black; padding: 12px;">

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="67%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>As of December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004(1)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>(in thousands)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Consolidated Balance Sheet Data</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash and cash equivalents</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>61,199</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>44,913</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Restricted cash and restricted short-term investments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,421</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,421</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>36,797</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Short-term investments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,700</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,700</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total current assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100,042</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>105,893</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>207,518</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>214,879</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total current liabilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34,440</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34,440</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,917</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Long-term portion of revolving credit facility</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Shareholders&#146; equity</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>149,731</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>118,776</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    As adjusted to reflect the sale of shares of our common stock in
    this offering at an assumed initial public offering price of
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
    share (the mid-point of the estimated price range set forth on
    the cover of this prospectus), after deducting the underwriting
    discount and our estimated expenses in this offering, and our
    repayment, out of the net proceeds of this offering, of
    long-term debt which, as of December&nbsp;31, 2004, amounted to
    $13.0&nbsp;million. We will also effect a recapitalization that
    will occur upon the closing of this offering, which will include
    the creation of a new class of common stock and the right to
    convert shares of our Class&nbsp;A common stock into shares of
    our new common stock. For a description of our recapitalization,
    see &#147;Organization and Recapitalization&#148;. The
    recapitalization will have no financial impact on our
    consolidated financial statement balances. The Class&nbsp;B
    redeemable common stock was terminated upon its redemption in
    full in November 2004.</TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; ">

<TR style="font-size: 1pt;">
    <TD width="68%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Year Ended December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2002</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>(in thousands)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Operating Data</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Our total average daily commission fee and exchange fee revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>353</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>294</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>460</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="13">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Our Trading Volume:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="13">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Annual futures volume(1)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35,541</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33,341</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30,441</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Futures average daily volume(2)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>140</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>132</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>121</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Annual OTC volume(1)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30,978</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24,270</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>44,005</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    OTC average daily volume(2)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>123</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>97</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>175</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    Volume is calculated based on the number of contracts traded in
    our markets, or the number of round turn trades. Each
    &#147;round turn&#148; represents a matched buy and sell order
    of one contract.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    Represents the total annual volume, in contracts, for the year
    divided by the number of trading days during that year.</TD>
</TR>

</TABLE>
</DIV>

<P align="center" style="font-size: 10pt;">9
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>RISK FACTORS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>The purchase of our common stock involves significant
investment risks. Some of these are described below. You should
consider these risks carefully before making a decision to
invest in our common stock. In addition, there may be risks of
which we are currently unaware, or that we currently regard as
immaterial based on the information available to us, that later
prove to be material. These risks may adversely affect our
business, financial condition and operating results. As a
result, the trading price of our common stock could decline, and
you could lose some or all of your investment.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Risks Relating to Our Business</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B><I>We face intense competition from regulated exchanges,
voice brokers and other electronic platforms, which could
adversely affect our business. If we are not able to compete
successfully, our business will not survive.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The market for commodities trading facilities is highly
competitive and we expect competition to intensify in the
future. Our current and prospective competitors, both
domestically and internationally, are numerous. Our principal
competitor, NYMEX, is a regulated, predominantly open-outcry
futures exchange that offers trading in futures products and
options on those products in the crude oil, gas and metals
markets, among other commodities markets. NYMEX has also
established two electronic platforms: NYMEX Access and
ClearPort. NYMEX is larger than we are and has greater financial
resources, a broader participant base and a longer operating
history. NYMEX also operates its own clearinghouse, which may
give it greater flexibility in introducing new products and
clearing services than we are able to offer through our
relationship with LCH.Clearnet, formerly known as the London
Clearing House, a leading clearinghouse based in London. In
November 2004, NYMEX opened an open-outcry trading floor in
Dublin for trading in a contract that directly competes with our
most important futures contract, the IPE Brent Crude futures
contract. In addition, on February&nbsp;14, 2005, NYMEX
announced its plans to open a new London open-outcry trading
floor that would compete directly with trading in all of our
futures products, including, in particular, the IPE Brent Crude
futures contract. Given our recent decision to close our
open-outcry trading floor and conduct all futures trading
exclusively on our electronic platform, a NYMEX trading floor
may appeal to traders who prefer the open-outcry method of
trading. If participants trading in our markets move to NYMEX,
we would lose trading volume, which could negatively impact our
results of operations and profitability. In addition, NYMEX has
filed a claim against us that asserts, among other things, that
we have infringed copyrights that it claims exist in its
publicly available settlement prices that we use in connection
with the clearing of certain of our OTC derivative contracts. We
could face significant damages and changes to our business if
this litigation were determined adversely to us. See also
&#147;&#151;&nbsp;We may lose trading volume in our futures
business following the closure of our open-outcry trading
floor&#148; and &#147;&#151;&nbsp;Our principal competitor,
NYMEX, has filed claims of copyright and trademark infringement
against us, which, if determined adversely to us, would have a
material adverse effect on our business&#148;.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition to NYMEX, we currently compete with:
</DIV>

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    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    voice brokers active in the commodities markets, including
    Amerex, ICAP, Prebon Yamane and Tradition (North America);</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    other electronic energy trading platforms, such as NGX (a
    subsidiary of the Toronto Stock Exchange), HoustonStreet and
    Bloomberg PowerMatch;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    energy futures exchanges, such as European Energy Derivatives
    Exchange, or Endex (formerly known as Amsterdam Power Exchange),
    and Powernext; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    market data vendors, such as Bloomberg, Reuters, Argus and
    Platts (a division of The McGraw-Hill Companies Inc.).</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We may also face additional competition from new entrants to our
markets. Competition in the market for commodities trading could
increase if new electronic trading platforms or futures
exchanges are established, or if existing platforms or exchanges
that currently do not trade energy commodities products
</DIV>

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decide to do so. Additional competition from new entrants to our
markets could negatively impact our trading volumes and
profitability.
</DIV>

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In addition, some of the exchanges, trading systems, dealers and
other companies with which we currently or in the future could
compete are substantially larger than we are and have
substantially greater financial, technical, marketing and other
resources and more diverse revenue streams than we do. Some of
these exchanges and other businesses have long standing, well
established and, in some cases, dominant positions in their
existing markets. They may offer a broader range of products and
services than we do. In addition, our competitors may:
</DIV>

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    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    respond more quickly to new or evolving opportunities,
    technologies and participant requirements than we can;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    develop services and products similar to or that compete with
    ours;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    develop services and products that are preferred by our
    participants;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    price their products and services more competitively or respond
    more quickly to competitive pressures;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    take advantage of efficiencies that result from owning their own
    clearinghouses, including the ability to bring new cleared
    products to market faster and offering cross-margining
    opportunities across products that reduce the cost of capital
    for participants;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    develop and expand their network infrastructure and service
    offerings more efficiently;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    utilize better, more user-friendly and more reliable technology;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    consolidate and form alliances, which may create higher trading
    volumes, cost reductions and better pricing than we offer;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    more effectively market, promote and sell their products and
    services;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    better leverage existing relationships with participants and
    alliance partners or exploit better recognized brand names to
    market and sell their services.</TD>
</TR>

</TABLE>

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Our ability to continually maintain and enhance our
competitiveness and respond to threats from stronger current and
potential competitors will have a direct impact on our results
of operations. We cannot assure you that we will be able to
compete effectively. If our markets, products and services are
not competitive, our business, financial condition and operating
results will be materially affected. In addition, even if new
entrants do not significantly erode our market share, we may be
required to reduce significantly the rates we charge for trade
execution to remain competitive, which could have a material
adverse effect on our profitability.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B><I>Our business is primarily transaction-based, and declines
in trading volumes and market liquidity would adversely affect
our business and profitability.</I></B>
</DIV>

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We earn transaction fees for transactions executed in our
markets, from the provision of electronic trade confirmation
services and under order flow agreements shortfalls. We derived
83.9%, 86.9% and 94.7% of our consolidated revenues for 2004,
2003 and 2002, respectively, from our transaction-based
business. Of our consolidated revenues, 1.0%, 7.6% and 2.6% in
2004, 2003 and 2002, respectively, represented shortfall
payments made under order flow agreements with our Initial
Shareholders, the Gas and Power Firms and order flow agreements
in the OTC European gas markets, all of which are no longer in
effect. Even if we are able to further diversify our product and
service offerings, our revenues and profitability will continue
to depend primarily on our transaction-based business.
Accordingly, the occurrence of any event that reduces the amount
of transaction fees we receive, whether as a result of declines
in trading volumes or market liquidity, reductions in commission
rates or regulatory changes, will have a significant impact on
our operating results and profitability. See also
&#147;&#151;&nbsp;Our business depends in large part on
volatility in energy commodity prices and has benefited from
record-high oil prices in recent years&#148;.
</DIV>

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    <TD></TD>
    <TD>
    <B><I>Our business depends in large part on volatility in energy
    commodity prices and has benefited from record-high oil prices
    in recent years.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Participants in the markets for energy commodities trading
pursue a range of trading strategies. While some participants
trade in order to satisfy physical consumption needs, others
seek to hedge contractual price risk or take speculative or
arbitrage positions, seeking returns from price movements in
different markets. Trading volume is driven primarily by the
degree of volatility&nbsp;&#151; the magnitude and frequency of
fluctuations&nbsp;&#151; in prices of commodities. Higher
volatility increases the need to hedge contractual price risk
and creates opportunities for speculative or arbitrage trading.
Energy commodities markets historically have experienced
significant price volatility. We cannot predict whether this
pattern will continue, or for how long, or if this trend will
reverse itself. Were there to be a sustained period of stability
in the prices of energy commodities, we could experience lower
trading volumes, slower growth or even declines in revenues as
compared to recent periods.
</DIV>

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In addition to price volatility, we believe that the increase in
global energy prices, particularly for crude oil, during the
past three years has had a positive impact on the trading volume
of global energy commodities, including trading volume in our
markets. As oil prices have risen to record levels, we believe
that additional participants have entered the markets for energy
commodities trading to address their growing risk-management
needs or to take advantage of greater trading opportunities.
Were global crude oil prices to return to the lower levels where
they historically have been, it is possible that many market
participants, particularly the newer entrants, could reduce
their trading activity or leave the trading markets altogether.
Global energy prices are determined by many factors, including
those listed below, that are beyond our control and are
unpredictable. Consequently, we cannot predict whether global
energy prices will remain at their current levels, nor can we
predict the impact that these prices will have on our future
revenues or profitability.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Factors that are particularly likely to affect price volatility
and price levels, and thus trading volume, include:
</DIV>

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    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
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    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    economic, political and market conditions in the United States,
    Europe, the Middle East and elsewhere in the world;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    weather conditions;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the volatility in production volume of the commodities
    underlying our energy products and markets;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    war and acts of terrorism;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    legislative and regulatory changes;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    credit quality of market participants;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the availability of capital;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    broad trends in industry and finance;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the level and volatility of interest rates;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    fluctuating exchange rates and currency values;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    concerns over inflation.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Any one or more of these factors may reduce price volatility or
price levels in the markets for energy commodities trading,
which in turn could reduce trading activity in those markets,
including in our markets. Moreover, any reduction in trading
activity could reduce liquidity&nbsp;&#151; the ability to find
ready buyers and sellers at current prices&nbsp;&#151; which in
turn could further discourage existing and potential market
participants and thus accelerate any decline in the level of
trading activity in these markets. In these circumstances, the
markets with the highest trading volumes, and therefore the most
liquidity, would likely have a growing competitive advantage
over other markets. This could put us at a greater disadvantage
relative to our principal competitors, whose markets are larger
and more established than ours.
</DIV>

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We are unable to predict whether or when these unfavorable
conditions may arise in the future or, if they occur, how long
or severely they will affect our trading volumes. A significant
decline in our trading volumes, due to reduced volatility, lower
prices or any other factor, could have a material adverse effect
on our revenues, since our transaction fees would decline, and
in particular on our profitability, since our revenues would
decline faster than our expenses, many of which are fixed.
Moreover, if these unfavorable conditions were to persist over a
lengthy period of time, and our trading volumes were to decline
substantially and for a long enough period, the liquidity of our
markets&nbsp;&#151; and the critical mass of transaction volume
necessary to support viable markets&nbsp;&#151; could be
jeopardized.
</DIV>

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    <TD>
    <B><I>Our revenues depend heavily upon trading volumes in the
    markets for IPE Brent Crude futures contracts and OTC North
    American natural gas and power contracts. A decline in volumes
    or in our market share in these contracts would jeopardize our
    ability to remain profitable and grow.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our revenues depend heavily on trading volumes in the markets
for Brent Crude futures contracts and OTC North American natural
gas and power contracts. Trading in IPE Brent Crude futures
contracts accounted for 29.7%, 30.4% and 17.6% of our
consolidated revenues for 2004, 2003 and 2002, respectively.
Trading in North American natural gas contracts accounted for
26.8%, 17.9% and 33.3% of our consolidated revenues for 2004,
2003 and 2002, respectively. Trading in North American power
contracts accounted for 8.7%, 6.1% and 17.7% of our consolidated
revenues for 2004, 2003 and 2002, respectively. A decline in
trading volumes or in our market share in these markets,
including as a result of closing our open-outcry trading floor,
the relative stability of commodity prices, competition,
possible regulatory changes, and adverse publicity and
government investigations related to recent events in the North
American natural gas and power markets, could significantly
reduce our revenues and jeopardize our ability to remain
profitable and grow.
</DIV>

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In recent years, several of the largest and most active
participants in our North American natural gas and power markets
have terminated or substantially reduced their energy
commodities trading activities in light of increased regulatory
scrutiny and enforcement actions brought against certain market
participants. As a result, we are competing aggressively for new
participants, many of which have only recently begun trading in
our markets&nbsp;&#151; most notably financial institutions,
hedge funds and proprietary trading firms. Competition for these
new market entrants among exchanges and trading operations
across a variety of markets is intense.
</DIV>

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    <TD></TD>
    <TD>
    <B><I>A decline in the production of commodities traded in our
    markets could reduce our liquidity and adversely affect our
    revenues and profitability.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We derived 82.1%, 79.1% and 92.0% of our consolidated revenues
in 2004, 2003 and 2002, respectively, from exchange fees and
commission fees generated from trading in commodity products in
our futures and OTC markets. The volume of contracts traded in
the futures and OTC markets for any specific commodity tends to
be a multiple of the physical production of that commodity. If
the physical supply or production of any commodity declines, our
participants could become less willing to trade in contracts
based on that commodity. For example, the IPE Brent Crude
futures contract has been subject to this risk as production of
Brent Crude oil peaked in 1984 and began steadily falling in
subsequent years. We, in consultation with market participants,
altered the mechanism for settlement of the IPE Brent Crude
futures contract to a mechanism based on the Brent/ Forties/
Oseberg North Sea oil fields, known as the BFO Index, to ensure
that the commodity prices on which its settlement price is based
reflect a large enough pool of traders and trading activity so
as to be less susceptible to manipulation. Market participants
that trade in the IPE Brent Crude futures contract may determine
in the future, however, that additional underlying commodity
products need to be considered in the settlement of that
contract or that the settlement mechanism is not credible.
Exchange fees earned from trading in the IPE Brent Crude futures
contract accounted for 58.0%, 58.0% and 57.9% of our total
revenues from our futures business, net of intersegment fees, in
2004, 2003 and 2002, respectively, or 29.7%, 30.4% and 17.6% of
our consolidated revenues in 2004, 2003 and 2002, respectively.
Any uncertainty surrounding the settlement of the IPE Brent
Crude futures contract, or a decline in the physical supply or
production of any other commodity, could result in a decline in
trading volumes in our markets, adversely affecting our revenues
and profitability.
</DIV>

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    <TD></TD>
    <TD>
    <B><I>We may lose trading volume in our futures business
    following the closure of our open-outcry trading floor.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In response to the increasing acceptance and adoption of
electronic trading and to maintain and enhance our competitive
position in our futures business, we recently announced our
intention to close our open-outcry trading floor and fully
transfer all trading in futures contracts to our electronic
platform on April&nbsp;7, 2005.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Over the last several years, we have progressively transitioned
our futures business toward electronic execution. We introduced
early morning electronic trading in IPE Brent Crude futures
contracts on our electronic platform in February 2003, and
offered our market participants the opportunity to
simultaneously trade electronically or through the open-outcry
trading floor beginning in October 2003. On November&nbsp;1,
2004, we closed the morning open-outcry trading session in IPE
Brent Crude futures contracts, thereby making electronic trading
the exclusive means for trading the IPE Brent Crude futures
contract during the morning session. From November&nbsp;1, 2004
to February&nbsp;28, 2005, electronic trading has represented on
average&nbsp;26.9% of overall IPE Brent Crude futures trading
volumes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We cannot assure you that the market will accept our decision to
offer our electronic platform as the sole forum for trading the
contracts that are currently traded both electronically and
through our open-outcry trading floor, or that we will be able
to maintain our market share and liquidity in our products. As a
result of our decision to close the open-outcry trading floor,
traders who currently trade on our physical exchange floor or
prefer the open-outcry method of trading may not transfer their
trading to our electronic platform and may seek an alternate
trading venue. In November 2004, NYMEX opened an open-outcry
trading floor in Dublin for trading in Brent Crude futures
contracts. In addition, if NYMEX launches an open-outcry trading
floor in London as announced, NYMEX&#146;s trading floor may be
more attractive to these traders, who may migrate their trading
to NYMEX from our electronic platform. NYMEX may also offer
incentives that we are unable to match to traders to trade on
their Dublin or London open-outcry trading floors, as it has
done in the past. Any decline in our trading volumes as a result
of the floor closure will negatively impact our transaction fees
and, therefore, our revenues. We have derived a substantial
portion of our futures business revenues from transaction fees
generated from trades executed on our open-outcry trading floor.
In 2004, only 6.9% of our gross transaction fees and only 4.3%
of our net transaction fees in our futures business segment were
derived from exchange fees generated by trades executed on our
electronic platform. Declining trading volumes may also make our
futures markets less liquid than those of competing markets that
trade exclusively on an open-outcry trading floor or on both an
open-outcry trading floor and an electronic platform. Over time,
this decision may prove to be ineffective and costly to us and
could ultimately adversely affect our profitability and
competitive position. We also expect to incur charges, primarily
in the second quarter of 2005, ranging from $6.0&nbsp;million to
$8.0&nbsp;million in connection with the closure of the
open-outcry trading floor. See also &#147;&#151;&nbsp;We face
intense competition from regulated exchanges, voice brokers and
other electronic platforms, which could adversely affect our
business. If we are not able to compete successfully, our
business will not survive&#148;.
</DIV>

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    <TD></TD>
    <TD>
    <B><I>Our principal competitor, NYMEX, has filed claims of
    copyright and trademark infringement against us, which, if
    determined adversely to us, would have a material adverse effect
    on our business.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
NYMEX, a regulated commodity futures exchange and our principal
competitor, sued us in federal district court in November 2002
asserting that we are violating its intellectual property
rights. NYMEX&#146;s principal claim alleges copyright
infringement by us on the basis of our use of NYMEX&#146;s
publicly available settlement prices in two of our cleared OTC
contracts. NYMEX also has alleged that we are infringing and
diluting its trademark rights by referring to NYMEX trademarks
in certain of our swap contract specifications and that we have
tortiously interfered with a contract between NYMEX and the data
provider that provides us with the NYMEX settlement prices
pursuant to a license. These settlement prices constitute the
end-of-day market values used by NYMEX to clear on a daily basis
and to settle at expiration certain commodity futures contracts,
and options on those contracts, traded on NYMEX. We offer
trading on our electronic platform in two cleared OTC swaps
contracts&nbsp;&#151; West Texas Intermediate, or WTI, crude oil
and Henry Hub natural gas&nbsp;&#151; that are settled at
expiration and cleared at the end of each trading day based on
prices determined by us through reference to NYMEX settlement
prices. We derived 17.2%, 5.6% and 0.8% of our consolidated
revenues in 2004, 2003 and 2002, respectively, from
WTI&nbsp;crude oil and Henry Hub natural gas contracts cleared
and settled on the basis of, or by reference to, NYMEX
settlement prices. NYMEX has alleged in its
</DIV>

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complaint that the settlement prices published by NYMEX are
subject to copyright protection, and that we are infringing on
its rights by using or referring to these settlement prices in
our cleared business. NYMEX has demanded that we stop these
practices and seeks to permanently enjoin us from using or
referring to these settlement prices. This case is presently
pending before the court on cross-motions for summary judgment
filed by us and NYMEX, and no trial date has been set.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We are vigorously defending this lawsuit. While we do not
believe that we infringe any intellectual property rights of
NYMEX or that we have tortiously interfered with any contract of
NYMEX, we cannot assure you that we will prevail in this action.
If we are found to have infringed NYMEX&#146;s intellectual
property rights, in whole or in part, through our use of
NYMEX&#146;s settlement prices or references to NYMEX in our
contract specifications, we may incur substantial monetary
damages and we may be enjoined permanently from using or
referring to one or more types of NYMEX settlement prices.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If we are enjoined from using or referring to NYMEX settlement
prices, we could lose all or a substantial portion of our
cleared trading volume in WTI crude oil and Henry Hub natural
gas contracts and the related commission fee revenues. We
describe this matter in greater detail under the heading
&#147;Regulation and Legal Proceedings&#148;.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B><I>Many of our current shareholders are also our participants
and their interests may differ from those of other
shareholders.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Many of our Initial Shareholders and the Gas and Power Firms are
both our principal shareholders and participants in our markets.
These investors, collectively, will own
approximately &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
of our outstanding common stock upon the closing of this
offering. Revenues from these investors accounted for 23.3%,
45.8% and 60.8% of our revenues generated by our OTC business,
net of intersegment fees, in 2004, 2003 and 2002, respectively.
Revenues from all our shareholders that own in excess of 1% of
our outstanding common stock accounted for 27.1%, 36.3% and
50.6% of our consolidated revenues in 2004, 2003 and 2002,
respectively. As participants, these shareholders may have
strategic interests that are different from, or that could
conflict with, your interests. For example, in their capacity as
participants, these investors may favor lower fees for trade
execution or other concessions that would presumably reduce our
revenues, and therefore, the value of your ownership position in
us. In addition, two of the Initial Shareholders are affiliated
with Morgan Stanley&nbsp;&#38; Co. Incorporated and Goldman,
Sachs&nbsp;&#38; Co., the lead underwriters for this offering.
</DIV>

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    <TD></TD>
    <TD>
    <B><I>We rely on LCH.Clearnet to provide clearing services for
    the trading of futures and cleared OTC contracts in our markets.
    We cannot continue to operate our futures business without
    clearing services.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have contracted with LCH.Clearnet, to provide clearing
services to us for all futures contracts traded in our markets
pursuant to a contract for an indefinite term that is terminable
by either party upon one year&#146;s notice, if not otherwise
terminated in accordance with its terms. LCH.Clearnet also
provides clearing services to participants in our OTC business
that trade designated contracts eligible for clearing. These
services are provided pursuant to a separate contract we have
entered into with LCH.Clearnet, which continues in force unless
either party gives one year&#146;s written notice. Our cleared
OTC contracts have become a significant component of our
business, and accounted for 44.5%, 13.4% and 1.4% of the
revenues, net of the intersegment fees, generated by our OTC
business in 2004, 2003 and 2002, respectively.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The interruption or cessation of these clearing services and our
inability to make alternate arrangements in a timely manner
could have a material adverse effect on our business, financial
condition and results of operations. In particular, if our
agreement with LCH.Clearnet with respect to our futures business
were terminated, and we could not obtain clearing services from
another source, we may be unable to operate a futures market and
would likely be required to cease operations in that segment of
our business. In 2004, 2003 and 2002, transaction fees generated
in our futures business, which are also referred to as exchange
fees, accounted for 42.0%, 42.6% and 25.1%, respectively, of our
consolidated revenues.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If our agreement with LCH.Clearnet relating to OTC trading were
terminated, we may be unable to offer clearing services in
connection with our OTC business for a considerable period of
time. While we would still be able to offer OTC trading in
bilateral contracts, our inability to offer trading in cleared
contracts, assuming
</DIV>

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that no other clearing alternatives were available, could
significantly impair our ability to compete, particularly in
light of the launch of a competing swaps-to-futures clearing
facility by one of our competitors. In 2004, 2003 and 2002,
transaction fees derived from trading in cleared OTC contracts
accounted for 21.7%, 6.4% and 0.9%, respectively, of our
consolidated revenues. Our principal competitors own their own
clearing facilities and thus do not face the risk of losing the
ability to provide clearing services to participants that we do.
Moreover, because they own their own facilities, they may be
able to provide clearing services more cost-effectively and can
extend them to new products faster than we can. The number of
clearing facilities that are not owned by our competitors is
limited, and developing our own clearing facility would be
costly and time consuming. Requiring our participants to change
clearing facilities would also be disruptive and costly.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
LCH.Clearnet could elect for strategic reasons to discontinue
providing clearing services to us for our futures and OTC
businesses at any time with appropriate notice. For example,
LCH.Clearnet could decide to enter into a strategic alliance
with a competing exchange or other trading facility. In
addition, according to the terms of our contract with
LCH.Clearnet with respect to our OTC business, our relationship
may be terminated upon a change in control of either party. The
commodity markets have experienced increased consolidation in
recent years and may continue to do so, and strategic alliances
and changes in control involving various market participants are
possible. LCH.Clearnet is owned by its members, which include
banks and other financial institutions whose commercial
interests are broader than the clearing services business. We
cannot assure you that our futures or OTC businesses would be
able to obtain clearing services from an alternate provider on
acceptable terms or in sufficient time to avoid or mitigate the
material adverse effects described above.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B><I>We are currently subject to oversight in the United States
and regulation in the United Kingdom. Failure to comply with
existing regulatory requirements, and possible future changes in
these requirements, could adversely affect our business.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We operate our electronic platform as an &#147;exempt commercial
market&#148;, or ECM, under the Commodity Exchange Act. As such,
we are subject to access, reporting and record-keeping
requirements of the CFTC. However, unlike a futures exchange,
our OTC business is not generally regulated by the CFTC. In
contrast, the IPE, through which we conduct our futures
business, operates as a Recognized Investment Exchange, or RIE,
in the United Kingdom. As an RIE, the IPE has regulatory
responsibility in its own right and is subject to regulation by
the Financial Services Authority, or FSA, pursuant to the
Financial Services and Markets Act 2000, or FSMA. The IPE is
required under the FSMA to maintain sufficient financial
resources, adequate systems and controls and effective
arrangements for monitoring and disciplining its members. The
IPE&#146;s ability to comply with all applicable laws and rules
is largely dependent on its maintenance of compliance, audit and
reporting systems. We cannot assure you that these systems and
procedures are fully effective. Failure to comply with our
regulatory requirements could subject us to significant
penalties, including termination of our ability to conduct our
regulated businesses.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Future legislative and regulatory initiatives, either in the
United States, the United Kingdom or elsewhere, could affect one
or more of the following aspects of our business:
</DIV>

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    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
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    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the manner in which we communicate and contract with our
    participants;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the pricing of our products;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    a requirement that we maintain minimum regulatory capital on
    hand;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    a requirement that we exercise regulatory oversight with respect
    to our OTC participants, and assume responsibility for their
    conduct;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    a requirement that we implement systems and procedures to
    maintain and enforce compliance by our OTC participants;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    our financial and regulatory reporting practices;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    our record-keeping and record-retention procedures;</TD>
</TR>

</TABLE>

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    <TD width="1%"></TD>
    <TD width="96%"></TD>
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    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the licensing of our employees;&nbsp;and</TD>
</TR>

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    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

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    <TD>&nbsp;</TD>
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    <TD align="left">
    the conduct of our directors, officers, employees and affiliates.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The implementation of new regulations or unfavorable
interpretations of existing regulations by courts or regulatory
bodies could require us to incur significant compliance costs
and impede our ability to operate, expand and enhance our
electronic platform as necessary to remain competitive and
expand our business. Regulatory changes inside or outside the
United States or the United Kingdom could materially and
adversely affect our business, financial condition and results
of operations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B><I>The OTC commodities trading industry in North America has
been subject to increased regulatory scrutiny in the recent
past, and we face the risk of changes to our regulatory
environment in the future, which may diminish trading volumes on
our electronic platform.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our OTC business is currently subject to only limited regulatory
oversight. As an ECM, we are not subject to registration as an
exchange nor to the type of ongoing comprehensive oversight to
which exchanges are subject. Instead, we are required to comply
with access, reporting and record-keeping requirements of the
CFTC. In recent years, however, the market for OTC energy
commodities trading has been the subject of increased scrutiny
by regulatory and enforcement authorities due to a number of
highly publicized problems involving energy commodities trading
companies. This increased scrutiny has included investigations
by the Department of Justice, the Federal Energy Regulatory
Commission, or the FERC, and the Federal Trade Commission of
alleged manipulative trading practices, misstatements of
financial results, and other matters. As a result of the
foregoing, in 2002 several significant participants in the
energy trading markets shut down their operations and exited the
trading markets. Primarily as a result of this, our trading
volumes declined from 44.0&nbsp;million contracts in 2002 to
24.3&nbsp;million contracts in 2003, and while volumes have
since rebounded to 31.0&nbsp;million in 2004, they have not
returned to our 2002 levels.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In connection with the above referenced investigations,
governmental bodies became concerned that various market
participants may have used our electronic platform, among other
venues such as voice brokers, to conduct potentially
manipulative trading activity, and, during this time, we were
required to provide extensive information to the authorities in
connection with their investigations. This process was costly
and the resulting publicity may have discouraged other
participants or potential participants from using our platform.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Furthermore, in the wake of suggestions that manipulative
trading practices by certain market participants may have
contributed to unseasonably high prices in the wholesale power
market in California and other western states in the summer of
2000, and in response to a number of other factors, including
the collapse of Enron Corporation, legislative and regulatory
authorities at both the federal and state levels, as well as
political and consumer groups, called for increased regulation
and monitoring of the OTC commodities markets in general and the
North American power and natural gas markets (currently our most
important OTC markets), in particular. For example, regulators
in some states publicly questioned whether some form of
regulation, including price controls, should be reimposed in OTC
commodities markets, particularly in states where power markets
were deregulated in recent years. In addition, members of
Congress have, at various times in the last several years,
introduced bills seeking to restrict OTC trading of energy
derivatives contracts generally and to bring electronic trading
of energy within the direct scope of CFTC regulation.
Furthermore, in 2002, the FERC introduced rules requiring that
public utilities and power marketers file quarterly reports
about their power trading activities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We cannot assure you that future unanticipated events in the
markets for energy commodities trading will not lead to a
recurrence of such regulatory scrutiny or to changes in the
level of regulation to which our OTC business is subject.
Increased regulation of our participants or our markets could
materially adversely affect our business. The imposition of
stabilizing measures such as price controls in the power or
other commodities markets could substantially reduce or
potentially even eliminate trading activity in affected markets.
New laws and rules applicable to our business could
significantly increase our regulatory compliance costs, delay or
prevent us from introducing our products and services as planned
and discourage some market participants from using our
electronic platform. New allegations of manipulative trading by
market participants could subject us to regulatory scrutiny and
possibly fines or restrictions on our business, as well as
adverse publicity.
</DIV>

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All of this could lead to lower trading volumes and transaction
fees, higher operating costs and lower profitability or losses.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B><I>If we are unable to keep up with rapid changes in
technology and participant preferences, we may not be able to
compete effectively.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
To remain competitive, we must continue to enhance and improve
the responsiveness, functionality, accessibility and reliability
of our electronic platform and our proprietary technology. The
financial services industry is characterized by rapid
technological change, change in use patterns, change in client
preferences, frequent product and service introductions and the
emergence of new industry standards and practices. These changes
could render our existing proprietary technology uncompetitive
or obsolete. The continued growth of our business and our
ability to pursue our strategic objectives will depend, in part,
on our ability to:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
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    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    enhance our existing services and maintain and improve the
    functionality and reliability of our electronic platform;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    develop or license new technologies that address the
    increasingly sophisticated and varied needs of our participants;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    anticipate and respond to technological advances and emerging
    industry practices on a cost-effective and timely basis;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    continue to attract and retain highly skilled technology staff
    to maintain and develop our existing technology and to adapt to
    and manage emerging technologies.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We cannot assure you that we will successfully implement new
technologies or adapt our proprietary technology to our
participants&#146; requirements or emerging industry standards
in a timely and cost-effective manner. Any failure on our part
to remain abreast of industry standards in technology and to be
responsive to participant preferences could cause our market
share to decline and negatively impact our profitability.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B><I>Our operating results are subject to significant
fluctuations due to a number of factors. As a result, you will
not be able to rely on our operating results in any particular
period as an indication of our future performance.</I></B>
</DIV>

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A number of factors beyond our control may contribute to
substantial fluctuations in our operating results&nbsp;&#151;
particularly in our quarterly results. As a result of the
factors described in the preceding risk factors, you will not be
able to rely on our operating results in any particular period
as an indication of our future performance. The energy
commodities trading industry has historically been subject to
variability in trading volumes due primarily to five key
factors. These factors include geopolitical events, weather,
real and perceived supply and demand imbalances in the
underlying energy commodities, the number of trading days in a
quarter and seasonality. As a result of one or more of these
factors, trading volumes in our markets could decline, possibly
significantly, which would adversely affect our revenues derived
from transaction fees. If we fail to meet securities
analysts&#146; expectations regarding our operating performance,
the price of our common stock could decline substantially. See
also &#147;&#151;&nbsp;Risks Relating to this
Offering&nbsp;&#151; The market price of our common stock may
fluctuate significantly, and it may trade at prices below the
initial public offering price&#148;.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B><I>Our cost structure is largely fixed. If our revenues
decline and we are unable to reduce our costs, our profitability
will be adversely affected.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our cost structure is largely fixed. We base our expectations of
our cost structure on historical and expected levels of demand
for our products and services as well as our fixed operating
infrastructure, such as computer hardware and software, hosting
facilities and security and staffing levels. If demand for our
products and services decline and, as a result, our revenues
decline, we may not be able to adjust our cost structure on a
timely basis. In that event, our profitability will be adversely
affected.
</DIV>

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    <TD>
    <B><I>We have been accused of patent infringement by EBS Dealing
    Resources.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In January 2004, EBS Dealing Resources, Inc., or EBS, sued us in
the U.S.&nbsp;District Court for the Southern District of New
York. EBS&#146; complaint alleges that we infringed two of its
patents relating to the way in which bids and offers are
displayed on an electronic trading system in a manner that
permits parties to act only on those bids and offers from
counterparties with whom the party has available credit. EBS
claims that the credit filter functionality of our trading
platform infringes EBS&#146; patented systems and methods for
displaying a so-called &#147;dealable price&#148;.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
While we believe that our platform does not infringe EBS&#146;
patents and are vigorously defending this action, we cannot
assure you that we will prevail and that this litigation will be
resolved in our favor. A claim construction hearing, in which
the scope of EBS&#146; patents will be construed by the court,
is scheduled for May&nbsp;2005, and trial is scheduled for
February&nbsp;2006. The outcome of the claim construction
hearing, including a broad construction of EBS&#146; patents
(which would generally favor EBS) or a narrow construction
(which would generally favor us), could have a significant
impact on this action. A broad construction of EBS&#146; patents
may reduce the number of arguments we have regarding
non-infringement. If this litigation is resolved in a manner
adverse to us, we may be required to pay substantial damages to
EBS and cease using the credit filter on our electronic
platform. If we are enjoined from using our credit filter
technology, we might attempt to negotiate a royalty bearing
license with EBS for the continued use of our credit filter
technology if such a license were available on reasonable terms.
The payment of damages, discontinuation of our use of this
technology or payment of royalties to EBS could have a material
adverse effect on our business, financial condition and results
of operations. In addition, EBS has additional patent
applications pending in the United States&nbsp;Patent and
Trademark Office that may form the basis for future suits.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B><I>Fluctuations in currency exchange rates may adversely
affect our operating results.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We currently generate a significant portion of our revenues and
net income and corresponding accounts receivable and cash
through sales denominated in pounds sterling, which is the
functional currency of our foreign subsidiaries. Of our
consolidated revenues, 46.1%, 47.1% and 33.7% were denominated
in pounds sterling in 2004, 2003 and 2002, respectively, and we
expect our exposure to foreign currency exchange risk to
increase to the extent we are able to expand our futures
business. We have foreign currency translation risk equal to our
net investment in these subsidiaries. As of December&nbsp;31,
2004, $46.0&nbsp;million of our cash and cash equivalents,
$4.5&nbsp;million of our accounts receivable, $85.6&nbsp;million
of our goodwill and other intangible assets and
$134.0&nbsp;million of our net assets were denominated in pounds
sterling.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We also have foreign currency transaction risk related to the
settlement of foreign receivables or payables incurred with
respect to trades executed on our electronic platform, including
for our OTC European gas and power markets, which are paid in
pounds sterling, and for cash accounts of our
U.K.&nbsp;subsidiaries held in U.S.&nbsp;dollars. For example,
we had foreign currency transaction losses of $1.4&nbsp;million,
$644,000 and $149,000 in 2004, 2003 and 2002, respectively.
While we currently enter into hedging transactions to help
mitigate our foreign exchange risk exposure, primarily with
respect to our net investment in our U.K.&nbsp;subsidiaries,
these hedging arrangements may not always be effective,
particularly in the event of imprecise forecasts of the levels
of our non-U.S.&nbsp;denominated assets and liabilities.
Accordingly, if there is an adverse movement in exchange rates,
we may suffer significant losses, which would adversely affect
our operating results and financial condition.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B><I>Any infringement by us on the intellectual property rights
of others could result in litigation and adversely affect our
ability to continue to provide, or increase the cost of
providing, our products and services.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Patents and other intellectual property rights of third parties
may have an important bearing on our ability to offer certain of
our products and services. Our competitors as well as other
companies and individuals may have obtained, and may be expected
to obtain in the future, patent rights related to the types of
products and services we offer or plan to offer. We cannot
assure you that we are or will be aware of all patents that may
pose a risk of infringement by our products and services. In
addition, some patent applications in the United States are
confidential until a patent is issued, and therefore we cannot
evaluate the extent to which our
</DIV>

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products and services may be covered or asserted to be covered
in pending patent applications. Thus, we cannot be sure that our
products and services do not infringe on the rights of others or
that others will not make claims of infringement against us. In
general, if one or more of our products or services is found to
infringe patents held by others, we may be required to stop
developing or marketing the products or services, to obtain
licenses to develop and market the services from the holders of
the patents or to redesign the products or services in such a
way as to avoid infringing the patents. We also could be
required to pay damages if we were found to infringe patents
held by others, which could materially adversely affect our
business, financial condition and operating results. We cannot
assess the extent to which we may be required in the future to
obtain licenses with respect to patents held by others, whether
such licenses would be available or, if available, whether we
would be able to obtain such licenses on commercially reasonable
terms. If we were unable to obtain such licenses, we may not be
able to redesign our products or services at a reasonable cost
to avoid infringement, which could materially adversely affect
our business, financial condition and operating results. See
also &#147;&#151;&nbsp;Our principal competitor, NYMEX, has
filed claims of copyright and trademark infringement against us,
which, if determined adversely to us, would have a material
adverse effect on our business&#148; and &#147;&#151;&nbsp;We
have been accused of patent infringement by EBS Dealing
Resources&#148;.
</DIV>

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    <TD></TD>
    <TD>
    <B><I>Some of the proprietary technology we employ may be
    vulnerable to infringement by others.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our business is dependent on proprietary technology and other
intellectual property that we own or license from third parties.
Despite precautions we have taken or may take to protect our
intellectual property rights, third parties could copy or
otherwise obtain and use our proprietary technology without
authorization. It may be difficult for us to monitor
unauthorized use of our intellectual property. We cannot assure
you that the steps that we have taken will prevent
misappropriation of our proprietary technology or intellectual
property.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have filed U.S.&nbsp;patent applications for our electronic
trade confirmation service, our method to allow a participant to
engage in program trading while protecting its data, referred to
as ICEMaker, and our method for displaying both cleared and
bilateral OTC contracts in single price stream. We have also
filed patent applications in the European Patent Office and
Canada for our electronic trade confirmation service and our
method for displaying cleared and bilateral OTC contracts in a
single price stream, as well as having made a filing under the
Patent Cooperation Treaty with respect to ICEMaker. We cannot
assure you that we will obtain any final patents covering these
services, nor can we predict the scope of any patents issued. In
addition, we cannot assure you that any patent issued will be
effective to protect this intellectual property against
misappropriation. Third parties in Europe or elsewhere could
acquire patents covering this or other intellectual property for
which we obtain patents in the United States, or equivalent
intellectual property, as a result of differences in local laws
affecting patentability and patent validity. Third parties in
other jurisdictions might also misappropriate our intellectual
property rights with impunity, if intellectual property
protection laws are not actively enforced in those
jurisdictions. Patent infringement and/or the grant of parallel
patents would erode the value of our intellectual property.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have secured trademark registrations for
&#147;IntercontinentalExchange&#148;, &#147;ICE&#148; and our
globe design from the United States Patent and Trademark Office,
as well as registrations for other trademarks we use in our
business. We also have several U.S. and foreign applications
pending for other trademarks we use in our business. We cannot
assure you that any of these marks for which applications are
pending will be registered.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We may have to resort to litigation to enforce our intellectual
property rights, protect our trade secrets, determine the
validity and scope of the intellectual property rights of others
or defend ourselves from claims of infringement. We may not
receive an adequate remedy for any infringement of our
intellectual property rights, and we may incur substantial costs
and diversion of resources and the attention of management as a
result of litigation, even if we prevail. As a result, we may
choose not to enforce our infringed intellectual property
rights, depending on our strategic evaluation and judgment
regarding the best use of our resources, the relative strength
of our intellectual property portfolio and the recourse
available to us.
</DIV>

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    <TD>
    <B><I>Our limited operating history may make it difficult to
    evaluate our future prospects, may increase the risk that we
    will not continue to be successful and may increase the risk of
    your investment.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We began operations in 2000. As a result, we have a limited
operating history for you to evaluate in assessing our future
prospects. In addition, while the IPE was established in 1980,
we did not begin to operate the IPE until we acquired the IPE in
June 2001 and integrated it into our business. We also have not
previously offered trading in futures contracts or options on
futures contracts exclusively on our electronic platform.
Accordingly, our historic and recent financial results may not
be representative of what they may be in the future. We cannot
assure you that our growth will continue at the same rate or at
all, or that we will not experience declines in revenues and
profitability in the future. You must consider our business and
prospects in light of the risks and difficulties we will
encounter as an early-stage company with a limited operating
history.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B><I>We face significant challenges in implementing our
strategic goals of expanding product and service offerings and
attracting new market participants to our markets. If we do not
meet these challenges, we may not be able to increase our
revenues or remain profitable.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We seek to expand the range of commodity products that can be
traded in our markets and to ensure that trading in those new
products becomes liquid within a sufficiently short period of
time to support viable trading markets. In meeting these
strategic goals, however, we face a number of significant
challenges, including the following:
</DIV>

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    <TD width="1%"></TD>
    <TD width="96%"></TD>
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    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    To introduce new cleared contracts, we must first obtain the
    approval of LCH.Clearnet, our provider of clearing services. The
    timing of LCH.Clearnet&#146;s approval may prevent us from
    bringing new cleared contracts to market as quickly as some of
    our competitors. The approval of LCH.Clearnet and the timing of
    its receipt will depend upon the type of product proposed, the
    type and extent of system modification required to establish
    clearing functionality for the relevant product and the
    integration of the new contract with our electronic platform and
    other challenges posed. This could result in a substantial delay
    between development of a cleared contract and its offering on
    our electronic platform.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    When we introduced new OTC products initially, we obtained order
    flow commitments from leading market participants, which were
    instrumental in the development of liquid markets for those
    products. However, we do not intend to obtain comparable
    commitments with regard to new products that we introduce, which
    could make successful development of new trading markets
    particularly uncertain.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    To expand the use of our electronic platform and to introduce
    new trading-related services, we must develop additional systems
    technology that will interface successfully with the wide
    variety of unique internal systems used by our participants.
    These challenges may involve unforeseen costs and delays.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    As an early-stage company, we must continue to build significant
    brand recognition among commodities market participants in order
    to attract new participants to our markets. This will require us
    to increase our marketing expenditures. The cost of our
    marketing efforts may be greater than we expect, and we cannot
    assure you that these efforts will be successful.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Even if we resolve these issues and are able to introduce new
products and services, there is no assurance that they will be
accepted by our participants, attract new market participants,
or be competitive with those offered by other companies. If we
do not succeed in these efforts on a consistent, sustained
basis, we will be unable to implement our strategic objectives.
This would seriously jeopardize our ability to increase and
diversify our revenues, remain profitable and continue as a
viable competitor in our markets.
</DIV>

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    <TD></TD>
    <TD>
    <B><I>Reductions in our commission rates resulting from
    competitive pressures could lower our revenues and
    profitability.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We expect to experience pressure on our commission rates as a
result of competition we face in our futures and OTC markets.
Some of our competitors offer a broader range of products and
services to a larger participant base, and enjoy higher trading
volumes, than we do. Consequently, our competitors may be able
and willing to offer commodity trading services at lower
commission rates than we currently offer or may be
</DIV>

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able to offer. As a result of this pricing competition, we could
lose both market share and revenues. We believe that any
downward pressure on commission rates would likely continue and
intensify as we continue to develop our business and gain
recognition in our markets. A decline in commission rates could
lower our revenues, which would adversely affect our
profitability.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For example, we have offered our trade execution services to
market participants without charge for trading WTI crude oil
bullets in our OTC market in an effort to increase the liquidity
of this market. This fee waiver began in November 2004 and
extends through the end of 2005. We recognized $113,000,
$240,000 and $858,000 in commission fee revenues for WTI crude
oil bullet contracts in 2004, 2003 and 2002, respectively.
Similar efforts by us or our competitors in the future could
have an adverse effect on our profitability.
</DIV>

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    <TD></TD>
    <TD>
    <B><I>Our business may be harmed by computer and communications
    systems failures and delays.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We support and maintain many of the systems that comprise our
electronic platform. Our failure to monitor or maintain these
systems, or to find replacements for defective components within
a system in a timely and cost-effective manner when necessary,
could have a material adverse effect on our ability to conduct
our business. Our systems are located primarily in Atlanta,
Georgia and our backup facilities fully replicate our primary
data center. Our redundant systems or disaster recovery plans
may prove to be inadequate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our systems, or those of our third party providers, may fail or,
due to capacity constraints, may operate slowly, causing one or
more of the following:
</DIV>

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    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    unanticipated disruption in service to our participants;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    slower response time and delays in our participants&#146; trade
    execution and processing;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    failed settlement by participants to whom we provide trade
    confirmation or clearing services;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    incomplete or inaccurate accounting, recording or processing of
    trades;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    our distribution of inaccurate or untimely market data to
    participants who rely on this data in their trading
    activity;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    financial loss.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We could experience system failures due to power or
telecommunications failures, human error on our part or on the
part of our vendors or participants, natural disasters, fire,
sabotage, hardware or software malfunctions or defects, computer
viruses, intentional acts of vandalism or terrorism and similar
events. In these instances, our disaster recovery plan may prove
ineffective. If any one or more of these situations were to
arise, they could result in participant dissatisfaction with our
electronic platform, prompting participants to trade elsewhere,
or exposure to litigation or regulatory sanctions. As a
consequence, our business, financial condition and results of
operations could suffer materially.
</DIV>

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<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Our systems and those of our third party service providers
    may be vulnerable to security risks, which could result in
    wrongful use of our information, or which could make our
    participants reluctant to use our electronic platform.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We regard the secure transmission of confidential information on
our electronic platform as a critical element of our operations.
Our networks and those of our participants and our third party
service providers, including LCH.Clearnet, may, however, be
vulnerable to unauthorized access, computer viruses, firewall or
encryption failures and other security problems. We may be
required to expend significant resources to protect ourselves
and our participants against the threat of security breaches or
to alleviate problems caused by security breaches. Although we
intend to continue to implement industry standard security
measures, we cannot assure you that those measures will be
sufficient to protect our business against losses or any reduced
trading volume incurred in our markets as a result of any
significant security breaches on our platform.
</DIV>

<P align="center" style="font-size: 10pt;">22

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>We rely on specialized management and employees.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our future success depends, in part, upon the continued
contributions of our executive officers and key employees who we
rely on for executing our business strategy and identifying new
strategic initiatives. These individuals possess extensive
experience in the energy commodities trading industry and
financial services markets generally, and possess extensive
technology skills. We have entered into employment agreements
with our executive officers, including our chief executive
officer, our chief operating officer, our chief financial
officer, our chief technology officer, our vice presidents, our
futures business chief executive officer, as well as certain
other employees responsible for product development and
technological development within our company. It is possible,
however, that one or more of these persons could voluntarily
terminate their employment agreements with us. Any loss or
interruption of the services of our executive officers or key
product development or technology personnel could result in our
inability to manage our operations effectively or to execute our
business strategy. We cannot assure you that we would be able to
find appropriate replacements for these key personnel if the
need arose. We may have to incur significant costs to replace
key employees who leave, and our ability to execute our business
strategy could be impaired if we cannot replace departing
employees in a timely manner. Competition in our industry for
persons with trading industry and technology expertise is
intense.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>We rely on third party providers and other suppliers for a
    number of services that are important to our business. An
    interruption or cessation of an important service or supply by
    any third party could have a material adverse effect on our
    business.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition to our dependence on LCH.Clearnet as a clearing
service provider, we depend on a number of suppliers, such as
online service providers, hosting service and software
providers, data processors, software and hardware vendors,
banks, and telephone companies, for elements of our trading,
clearing and other systems. For example, we rely on LIFFE
Services Company Limited for the provision of a trade
registration system that routes trades executed in our markets
to LCH.Clearnet for clearing. Both LIFFE Services Company
Limited and its parent company, Euronext N.V., are potential
competitors to both our futures business and our OTC business,
which may affect LIFFE&#146;s willingness to continue to provide
these services in the future. In addition, we rely on a large
international telecommunications company for the provision of
hosting services. If this company were to discontinue providing
these services to us, we would likely experience significant
disruption to our business until we were able to establish
connectivity with another provider.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We cannot assure you that any of these providers will be able to
continue to provide these services in an efficient,
cost-effective manner or that they will be able to adequately
expand their services to meet our needs. An interruption in or
the cessation of an important service or supply by any third
party and our inability to make alternative arrangements in a
timely manner, or at all, would result in lost revenues and
higher costs.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, our participants may access our electronic platform
through seven ISVs, which represent a substantial portion of the
ISVs that serve the commodities markets. The loss of a
significant number of ISVs providing access could make our
platform less attractive to participants who prefer this form of
access.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>As a financial service provider, we are subject to
    significant litigation and liability risks.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Many aspects of our business, and the businesses of our
participants, involve substantial risks of liability. These
risks include, among others, potential liability from disputes
over terms of a trade, the claim that a system failure or delay
caused monetary loss to a participant or that an unauthorized
trade occurred. For example, dissatisfied participants that have
traded on our electronic platform, or those on whose behalf our
participants have traded, may make claims regarding the quality
of trade execution, or alleged improperly confirmed or settled
trades, abusive trading practices, security and confidentiality
breaches, mismanagement or even fraud against us or our
participants. In addition, because of the ease and speed with
which sizable trades can be executed on our electronic platform,
participants can lose substantial amounts by inadvertently
entering trade orders or by entering them inaccurately. A large
number of significant error trades could result in participant
dissatisfaction.
</DIV>

<P align="center" style="font-size: 10pt;">23
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As a result, we could incur significant legal expenses defending
claims against us, even those without merit. The adverse
resolution of any lawsuits or claims against us could result in
our obligation to pay substantial damages, and cause us
reputational harm. Our participants may face similar legal
challenges, and these challenges could affect their ability or
willingness to trade on our electronic platform. The initiation
of lawsuits or other claims against us, or against our
participants with regard to their trading activities, could
adversely affect our business, financial condition and results
of operations, whether or not these lawsuits or other claims are
resolved in our favor. If we violate the terms and provisions of
the Commodity Exchange Act under which we operate our OTC
business, or if the CFTC concludes or believes we have violated
other provisions of the Commodity Exchange Act, we could also be
exposed to substantial liability. See also &#147;&#151;&nbsp;We
are currently subject to oversight in the United States and
regulation in the United Kingdom. Failure to comply with
existing regulatory requirements, and possible future changes in
these requirements, could adversely affect our business&#148;.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>If we are compelled to monitor our OTC participants&#146;
    compliance with applicable standards, our operating expenses and
    exposure to private litigation could increase.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
While we have self regulatory status in our futures business, we
currently do not assume responsibility for enforcing compliance
with applicable commercial and legal standards by our
participants when they trade OTC contracts in our markets. If we
determined that it was necessary to undertake such a role in
respect of OTC products&nbsp;&#151; for example, to deter
unfavorable regulatory actions, to respond to regulatory actions
or simply to maintain our participants&#146; confidence in the
integrity of our OTC markets&nbsp;&#151; we would have to invest
heavily in developing new compliance and surveillance systems,
and our operating expenses could increase significantly. Our
assumption of such a role could also increase our exposure to
lawsuits from dissatisfied participants and other parties
claiming that we failed to deter inappropriate or illegal
conduct.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Our compliance and risk management methods might not be
    effective and may result in outcomes that could adversely affect
    our financial condition and operating results.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our ability to comply with applicable laws and rules is largely
dependent on our establishment and maintenance of compliance,
audit and reporting systems, as well as our ability to attract
and retain qualified compliance and other risk management
personnel. Our policies and procedures to identify, monitor and
manage our risks may not be fully effective. Management of
operational, legal and regulatory risk requires, among other
things, policies and procedures to record properly and verify a
large number of transactions and events. We cannot assure you
that our policies and procedures will always be effective or
that we will always be successful in monitoring or evaluating
the risks to which we are or may be exposed.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>We may acquire other businesses, products or technologies.
    If we do, we may be unable to integrate them with our business,
    or we may impair our financial performance.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If appropriate opportunities present themselves, we may acquire
businesses, products or technologies that we believe have
strategic value. We may not be able to identify, negotiate or
finance any future acquisition successfully. Even if we do
succeed in acquiring a business, product or technology, we have
limited experience, other than with respect to the IPE, in
integrating a significant acquisition into our business. The
process of integration may produce unforeseen operating
difficulties and expenditures and may absorb significant
attention of our management that would otherwise be available
for the ongoing development of our business. If we make future
acquisitions, we may issue shares of our stock that dilute
shareholders, expend cash, incur debt, assume contingent
liabilities or create additional expenses related to amortizing
intangible assets with estimable useful lives, any of which
could harm our business, financial condition or results of
operations.
</DIV>

<P align="center" style="font-size: 10pt;">24

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<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Risks Relating to this Offering</B>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>There has been no prior public market for our common
    stock, and we cannot assure you that an active trading market in
    our stock will develop or be sustained.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Prior to this offering, there has been no public market for our
common stock. We cannot assure you that an active trading market
will develop or be sustained after this offering. Although we
intend to apply to list our common stock on the New York Stock
Exchange, we do not know whether third parties will find our
common stock to be attractive or whether firms will be
interested in making a market in our common stock. Also, if you
purchase shares of common stock in this offering, you will pay a
price that was not established in public trading markets. The
initial public offering price of our common stock will be
determined through negotiation between us and the
representatives of the underwriters and thus may not be
indicative of the market price for our common stock after this
offering. Consequently, you may not be able to resell your
shares above the initial public offering price and may suffer a
loss on your investment.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Our current shareholders may have the ability to influence
    our business.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Upon completion of this offering, our current shareholders will
collectively
own &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of our common stock,
or &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
of the total shares of our common stock outstanding. As a
result, these shareholders may have the ability to influence the
election of our directors, the appointment of new management and
the potential outcome of all matters submitted to a vote of our
shareholders, including entering into mergers, the sale of
substantially all of our assets and other extraordinary events.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>The market price of our common stock may fluctuate
    significantly, and it may trade at prices below the initial
    public offering price.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The market price of our common stock after this offering may
fluctuate significantly from time to time as a result of many
factors, including:
</DIV>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    investors&#146; perceptions of our prospects;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    investors&#146; perceptions of the prospects of the commodities
    markets and more broadly, the energy markets;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    differences between our actual financial and operating results
    and those expected by investors and analysts;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    changes in analysts&#146; recommendations or projections;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    fluctuations in quarterly operating results;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    announcements by us or our competitors of significant
    acquisitions, strategic partnerships or divestitures;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    changes or trends in our industry, including trading volumes,
    competitive or regulatory changes or changes in the commodities
    markets;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    changes in valuations for exchanges and other trading facilities
    in general;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    adverse resolution of pending litigation against us;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    additions or departures of key personnel;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    changes in general economic conditions;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    broad market fluctuations.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In particular, announcements of potentially adverse
developments, such as proposed regulatory changes, new
government investigations or the commencement or threat of
litigation against us or our major participants, as well as
announced changes in our business plans or those of our
competitors, could adversely affect the trading price of our
stock, regardless of the likely outcome of those developments.
Broad market and
</DIV>

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<DIV align="left" style="font-size: 10pt;">
industry factors may adversely affect the market price of our
common stock, regardless of our actual operating performance. As
a result, our common stock may trade at prices significantly
below the initial public offering price.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Future sales of our shares could adversely affect the
    market price of our common stock.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If our existing shareholders sell substantial amounts of our
common stock in the public market following this offering, or if
we issue a large number of shares of our common stock in
connection with future acquisitions, the market price of our
common stock could decline significantly. Sales by our existing
shareholders might also make it more difficult for us to raise
equity capital by selling new common stock at a time and price
that we deem appropriate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Based on shares outstanding as of December&nbsp;31, 2004, upon
completion of this offering, we will
have &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of common stock outstanding. Of these outstanding shares,
the &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
sold in this offering will be freely tradable in the public
market. The
remaining &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
will be restricted securities as defined in the SEC&#146;s
Rule&nbsp;144 and may be sold by the holders into the public
market from time to time in accordance with Rule&nbsp;144.
Approximately &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
of these restricted shares will be eligible for sale under
Rule&nbsp;144 following expiration of the lockup agreements
described below.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We and the holders
of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
of our shares outstanding
and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
of our shares issuable under options and restricted stock award
agreements outstanding as of December&nbsp;31, 2004&nbsp;&#151;
including our directors and officers&nbsp;&#151; have agreed to
a 180-day lockup, meaning that, for a period of 180&nbsp;days
following the date of this prospectus, we and they will not sell
shares of our common stock. However, this lockup is subject to
several exceptions, and our lead underwriters in their sole
discretion may release any of the securities subject to the
lockup, at any time without notice.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
After this offering, we intend to register
initially &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of our common stock, or
approximately &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
of the shares of our common stock that will be outstanding at
that time, for issuance under our employee stock purchase plan
and upon the exercise of options granted under our employee
stock option plan or the issuance of shares pursuant to certain
restricted stock award agreements. We may increase the number of
shares registered for this purpose from time to time. Once we
register these shares, they will be able to be sold in the
public market upon issuance. We also intend to enter into a
registration rights agreement with designated holders of our
Class&nbsp;A2 shares. See &#147;Shares Eligible for Future
Sale&#148;.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Delaware law and some provisions of our organizational
    documents make a takeover of our company more difficult.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Provisions of our charter and bylaws may have the effect of
delaying, deferring or preventing a change in control of our
company. A change of control could be proposed in the form of a
tender offer or takeover proposal that might result in a premium
over the market price for our common stock. In addition, these
provisions could make it more difficult to bring about a change
in the composition of our board of directors, which could result
in entrenchment of current management. For example, our charter
and bylaws will:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    require that the number of directors be determined, and any
    vacancy or new board seat be filled, only by the board;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    not permit shareholders to act by written consent, other than
    for certain class votes by holders of the Class&nbsp;A common
    stock;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    not permit shareholders to call a special meeting unless at
    least a majority of the shareholders join in the request to call
    such a meeting;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    allow a meeting of shareholders to be adjourned or postponed
    without the vote of shareholders;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    permit the bylaws to be amended by a majority of the board
    without shareholder approval, and require that a bylaw amendment
    proposed by shareholders be approved by
    66<FONT style="font-size: 70%"><SUP>2</SUP></FONT>/<FONT style="font-size: 60%">3</FONT>%
    of all outstanding shares;</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">26

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<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    require that notice of shareholder proposals be submitted
    between 90 and 120&nbsp;days prior to the scheduled meeting; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    authorize the issuance of undesignated preferred stock, or
    &#147;blank check&#148; preferred stock, by our board of
    directors without shareholder approval.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, Section&nbsp;203 of the Delaware General
Corporation Law, or DGCL, imposes restrictions on mergers and
other business combinations between us and any holder of 15% or
more of our common stock. Delaware law prohibits a publicly held
corporation from engaging in a &#147;business combination&#148;
with an &#147;interested shareholder&#148; for three years after
the shareholder becomes an interested shareholder, unless the
corporation&#146;s board of directors and shareholders approve
the business combination in a prescribed manner or the
interested shareholder has acquired a designated percentage of
our voting stock at the time it becomes an interested
shareholder.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
These and other provisions of our organizational documents and
Delaware law may have the effect of delaying, deferring or
preventing changes of control or changes in management of our
company, even if such transactions or changes would have
significant benefits for our shareholders. As a result, these
provisions could limit the price some investors might be willing
to pay in the future for shares of our common stock.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Your share ownership in our company will be immediately
    and substantially diluted.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If you purchase shares of our common stock in this offering, you
will experience an immediate and substantial dilution of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share (assuming the common stock is offered at
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share, the midpoint of the estimated price range set forth on
the cover of this prospectus) because the price that you pay
will be substantially greater than the pro forma net tangible
book value per share of such stock based on the pro forma net
tangible book value per share as of December&nbsp;31, 2004. This
dilution is due to the fact that when our existing shareholders
purchased or were otherwise issued shares of our common stock in
the past, they did so at prices that were significantly lower
than the price at which our common stock is being offered to the
public in this offering.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>We do not expect to pay any dividends for the foreseeable
    future.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We do not anticipate paying any dividends to our shareholders
for the foreseeable future. Accordingly, investors must be
prepared to rely on sales of their common stock after price
appreciation to earn an investment return, which may never
occur. Investors seeking cash dividends should not purchase our
common stock. Any determination to pay dividends in the future
will be made at the discretion of our board of directors and
will depend upon our results of operations, financial
conditions, contractual restrictions, restrictions imposed by
applicable law or the SEC and other factors our board deems
relevant.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>We will have broad discretion over the use of proceeds to
    us from this offering, and we may not use these funds in a
    manner of which you will approve.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We will have broad discretion to use the net proceeds to us from
this offering, and you will be relying on the judgment of our
board of directors and management regarding the use and
application of these proceeds. Although we expect to use the net
proceeds for working capital and general corporate purposes, we
have not allocated these net proceeds for specific purposes and
cannot assure you that we will use these funds in a manner of
which you will approve.
</DIV>

<P align="center" style="font-size: 10pt;">27

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<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>FORWARD-LOOKING STATEMENTS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
This prospectus, including the sections entitled
&#147;Prospectus Summary&#148;, &#147;Risk Factors&#148;,
&#147;Management&#146;s Discussion and Analysis of Financial
Condition and Results of Operations&#148; and
&#147;Business&#148;, contains forward-looking statements that
are based on our present beliefs and assumptions and on
information currently available to us. You can identify
forward-looking statements by terminology such as
&#147;may&#148;, &#147;will&#148;, &#147;should&#148;,
&#147;expects&#148;, &#147;intends&#148;, &#147;plans&#148;,
&#147;anticipates&#148;, &#147;believes&#148;,
&#147;estimates&#148;, &#147;predicts&#148;,
&#147;potential&#148;, &#147;continue&#148;, or the negative of
these terms or other comparable terminology. These statements
relate to future events or our future financial performance and
involve known and unknown risks, uncertainties and other factors
that may cause our actual results, levels of activity,
performance or achievements to differ materially from those
expressed or implied by these forward-looking statements. These
risks and other factors include those listed under &#147;Risk
Factors&#148; and elsewhere in this prospectus. Although we
believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements. We caution you
not to place undue reliance on these forward-looking statements.
Forward-looking statements include, but are not limited to, our
discussion of the following matters:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    The statements in &#147;Prospectus Summary&nbsp;&#151; The
    Offering&#148; and &#147;Dividend Policy&#148; concerning our
    current intention not to pay any cash dividends.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    The statements in &#147;Management&#146;s Discussion and
    Analysis of Financial Condition and Results of
    Operations&nbsp;&#151; Our Business Environment&#148; and
    &#147;Industry Overview&nbsp;&#151; Industry Trends&nbsp;&#151;
    Increasing Adoption of Energy Commodities as an Investable Asset
    Class&#148; and &#147;&#151;&nbsp;New Market Participants&#148;
    concerning management&#146;s expectations regarding the business
    environment in which it operates and trends in our industry.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    The statements in &#147;Management&#146;s Discussion and
    Analysis of Financial Condition and Results of
    Operations&nbsp;&#151; Sources of Revenues&#148; concerning our
    plans not to adjust commission rates and our belief that we will
    attract trading without entering into order flow agreements.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    The statements in &#147;Management&#146;s Discussion and
    Analysis of Financial Condition and Results of
    Operations&nbsp;&#151; Components of Expenses&#148; concerning
    management&#146;s expectations of various costs.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    The statements in &#147;Management&#146;s Discussion and
    Analysis of Financial Condition and Results of
    Operations&nbsp;&#151; Future Capital Requirements&#148;
    concerning our belief that cash flows will be sufficient to fund
    our working capital needs and capital expenditures through the
    end of 2006.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    The statements in &#147;Business&nbsp;&#151; Our Growth
    Strategy&#148; concerning our plans and intentions to attract
    new market participants, increase the connectivity to our
    marketplace, expand our market data business, develop new
    products and services, and pursue select strategic acquisitions
    and alliances.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    The statements in &#147;Business&nbsp;&#151; Recent
    Developments&#148; concerning the benefits that we anticipate
    will result from the complete migration of our open-outcry
    futures trading activity to our electronic platform.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    The statements &#147;Business&nbsp;&#151; Our Products and
    Services&#148; concerning our belief that our electronic trade
    confirmation service could attract new market participants.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    The statements in &#147;Business&nbsp;&#151; Product
    Development&#148; concerning our plans to introduce trading in
    futures and spot contracts linked to E.U. Emissions Allowances.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    The statements in &#147;Business&nbsp;&#151; Technology&#148;
    concerning our electronic platform and disaster recovery system
    technologies and our belief that we would be able to gain access
    on a timely basis to comparable products and services if our key
    technology contracts were terminated.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    The statements in &#147;Regulation and Legal Proceedings&#148;
    concerning regulation and litigation involving our company.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">28

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<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>USE OF PROCEEDS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Assuming an initial offering price of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share, which is the mid-point of the estimated price range set
forth on the cover of this prospectus, we expect to receive net
proceeds from this offering of approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;after
deducting the estimated underwriting discount and offering
expenses, which are payable by us. We will not receive any of
the proceeds from the sale of shares of our common stock by the
selling shareholders, including any proceeds from the selling
shareholders&#146; sale of additional shares upon exercise of
the underwriters&#146; option to purchase additional shares.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The principal purposes of this offering are to obtain additional
capital, create a public market for our common stock, facilitate
our future access to public equity markets, enable us to provide
incentives to our employees through equity-linked compensation
programs and provide increased visibility in the market.
Publicly tradable shares of our common stock may also be used as
an acquisition currency. On November&nbsp;23, 2004, we borrowed
the entire $25.0&nbsp;million available under our credit
facility with Wachovia Bank, National Association to fund a
portion of the $67.5&nbsp;million redemption of our Class&nbsp;B
common stock. We intend to use a portion of the proceeds of this
offering for the repayment in full of all outstanding debt under
this facility, which as of December&nbsp;31, 2004, amounted to
$13.0&nbsp;million, bearing interest at a six-month LIBOR locked
interest rate of 3.40%. We otherwise currently do not have
specific plans for the use of the net proceeds of the offering.
We expect that we will use the net proceeds for general
corporate purposes, including expanding and diversifying our
products and services.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We may also use a portion of the net proceeds to acquire
complementary businesses, products and technologies, although we
have no current agreements or commitments to do so. Pending
these uses, we intend to invest the net proceeds of this
offering in short-term money-market and money-market equivalent
securities.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>DIVIDEND POLICY</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have never declared or paid cash dividends on our capital
stock. We do not anticipate paying any cash dividends in the
foreseeable future. We currently intend to retain all available
funds and any future earnings to fund the development and growth
of our business.
</DIV>

<P align="center" style="font-size: 10pt;">29
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<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>CAPITALIZATION</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table sets forth our cash and cash equivalents,
restricted cash, short-term investments and capitalization as of
December&nbsp;31, 2004 on a pro forma as adjusted basis to
reflect the sale
of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of our common stock offered by us in this offering at an assumed
initial public offering price of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share, the midpoint of the estimated price range set forth on
the cover of this prospectus, after deducting the estimated
underwriting discounts and commissions and our estimated
offering expenses payable by us.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The outstanding share information excludes:
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    of our common stock issuable upon the exercise of stock options
    outstanding as of December&nbsp;31, 2004 under our 2000 Stock
    Option
    Plan, &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    issuable pursuant to outstanding awards under the 2004
    Restricted Stock Plan as of December&nbsp;31, 2004
    and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    issuable pursuant to outstanding awards under the 2003
    Restricted Stock Deferral Plan for Outside Directors as of
    December&nbsp;31, 2004;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    available for future issuance under our 2000 Stock Option
    Plan, &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    available for future issuance under our 2004 Restricted Stock
    Plan
    and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    available for future issuance under our 2003 Restricted Stock
    Deferral Plan for Outside Directors as of December&nbsp;31, 2004.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
This table should be read in conjunction with &#147;Selected
Consolidated Financial Data&#148;, &#147;Management&#146;s
Discussion and Analysis of Financial Condition and Results of
Operations&#148; and our consolidated financial statements and
related notes included elsewhere in this prospectus.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 9pt; margin-top: 3pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="72%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>As of December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2004</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>As</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Adjusted</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>for this</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Actual</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Offering</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>(in thousands)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash and cash equivalents</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>61,199</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Restricted cash</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,421</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,421</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Short-term investments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,700</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,700</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Current portion of revolving credit facility(1)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Long-term portion of revolving credit facility</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Shareholders&#146; equity(2):</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Preferred Stock, $0.01&nbsp;par value per share, no shares
    authorized, issued or outstanding, actual;
    25,000,000&nbsp;shares authorized and no shares issued or
    outstanding, as adjusted for this offering</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Common Stock, $0.01&nbsp;par value per share, no shares
    authorized, issued or outstanding and undesignated,
    actual; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    authorized
    and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    issued and outstanding, as adjusted for this offering(3)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Class&nbsp;A, Series&nbsp;1 common stock, $0.01&nbsp;per value
    per share, 22,900,638&nbsp;shares authorized;
    11,450,319&nbsp;shares issued and outstanding,
    actual; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    authorized
    and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    issued and outstanding, as adjusted for the recapitalization and
    this offering</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>115</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Class&nbsp;A, Series&nbsp;2 common stock, $0.01&nbsp;par value
    per share, 300,000,000&nbsp;shares authorized,
    206,146,905&nbsp;shares issued and 200,009,670&nbsp;shares
    outstanding,
    actual; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    authorized
    and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    issued and outstanding, as adjusted for the recapitalization and
    this offering</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,061</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Treasury stock, at cost</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(5,541</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(5,541</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Additional paid-in capital</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>53,484</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred stock compensation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6,087</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6,087</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Retained earnings</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>71,172</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>71,172</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accumulated other comprehensive income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34,527</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34,527</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total shareholders&#146; equity</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>149,731</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total capitalization</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>174,731</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 2pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 9pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    This amount was repaid in full in January 2005.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    In connection with our recapitalization, effective upon the
    closing of this offering, we will amend our charter and bylaws
    to authorize the creation of a new class of common stock and
    preferred stock, and effect
    a &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;for
    1 reverse stock split of our outstanding shares of Class&nbsp;A
    common stock. For a description of our recapitalization, see
    &#147;Organization and Recapitalization&#148;.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(3)&nbsp;</TD>
    <TD align="left">
    In November 2004, we exercised the mandatory redemption option
    and redeemed all 11,450,319 shares of Class&nbsp;B redeemable
    common stock. Until the effectiveness of our recapitalization,
    these shares hold the status of undesignated shares of common
    stock.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">30

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>DILUTION</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If you invest in our common stock, your interest will be diluted
to the extent of the difference between the initial public
offering price per share of our common stock and the net
tangible book value per share of common stock upon the
completion of this offering.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following information is presented on a pro forma basis
reflecting the recapitalization and the creation of a new class
of common stock, which together with our Class&nbsp;A common
stock, we refer to as common stock. The recapitalization is
described in greater detail under the heading &#147;Organization
and Recapitalization&#148;.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The table below illustrates per share dilution to new investors,
beginning with pro forma net tangible book value per share. We
determined pro forma net tangible book value per share by
dividing the pro forma net tangible book value (total book value
of tangible assets less total liabilities) by the pro forma
number of shares of common stock outstanding as of
December&nbsp;31, 2004. Our pro forma net tangible book value as
of December&nbsp;31, 2004 equaled $63.7&nbsp;million, or
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share of common stock.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
After giving effect to the sale of shares of common stock to be
sold in this offering at an assumed initial public offering
price of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share, as specified above, and after deducting the estimated
underwriting discount and offering expenses payable by us, our
pro forma net tangible book value as adjusted, as of
December&nbsp;31, 2004, would have equaled approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million,
or
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share of common stock. This represents an immediate increase in
pro forma net tangible book value of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share to our existing shareholders and an immediate dilution in
pro forma net tangible book value of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share to new investors of common stock in this offering. If the
initial public offering price is higher or lower, the dilution
to new investors will be greater or less, respectively. The
following table illustrates this per share dilution to new
investors purchasing our common stock in this offering:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="72%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>


<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Assumed initial public offering price per share</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Pro forma net tangible book value per share as of
    December&nbsp;31, 2004</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Increase in pro forma net tangible book value per share
    attributable to this offering</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Pro forma net tangible book value per share after this offering</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Dilution per share to new investors</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table summarizes, as of December&nbsp;31, 2004,
the differences between our existing shareholders and new
investors with respect to the number of shares of common stock
issued by us, the total consideration paid and the average price
per share paid. The calculations with respect to shares
purchased by new investors in this offering reflect an assumed
initial public offering price of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share, as specified above.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="47%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Shares Purchased</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Total Consideration</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Average</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Price Per</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Number</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Percentage</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Amount</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Percentage</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Share</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Existing shareholders</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    New investors(1)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    If the underwriters exercise their option to purchase additional
    shares in full, the selling shareholders will sell an
    additional &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares,
    and new investors will
    own &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
    of our outstanding common stock.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The preceding tables assume no issuance of shares of common
stock under our stock plans after December&nbsp;31, 2004. As of
December&nbsp;31,
2004, &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
were subject to outstanding options under our 2000 Stock Option
Plan at a weighted average exercise price of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share. Also, there
were &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
subject to outstanding awards under the 2004 Restricted Stock
Plan
and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
subject to outstanding awards under the 2003 Restricted Stock
Deferral Plan for Outside Directors as of December&nbsp;31,
2004. To the extent that these outstanding options are exercised
or restricted shares are issued, there will be further dilution
to new investors.
</DIV>

<P align="center" style="font-size: 10pt;">31

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>SELECTED CONSOLIDATED FINANCIAL DATA</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following tables present our selected consolidated financial
data as of and for the dates and periods indicated. We derived
the selected consolidated financial data set forth below for the
years ended December&nbsp;31, 2004, 2003 and 2002 and as of
December&nbsp;31, 2004 and 2003 from our consolidated financial
statements, which have been audited by Ernst&nbsp;&#38; Young
LLP, independent registered public accounting firm, and are
included elsewhere in this prospectus. We derived the selected
consolidated financial data set forth below as of
December&nbsp;31, 2002, 2001 and 2000, for the year ended
December&nbsp;31, 2001, for the period from May&nbsp;11, 2000
through December&nbsp;31, 2000 and for the period from
January&nbsp;1, 2000 through May&nbsp;10, 2000 from our audited
consolidated financial statements, which are not included in
this prospectus.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The selected consolidated financial data, captioned as
&#147;Predecessor Company&#148;, with respect to the period
January&nbsp;1, 2000 to May&nbsp;10, 2000, reflects the
financial statements of our predecessor, CPEX. Upon our
formation on May&nbsp;&nbsp;11, 2000, CPEX contributed all of
its assets and liabilities to us. CPEX&#146;s operations prior
to our formation on May&nbsp;11, 2000 qualify as a predecessor
entity under regulations of the SEC and have therefore been
included in our consolidated financial statements. We converted
from a limited liability company to a corporation on
June&nbsp;15, 2001.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Effective upon the closing of this offering, we will amend our
charter and bylaws to simplify our capital structure and
governance procedures. We describe the transactions that are
part of our planned recapitalization under the heading
&#147;Organization and Recapitalization&#148;.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The historical results presented below are not necessarily
indicative of the results to be expected for any future period.
The following selected consolidated financial data set forth
below should be read in conjunction with our consolidated
financial statements and related notes and
&#147;Management&#146;s Discussion and Analysis of Financial
Condition and Results of Operations&#148; included elsewhere in
this prospectus.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 9pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="24%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Predecessor</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Company</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Period from</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Period from</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="15">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>May&nbsp;11, 2000</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>January&nbsp;1, 2000</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="14" align="center" nowrap><B>Year Ended December&nbsp;31,</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>through</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>through</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="14" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>December&nbsp;31,</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>May&nbsp;10,</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2002</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2001</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2000</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2000</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap><B>(in thousands, except for share and per share data)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Consolidated Statement of Income/(Loss) Data</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Revenues(1):</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Transaction fees, net(2)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>90,906</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>81,434</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>118,794</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>63,526</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>2,711</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Data services fees</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,691</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,742</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,141</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,589</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Trading access fees</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,595</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,461</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>490</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>102</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,222</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,109</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,065</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>646</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>108,414</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>93,746</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>125,490</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>66,863</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,711</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Operating expenses:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cost of hosting</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,279</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,715</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,962</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,245</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>766</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Compensation and benefits</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30,074</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26,236</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>27,906</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,970</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,777</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>193</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Professional services</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,523</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,138</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,876</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,301</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,695</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Selling, general and administrative</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,120</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,398</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,425</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,365</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,102</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>391</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Depreciation and amortization(3)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,024</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,341</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,368</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,052</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,232</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(12</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total operating expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>76,020</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>74,828</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>74,537</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>39,933</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,572</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>572</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;">32

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="24%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Predecessor</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Company</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Period from</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Period from</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="15">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>May&nbsp;11, 2000</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>January&nbsp;1, 2000</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="14" align="center" nowrap><B>Year Ended December&nbsp;31,</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>through</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>through</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="14" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>December&nbsp;31,</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>May&nbsp;10,</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2002</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2001</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2000</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2000</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap><B>(in thousands, except for share and per share data)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Operating income (loss)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32,394</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,918</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>50,953</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26,930</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(5,861</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(572</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other income (expense), net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,328</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>948</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,492</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(385</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(331</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(23</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Income (loss) before income taxes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33,722</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,866</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>52,445</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26,545</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6,192</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(595</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Income tax expense</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,773</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,489</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,739</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,748</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income (loss)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>21,949</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>13,377</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>34,706</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>15,797</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(6,192</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(595</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deduction for accretion of redeemable common stock(4)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,768</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,656</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,876</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income (loss) available to common shareholders</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>21,949</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>11,609</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>31,050</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>13,921</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(6,192</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(595</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Earnings per common share (pro forma and actual)(5):</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Basic and Diluted</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.14</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.12</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Weighted average common shares outstanding (pro forma and
    actual)(5):</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Basic</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>211,460,434</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>217,315,866</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>217,570,408</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>119,114,688</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Diluted</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>212,248,312</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>218,558,834</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>219,400,380</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>119,495,156</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    We generate revenues from related parties in the ordinary course
    of our business. For a presentation and discussion of our
    revenues attributable to related parties for the years ended
    December&nbsp;31, 2004, 2003 and 2002, see our consolidated
    statements of income and note&nbsp;11 in our consolidated
    financial statements that are included elsewhere in this
    prospectus.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    Our transaction fees are presented net of rebates. See
    &#147;Management&#146;s Discussion and Analysis of Financial
    Condition and Results of Operations&nbsp;&#151; Sources of
    Revenues&nbsp;&#151; Transaction Fees.&#148;</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(3)&nbsp;</TD>
    <TD align="left">
    Our chief executive officer purchased CPEX in October 1997,
    which resulted in negative goodwill of $266,000 and a writedown
    of property and equipment. The negative amounts of depreciation
    and amortization expense during the period from January&nbsp;1,
    2000 through May&nbsp;10, 2000 primarily relate to the
    amortization of the negative goodwill in excess of the
    depreciation of property and equipment. In connection with our
    acquisition of the IPE in June&nbsp;2001, we amortized
    $1.7&nbsp;million in goodwill and indefinite-lived other
    intangible assets during the year ended December&nbsp;31, 2001.
    We did not record any amortization expense on these assets, in
    accordance with the accounting standards, subsequent to 2001.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(4)&nbsp;</TD>
    <TD align="left">
    We redeemed all of our Class&nbsp;B redeemable common stock on
    November&nbsp;23, 2004 at a price of $5.895&nbsp;per share, for
    aggregate consideration of $67.5&nbsp;million. Upon its issuance
    on June&nbsp;18, 2001, we recorded our Class&nbsp;B redeemable
    common stock at its discounted present value of
    $60.2&nbsp;million. We recorded charges to retained earnings for
    the accretion of this amount up to the $67.5&nbsp;million
    redemption value of our Class&nbsp;B redeemable common stock
    over a two-year period ending in June 2003, which was the
    earliest potential redemption date.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(5)&nbsp;</TD>
    <TD align="left">
    We have presented our data for the year ended December&nbsp;31,
    2001 on a pro forma basis as if our conversion from a limited
    liability company to a corporation, which occurred on
    June&nbsp;15, 2001, had occurred on January&nbsp;1, 2001. For
    more details of this conversion, see the description under the
    heading &#147;Organization and Recapitalization&#148;. The share
    and per share data for the years ended December&nbsp;31, 2004,
    2003 and 2002 are based on actual historical data.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">33

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="46%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap><B>As of December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2002</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2001</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2000</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap><B>(in thousands)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Consolidated Balance Sheet Data</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash and cash equivalents(1)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>61,199</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>44,913</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>33,627</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>25,610</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>9,485</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Short-term investments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,700</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Restricted cash and restricted short-term investments(1)(2)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,421</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>36,797</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,876</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,157</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total current assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100,042</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>105,893</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>60,841</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>46,814</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,234</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Property and equipment, net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,364</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25,625</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32,843</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,567</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,104</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Goodwill and other intangible assets, net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>86,075</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>81,448</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73,950</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>67,727</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>207,518</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>214,879</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>170,053</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>134,957</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22,357</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total current liabilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34,440</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,917</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,603</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30,023</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,183</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Revolving credit facility&nbsp;&#151; current and long-term(1)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Related-party notes payable&nbsp;&#151; current and long-term</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,201</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,540</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Obligations under capital leases&nbsp;&#151; current and
    long-term</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>482</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,130</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,656</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,306</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Class&nbsp;B redeemable common stock(1)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>67,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>65,732</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>62,076</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Shareholders&#146; and members&#146; equity(2)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>149,731</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>118,776</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>75,981</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34,770</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,634</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    The redemption of the Class&nbsp;B redeemable common stock
    occurred in November 2004, which resulted in an
    $18.5&nbsp;million reduction in cash and cash equivalents, a
    $24.0&nbsp;million reduction in restricted short-term
    investments, a $25.0&nbsp;million increase in current and
    long-term debt and a corresponding $67.5&nbsp;million reduction
    in Class&nbsp;B redeemable common stock.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    We early adopted FASB Interpretation No.&nbsp;46,
    &#147;Consolidation of Variable Interest Entities&#148;, during
    2003 which resulted in the consolidation of a variable interest
    entity and an increase in restricted short-term investments and
    a corresponding increase in additional paid-in capital for
    $24.0&nbsp;million.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">34

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 9pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="62%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="14" align="center" nowrap><B>Year Ended December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="14" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2002</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2001(1)</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="14" align="center" nowrap><B>(in thousands, except for percentages)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Operating Data:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Our Market Share of Selected Key Products:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total crude oil futures contracts traded globally</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>78,477</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>69,450</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>67,173</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>55,926</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    IPE Brent Crude oil futures contracts traded</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25,458</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24,013</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21,493</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,395</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Our crude oil futures market share(2)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32.4</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34.6</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32.0</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32.9</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total cleared Henry Hub natural gas contracts traded on us and
    NYMEX-ClearPort</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22,308</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,869</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,170</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Our cleared Henry Hub natural gas contracts traded</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,954</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,512</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>792</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Our market share&nbsp;&#151; cleared Henry Hub natural gas vs.
    NYMEX-ClearPort(3)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>76.0</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>65.7</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>67.7</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total cleared PJM financial power contracts traded on us and
    NYMEX-ClearPort</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,256</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>149</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Our cleared PJM financial power contracts traded</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,022</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Our market share&nbsp;&#151; cleared PJM financial power vs.
    NYMEX-ClearPort(4)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>81.4</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.0</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Our Average Daily Trading Fee Revenues(5):</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="17">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Our futures business average daily exchange fee revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>179</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>158</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>125</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>92</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Our bilateral OTC business average daily commission fee revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>80</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>112</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>330</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>194</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Our cleared OTC business average daily commission fee revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>94</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Our total average daily commission fee and exchange fee revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>353</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>294</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>460</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>286</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Our Trading Volume(6):</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="17">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Annual futures volume</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35,541</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33,341</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30,441</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26,423</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Futures average daily volume</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>140</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>132</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>121</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>104</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Annual OTC volume</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30,978</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24,270</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>44,005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24,881</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    OTC average daily volume</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>123</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>97</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>175</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>99</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 2pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 8pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    Information for 2001 for our futures business reflects trading
    activity for the entire year, including trading activity that
    occurred prior to our acquisition of the IPE in June 2001.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    Our crude oil futures market share is calculated based on the
    number of IPE Brent Crude futures contracts traded as compared
    to the total IPE Brent Crude futures contracts and NYMEX Light
    Sweet Crude and Dublin Brent Crude futures contracts traded.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(3)&nbsp;</TD>
    <TD align="left">
    Our cleared Henry Hub market share versus NYMEX-ClearPort is
    calculated based on the number of IntercontinentalExchange
    cleared Henry Hub natural gas contracts traded as a percentage
    of the total IntercontinentalExchange cleared Henry Hub natural
    gas contracts and NYMEX-ClearPort Henry Hub natural gas futures
    contracts traded.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(4)&nbsp;</TD>
    <TD align="left">
    Our cleared PJM financial power market share versus
    NYMEX-ClearPort is calculated based on the number of
    IntercontinentalExchange cleared PJM financial power contracts
    traded as a percentage of the total IntercontinentalExchange
    cleared PJM financial power contracts and NYMEX-ClearPort
    cleared PJM financial power contracts traded. PJM refers to the
    Pennsylvania, New Jersey and Maryland power trading hub. The
    NYMEX-ClearPort cleared PJM financial power contract was
    launched in April 2003 and our PJM financial power contract was
    launched in November 2003. Data regarding the volumes of
    NYMEX-ClearPort cleared PJM financial power contracts traded is
    derived from the Futures Industry Association.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(5)&nbsp;</TD>
    <TD align="left">
    Represents the total commission fee and exchange fee revenues
    for the year divided by the number of trading days during that
    year.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(6)&nbsp;</TD>
    <TD align="left">
    Volume is calculated based on the number of contracts traded in
    our markets, or the number of round turn trades. Each round turn
    represents a matched buy and sell order of one contract. Average
    daily volume represents the total volume, in contracts, for the
    year divided by the number of trading days during that year.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">35

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<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>AND RESULTS OF OPERATIONS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>The following discussion contains forward-looking statements
that involve risks and uncertainties. Our actual results could
differ materially from those anticipated in these
forward-looking statements for many reasons, including those set
forth under the heading &#147;Risk Factors&#148; and elsewhere
in this prospectus. The following discussion is qualified in its
entirety by, and should be read in conjunction with, the more
detailed information contained in our &#147;Selected
Consolidated Financial Data&#148; and our consolidated financial
statements and related notes included elsewhere in this
prospectus.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Overview</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We operate the leading global futures and over-the-counter, or
OTC, marketplace for trading a broad array of energy products.
Our marketplace brings together buyers and sellers of
derivatives and physical energy commodities contracts through
our leading, Internet-based electronic trading platform. We
operate our business in two distinct markets: futures markets
and OTC markets. Futures markets offer trading in standardized
derivative contracts on a regulated exchange and OTC markets
offer trading in over-the-counter derivative contracts,
including contracts that provide for the physical delivery of an
underlying commodity and financial settlement based on the
prices of underlying commodities. During 2004, 35.5&nbsp;million
contracts were traded in our futures markets and
31.0&nbsp;million contracts were traded in our OTC markets, up
6.6% from 33.3&nbsp;million futures contracts traded in 2003 and
up 27.6.% from 24.3&nbsp;million OTC contracts traded in 2003.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For financial reporting purposes, our business is comprised of
two segments: our futures business segment and our OTC business
segment. Our futures business segment consists of trade
execution in futures contracts and options on futures contracts,
which we conduct through our subsidiary, the IPE. We presently
offer futures trading both on our electronic platform and on our
open-outcry trading floor. We recently announced our intention
to close our open-outcry trading floor in London on
April&nbsp;7, 2005. Thereafter, all of our futures trading will
be conducted exclusively on our electronic platform. We made
this decision to maintain and enhance our competitive position
in our futures markets, and to take advantage of the increasing
acceptance and adoption of electronic trading. Our OTC business
segment consists of trade execution in OTC energy contracts
conducted exclusively on our electronic platform and the
provision of trading-related services, including OTC electronic
trade confirmation and OTC risk management functionality. As
part of both our futures and OTC business segments, we also
offer a variety of market data services.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have experienced rapid growth in our revenues, net income and
operating cash flow since trading commenced on our electronic
platform in August 2000. Our consolidated revenues grew to
$108.4&nbsp;million for the year ended December&nbsp;31, 2004
from $2.7&nbsp;million for the combined year ended
December&nbsp;31, 2000. Our consolidated net income increased to
$21.9&nbsp;million for the year ended December&nbsp;31, 2004
from a net loss of $6.8&nbsp;million for the combined year ended
December&nbsp;31, 2000. Our consolidated net cash flows from
operating activities grew to $40.2&nbsp;million in net cash
provided by operating activities for the year ended
December&nbsp;31, 2004 from $2.9&nbsp;million in net cash used
in operating activities for the combined year ended
December&nbsp;31, 2000.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Corporate Structure and Ownership</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 1997, Jeffrey C. Sprecher, our founder, chairman and chief
executive officer, acquired Continental Power Exchange, Inc., or
CPEX, our predecessor company, to develop a platform to provide
a more transparent and efficient market structure for OTC energy
commodities trading. In May 2000, our company was formed, and
CPEX contributed all of its assets to us, which consisted
principally of electronic trading technology, and its
liabilities, in return for a minority equity interest in our
company. In connection with our formation, seven leading
wholesale commodities market participants, which we refer to as
our Initial Shareholders, acquired equity interests in our
company and entered into order flow agreements with us. In
November 2000, six leading natural gas and power companies,
which we refer to as the Gas and Power Firms, acquired equity
interests in our business, entered into order flow agreements
with us and made a $30.0&nbsp;million cash payment to us. The
following firms are our Initial Shareholders:
BP&nbsp;Exploration and Oil, Inc., Deutsche
</DIV>

<P align="center" style="font-size: 10pt;">36

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<DIV align="left" style="font-size: 10pt;">
Bank Sharps Pixley Inc., The Goldman Sachs Group, Inc., Morgan
Stanley Capital Group Inc., S&nbsp;T Exchange Inc. (an affiliate
of Royal Dutch Shell), Soci&#233;t&#233; G&#233;n&#233;rale
Financial Corporation and Total Investments USA Inc. (an
affiliate of Total). The Gas and Power Firms that are currently
shareholders are affiliated with the following firms: American
Electric Power Company, Duke Energy, El&nbsp;Paso Energy
Partners and Mirant. Two additional Gas and Power Firms, Aquila
and Reliant, are no longer shareholders. The order flow
agreements committed the Initial Shareholders and the Gas and
Power Firms to execute minimum annual volumes of transactions on
our electronic platform. These order flow agreements expired
between 2002 and 2003. See &#147;&#151;&nbsp;Sources of
Revenues&nbsp;&#151; Transaction Fees&#148; and &#147;Certain
Relationships and Related Transactions&#148;.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On June&nbsp;18, 2001, we expanded our marketplace to include
futures trading by acquiring IPE Holdings Plc, the owner of the
IPE, in a share-for-share exchange. At that time, the IPE was
operated predominantly as a floor-based open-outcry exchange. In
connection with this acquisition, we converted from a limited
liability company, IntercontinentalExchange LLC, to our present
corporate form by merging into IntercontinentalExchange, Inc., a
Delaware corporation and the surviving entity of the merger. In
connection with the acquisition, we issued 11,450,319
Class&nbsp;A1&nbsp;shares and 11,450,319 Class&nbsp;B redeemable
shares to the IPE shareholders in return for their shares in the
IPE. The Class&nbsp;B redeemable shares were subject to
redemption at $5.895 per share under certain circumstances
related to the IPE&#146;s benchmark contracts being traded
exclusively on our electronic platform for a period of time. In
November 2004, we amended our charter to permit early redemption
of the Class&nbsp;B redeemable shares at $5.895&nbsp;per share,
and redeemed all 11,450,319 Class&nbsp;B redeemable shares for
an aggregate redemption price of $67.5&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Effective upon the closing of this offering, we will amend our
charter and bylaws to create a new class of common stock, which
we refer to as new common stock, and we will grant conversion
rights to our holders of Class&nbsp;A1&nbsp;shares and
Class&nbsp;A2&nbsp;shares, which will permit them to convert
their shares into shares of new common stock, subject to such
conditions as our board deems appropriate. In our amended
charter, we also intend to authorize a reverse stock split to
reduce the number of outstanding Class&nbsp;A1&nbsp;shares and
Class&nbsp;A2&nbsp;shares. For a detailed discussion of our
recapitalization, please refer to &#147;Organization and
Recapitalization&#148; elsewhere in this prospectus.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Our Business Environment</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Trading activity in global derivatives markets has risen in the
past decade as the number of available trading products and
venues has increased. This, in turn, has enabled a growing
number and range of market participants to access these markets.
As energy markets began to deregulate in the early 1990&#146;s,
new derivatives products were developed to satisfy the
increasing demand for energy risk management tools and
investment strategies. The range of derivative energy products
has expanded to include instruments such as futures, forwards,
swaps, differentials, spreads and options. Volume growth in both
our futures markets and our OTC markets has been driven by
steadily increasing demand for these contracts and our ability
to provide liquidity in the markets for these products.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our business is primarily transaction-based, and changes in
trading volumes have a direct impact on our business and
profitability. Trading volumes are driven primarily by the
degree of volatility in commodities prices. Higher price
volatility increases the need to hedge contractual price risk
and creates opportunities for arbitrage or speculative trading.
In addition to price volatility, changes in global energy
prices, such as those experienced in recent years in crude oil,
can have a significant impact on our trading volumes. While our
trading volumes and transaction fees decreased in our OTC
business segment in 2003 from the levels in 2002, following a
period of reduced liquidity in the OTC markets, our trading
volumes and transaction fees increased in our futures business
segment during the same period. Trends in our trading volumes
and transaction fees have also been driven by varying levels of
liquidity both in our markets and in the broader markets for
energy commodities trading, which influence trading volumes
across all of the markets in which we operate. Our trading
volumes in our futures business segment may also be affected by
our decision to close our open-outcry trading floor.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The futures markets are highly regulated and offer trading of
standardized contracts. The futures markets are also more
structured and mature than the institutional markets for OTC
energy trading. According to the Futures Industry Association,
the number of energy futures contracts traded in 2004 was
243.5&nbsp;million, up from 68.7&nbsp;million contracts traded
in 1995, representing an average compounded growth rate of
15.1%&nbsp;per annum. In our futures business segment, rising
demand for, among other things, risk management instruments in
the energy sector has driven record trading volumes for seven
consecutive years.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Unlike the futures markets, the OTC markets generally involve
limited regulation and offer customization of contract terms by
counterparties. While the OTC markets are maturing, contracts
traded in the OTC markets generally remain less standardized
than the futures markets and the markets generally have been
characterized by opaqueness and fragmentation of liquidity. We
have introduced a number of structural changes to OTC markets to
increase both transparency and liquidity, including the
introduction of our electronic platform, cleared OTC contracts
and transaction-based indices.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In our OTC business segment, we experienced rapid growth in
trading volumes through the middle of 2002. Beginning in
mid-2002, however, the North American OTC markets experienced a
dramatic decline in liquidity and trading volumes following
highly publicized problems involving energy companies, including
widespread credit downgrades, investigations by the Department
of Justice, the Federal Energy Regulatory Commission and the
Federal Trade Commission, relating to alleged manipulative
trading and price reporting practices, misstatements of
financial results, and other matters. As a result of the
foregoing, several significant market participants reduced or
eliminated their energy trading operations near the end of 2002.
While trading volumes in our OTC markets declined to
24.3&nbsp;million contracts in 2003 from 44.0&nbsp;million
contracts in 2002, primarily as a result of these events, we
experienced a 9.5% increase from 2002 to 2003 in trading volumes
in our futures markets, partially as a result of some
participants migrating their trading to the more regulated
futures markets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As a result of these events, participants in the OTC markets
became increasingly focused on managing counterparty credit risk
and trading for hedging needs, rather than speculation or
arbitrage. As the credit quality of trading counterparties and
the overall credit environment improved during late 2003 and new
risk management tools were introduced, participants began to
increase their activity in the OTC markets. With the
introduction of cleared OTC contracts, the market began to
experience an influx of new OTC market participants. Financial
services companies, such as financial institutions, hedge funds
and proprietary trading firms began entering the OTC markets in
increasing numbers due to the introduction of new bilateral and
cleared trading products, electronically available markets, risk
management tools, increased price volatility, and the
availability of experienced energy traders displaced from
merchant energy companies.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We launched the industry&#146;s first cleared OTC energy
contracts in March 2002, which reduced the amount of capital
required to trade and the credit risk associated with bilateral
OTC trading by interposing an independent clearinghouse as a
counterparty to trades in these new contracts. Clearing through
a central clearinghouse offers market participants the ability
to cross-margin, which generally lowers the amount of capital
participants are required to post. As a result of the
introduction of OTC clearing, the addition of new participants
and an improved credit environment in the markets for energy
commodities trading, our OTC markets experienced steady growth
in 2004, although still below the record trading volumes
experienced in 2002. Trading volumes in our OTC markets
increased 27.6% to 31.0&nbsp;million contracts in 2004 from
24.3&nbsp;million contracts in 2003. This trend of volume growth
has continued from 2004 into the first quarter of 2005.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We believe that the long-standing move toward electronic trade
execution, together with the lower barriers to entry for new
market participants and the increased adoption of energy
commodities as an investable asset class, will support continued
growth in our markets. As participants continue to use more
sophisticated financial instruments and risk management
approaches and strategies to help manage their exposure to
energy commodities, we believe there remains considerable
opportunity for further growth in energy derivatives trading on
a global basis.
</DIV>

<P align="center" style="font-size: 10pt;">38

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<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Variability in Quarterly Comparisons</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition to general conditions in the financial markets and
in the energy markets in particular, energy trading has
historically been subject to variability in trading volumes due
primarily to five key factors. These factors include
geopolitical events, weather, perceived supply and demand
imbalances in underlying energy commodities, the number of
trading days in a quarter and seasonality.
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Geopolitical Events:</I> Geopolitical events tend to impact
    global oil prices and may impact global oil supply. Because
    crude oil prices often move in conjunction with changes in the
    perception of geopolitical risk, these events in the past have
    impacted trading activities in our markets due to the increased
    need for risk management in times of uncertainty.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Weather:</I> Weather events have been an important factor in
    energy price volatility and the supply and demand of energy
    commodities and, therefore, the trading activities of market
    participants. Unexpected or extreme weather conditions, such as
    low temperatures or hurricanes, and other events that cause
    demand increases, supply disruptions or unexpected volatility
    tend to result in business disruptions and expanded hedging and
    trading activity in our markets.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Real and Perceived Supply and Demand Imbalances:</I>
    Government agencies, such as the Energy Information Agency,
    regularly track energy supply data. Reporting on supply or
    production may impact trading volumes due to real or perceived
    supply and demand imbalances.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Number of Trading Days:</I> The variability in the number of
    business days in each quarter affects our revenues, and will
    affect quarter-to-quarter revenue comparisons, since trading
    generally only takes place on business days.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Seasonality:</I> Participants engaged in oil, natural gas and
    power businesses tend to experience moderate seasonal
    fluctuations in demand, although such seasonal impacts have been
    negated in periods of high volume trading.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
These and other factors could cause our revenues to fluctuate
from quarter to quarter. These fluctuations may affect the
reliability of quarter to quarter comparisons of our revenues
and operating results when, for example, these comparisons are
between quarters in different seasons. Inter-seasonal
comparisons will not necessarily be indicative of our results
for future periods.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Segment Reporting</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For financial reporting purposes, our business is divided into
two segments: our futures business segment and our OTC business
segment. For a discussion of these segments and related
financial disclosure, refer to note&nbsp;15 to our consolidated
financial statements and related notes included elsewhere in
this prospectus.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Our Futures Business Segment</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We conduct our futures business through our subsidiary, the IPE.
The IPE operates as a RIE in the United Kingdom, where it is
regulated by the FSA. The IPE was founded in 1980 as a
traditional open-outcry exchange by a group of leading energy
and trading companies. All futures and options trades executed
in our futures markets are cleared by LCH.Clearnet. Only
exchange members may execute trades in our futures markets, for
their own or their clients&#146; account. Members and their
participants include many of the world&#146;s largest energy
companies and leading financial institutions. We do not risk our
own capital by engaging in any trading activities or by
extending credit to market participants.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We currently offer futures trading both on our electronic
platform and on our open-outcry trading floor. We recently
announced our intention to close our open-outcry trading floor
on April&nbsp;7, 2005 in London. Thereafter, all of our futures
trading will be conducted exclusively on our electronic
platform. Our decision was made to take advantage of the
increasing acceptance and adoption of electronic trading and to
maintain and enhance our competitive position in our futures
markets. See &#147;Business&nbsp;&#151; Recent
Developments&#148;.
</DIV>

<P align="center" style="font-size: 10pt;">39

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We expect to achieve cost savings ranging from $5.0&nbsp;million
to $8.0&nbsp;million per annum on an ongoing basis in connection
with our decision to close the trading floor. These cost savings
primarily relate to reduced compensation and benefits expenses,
rent and occupancy expenses and selling, general and
administrative expenses. However, in the near term, any cost
savings will be offset by a charge we expect to take primarily
in the second quarter of 2005 ranging from $6.0&nbsp;million to
$9.0&nbsp;million in connection with expenses we expect to incur
as part of the closure of the open-outcry trading floor and full
migration of futures trading to our electronic platform. These
expenses primarily include lease termination costs, employee
termination costs and property and equipment disposals relating
to our open-outcry trading floor. Furthermore, because our
electronic platform can accommodate substantially greater
trading volumes, and the cost of operating our platform is
largely fixed, we expect to benefit from increased operating
leverage in our futures business.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We offer market participants trading in two types of instruments
in our futures markets:
</DIV>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Futures:</I> A futures contract is a standardized contract to
    buy or sell a specified quantity of an underlying asset during a
    particular month.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Options:</I> An option is a contract that conveys to the
    buyer the right, but not the obligation, to call (buy)&nbsp;or
    put (sell)&nbsp;an underlying futures contract at a price
    determined at the time of execution of the option.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our IPE Brent Crude futures contract is a benchmark contract
relied upon by certain large oil producing nations to price
their crude oil. In 2004, on an average trading day, futures
contracts for approximately 100&nbsp;million barrels of Brent
Crude are traded in our markets, with an average notional daily
value of over $3.7&nbsp;billion. We believe that market
participants are increasingly relying on this contract for their
risk management activities, as evidenced by steady increases in
traded volumes over the past several years.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Following our acquisition of the IPE in June 2001, we made
significant modifications to adapt our electronic trading
platform to the technical, regulatory and clearing requirements
of regulated futures and options trading. Since 2002, we have
progressively transitioned our futures markets toward electronic
trading. In November 2004, we closed the morning session for
floor-based trading in the IPE Brent Crude futures contract and
began offering trading in that contract exclusively on our
electronic platform during that session. From November&nbsp;1,
2004 through February&nbsp;28, 2005, electronic trading has
represented an average of 26.9% of overall IPE Brent Crude
futures trading volume.
</DIV>

<P align="center" style="font-size: 10pt;">40

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table presents, for the periods indicated,
selected statement of income data in dollars and as a percentage
of revenues for our futures business segment:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="40%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap><B>Year Ended December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>%</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>%</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2002</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>%</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap><B>(dollar amounts in thousands)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Revenues:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Transaction fees, net(1):</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    IPE Brent Crude futures</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>32,176</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>57.6</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>28,497</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>58.0</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>22,092</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>57.9</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other futures products and options</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,323</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,463</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,445</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24.8</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Data services fees</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,319</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,292</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,073</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13.3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Intersegment fees</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>353</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>79</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Trading access fees</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,224</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>762</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>395</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,465</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,080</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,140</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>55,860</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>49,173</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>38,145</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Operating expenses:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Selling, general and administrative<BR>
    expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23,823</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>42.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22,681</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>46.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20,809</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>54.6</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Intersegment expenses(2)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,530</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,735</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>62</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Depreciation and amortization</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,415</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,117</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>962</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total operating expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33,768</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>60.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29,533</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>60.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21,833</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>57.2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Operating income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22,092</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>39.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,640</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>39.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,312</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>42.8</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other income, net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,927</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,133</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,002</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.6</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Income tax expense</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,407</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,270</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,060</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15.9</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>15,612</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>27.9</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>13,503</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>27.5</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>11,254</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29.5</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    Our transaction fees are presented net of rebates. For a
    discussion of these rebates, see &#147;&#151;&nbsp;Sources of
    Revenues&nbsp;&#151; Transaction Fees&#148;. We generate
    revenues from related parties in the ordinary course of our
    business. Revenues attributable to related parties were
    $6.4&nbsp;million, $5.5&nbsp;million and $9.2&nbsp;million for
    the years ended December&nbsp;31, 2004, 2003 and 2002,
    respectively. For a discussion of our related parties, see
    note&nbsp;11 in our consolidated financial statements, which are
    included elsewhere in this prospectus.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    Intersegment expenses represent fees paid by our futures
    business segment for support provided by the OTC business
    segment to operate the electronic trading platform used in our
    futures business.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In our futures business segment, we earn fees from both parties
to each futures contract or option on futures contract that is
traded, based on the volume of the commodity underlying the
futures or option contract that is traded. In our futures
business, we refer to these fees as exchange fees. We derived
exchange fees of $45.5&nbsp;million, $40.0&nbsp;million and
$31.5&nbsp;million in 2004, 2003 and 2002, respectively,
representing 42.0%, 42.6% and 25.1%, respectively, of our
consolidated revenues. A contract is a standardized quantity of
the physical commodity underlying each futures contract. For
example, the IPE Brent Crude futures contract trades in a
contract size of 1,000&nbsp;net barrels, or 42,000
U.S.&nbsp;gallons of Brent Crude.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table presents the underlying commodity size per
futures and options contract traded in our futures markets as
well as the relevant standard of measure for each contract:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="71%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="16%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="left" nowrap><B>IPE Futures Contract</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Size</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Measure</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    IPE Brent Crude</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Barrels</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    IPE Gas Oil</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Metric Tonnes</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    IPE Natural Gas</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Therms per day</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    IPE Electricity</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Megawatt Hours</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;">41

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="59%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="14%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="14%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="left" nowrap><B>IPE Options Contract</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Size</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Measure</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    IPE Brent Crude options</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>IPE Brent futures contracts</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    IPE Gas Oil options</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>IPE Gas Oil futures contracts</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table presents, for the periods indicated, trading
activity in our futures markets for commodity type based on the
total number of contracts traded:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="71%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Year Ended December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2002</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>(in thousands)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Number of contracts traded:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    IPE Brent Crude futures</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25,458</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24,013</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21,493</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    IPE Gas Oil futures</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,356</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,430</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,156</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other(1)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>727</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>898</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>792</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35,541</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33,341</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30,441</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    Consists primarily of IPE Natural Gas futures, IPE Brent Crude
    options and IPE Gas Oil options.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following chart presents the futures exchange fee revenues
by contract traded in our markets for the periods presented:
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<IMG src="y06540y0654013.gif" alt="(CHART)">
</DIV>

<P align="center" style="font-size: 10pt;">42

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table presents our average daily open interest for
our futures contracts. Open interest is the number of contracts
(long or short) that a member holds either for its own account
or on behalf of its clients. Open interest refers to the total
number of contracts that are currently open&nbsp;&#151; in other
words, contracts that have been traded but not yet liquidated by
either an offsetting trade, exercise, expiration or assignment.
The level of open interest in a contract is often considered a
measure of the strength of an exchange&#146;s competitive
position in that contract. In general, the higher the level of
open interest, the greater the extent it is being used as a
hedging and risk management tool. Open interest is also a
measure of the health of a market both in terms of the number of
contracts which members and their clients continue to hold in
the particular contract and by the number of contracts held for
each contract month listed by our exchange.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="71%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Year Ended December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2002</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>(in thousands)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Open Interest (in contracts):</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    IPE Brent Crude futures</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>336</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>299</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>260</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    IPE Gas Oil futures</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>164</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>148</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>191</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other(1)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>43</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>54</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>535</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>490</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>505</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    Consists primarily of IPE Natural Gas futures, IPE Brent Crude
    options and IPE Gas Oil options.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We charge exchange fees to the IPE&#146;s 32 clearing members
for contracts traded for their own account and for contracts
traded on behalf of their participants or local traders. As the
IPE&#146;s operations are currently centered in London, we
consider all revenues derived from exchange fees to be generated
in the United Kingdom. We also provide market data services in
our futures business segment based on trading volumes and prices
in our futures markets. Some indication of the geographical
dispersal of the IPE&#146;s external participants can be
discerned from the location of the market data terminals through
which our futures data is distributed. Of the approximately
19,000 terminals through which our futures data is distributed,
51.2% are located in Europe, 42.0% in North America and the
remaining 6.8% are located primarily in Asia.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The revenues generated in our futures business are denominated
in pounds sterling, which is the functional currency of the IPE
and related U.K. subsidiaries. We translate these revenues and
expenses into U.S.&nbsp;dollars using the average exchange rates
for the reporting period. Gains and losses from foreign currency
transactions are included in other income (expense) in our
consolidated statements of income. We may experience substantial
gains or losses from foreign currency transactions given the
significant operations of our futures business segment. We
record any translation adjustments in accumulated other
comprehensive income, a separate component of shareholders&#146;
equity.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Our OTC Business Segment</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our OTC business segment consists primarily of the operation of
global OTC commodities markets on our electronic platform. We
offer market participants a wide selection of derivative
contracts, as well as contracts for physical delivery of
commodities, to satisfy their trading objectives, whether they
relate to risk management, asset allocation, ensuring physical
delivery of select commodity products, speculation or arbitrage.
A substantial portion of the trading volume in our OTC business
segment relates to approximately 15-20 highly liquid contracts
in natural gas, power and oil. In addition, we offer trading in
a wide range of complementary &#147;niche&#148; products that
are customized to specific market requirements and preferences.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The OTC products available for trading in our markets fall into
the following general contract types:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Forwards and Swaps:</I> Forwards are individually negotiated
    agreements between two parties to deliver a specified quantity
    of an underlying asset, on a specified date, and at a specified
    location. Swaps are financially settled derivative contracts
    through which counterparties exchange or &#147;swap&#148; risk
    of two different assets with differing risk and performance
    profiles.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">43

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Differentials and Spreads:</I> Differentials, or basis swaps,
    are contracts that allow counterparties to &#147;swap&#148;
    delivery (or the financial equivalent of delivery) of a
    commodity between two different delivery points. Spreads are the
    simultaneous purchase and sale of forward or swap contracts for
    different months, different commodities or different grades of
    the same commodity.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Options:</I> Options are contracts that convey to the buyer
    the right, but not the obligation, to require the seller to make
    or take delivery of a stated quantity of a specified commodity
    at a specified price.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our most liquid and actively traded OTC markets include
contracts that can be traded bilaterally or cleared at the
participant&#146;s option. In order to provide participants with
access to centralized clearing and settlement, we launched the
industry&#146;s first cleared natural gas and global oil
contracts in the OTC markets in March 2002, followed by our
first cleared OTC power contracts in November 2003. Our
participants, representing many of the world&#146;s largest
energy companies and leading financial institutions, as well as
hedge funds, proprietary trading firms, and natural gas and
electric utilities, rely on our platform for price discovery,
hedging and risk management. Unlike the futures market, the OTC
market does not have an exchange membership structure.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Revenues in our OTC business segment are generated primarily
through commission fees earned from trades, and from the
provision of OTC market data and electronic trade confirmation
services. While we charge a monthly minimum commission fee for
access to our electronic platform, we derive a substantial
portion of our OTC revenues from commission fees paid by
participants for each trade that they execute or clear based on
the underlying commodity volume. Commission fees are payable by
each counterparty to a trade and, for bilateral trades, are
generally due within 30&nbsp;days of the invoice date. We do not
risk our own capital by engaging in any trading activities or by
extending credit to market participants.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition to our commission fees, a participant that chooses
to clear a trade must pay a fee to LCH.Clearnet for the benefit
of clearing and another for the services of the relevant member
clearing firm, or futures commission merchant. Consistent with
our futures business, we derive no direct revenues from the
clearing process and participants pay the clearing fees directly
to LCH.Clearnet and the futures commission merchants. However,
we believe that the introduction of cleared OTC contracts has
attracted new participants to our platform, which has led to
increased liquidity in our markets. We believe that the increase
in liquidity has led to increased trading volumes in North
American natural gas and power traded in our OTC markets.
Transaction or commission fees derived from trading in cleared
OTC contracts represent an increasing percentage of our total
OTC revenues. In 2004, 2003 and 2002, these transaction fees
represented 44.5%, 13.4% and 1.4% of our total OTC revenues,
respectively, net of intersegment fees. We intend to continue to
support the introduction of these products in response to the
requirements of our participants.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Trading participants located in North America accounted for
88.9% of our OTC commission fee revenues for 2004, trading
participants located in Europe generated 6.0% of our OTC
commission fee revenues for 2004, and the remaining 5.1%
represents trading participants located primarily in Asia. We
derived commission fees for OTC trades executed on our
electronic platform of $43.5&nbsp;million, $34.2&nbsp;million
and $84.0&nbsp;million in 2004, 2003 and 2003, respectively, or
40.2%, 36.5% and 66.9%, respectively, of our consolidated
revenues. Our OTC commission rates vary by product and are based
on the volume of the commodity underlying the contract that is
traded.
</DIV>

<P align="center" style="font-size: 10pt;">44

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table presents, for the periods indicated,
selected statement of income (loss) data in dollars and as a
percentage of revenues for our OTC business segment:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="37%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap><B>Year Ended December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>%</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>%</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2002</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>%</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap><B>(dollar amounts in thousands)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Revenues(1):</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Transaction fees, net(2):</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    North American natural gas</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>29,046</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>48.1</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>16,814</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34.0</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>41,845</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>47.9</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    North American power</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,462</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,739</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22,255</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Global oil</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,999</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,844</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,205</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16.3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other commodities markets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,043</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,821</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,654</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Electronic trade confirmation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>789</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>165</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>39</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Order flow agreements shortfall<BR>
    payments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,068</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,091</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,259</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.7</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Data services fees</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,372</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,450</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>68</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Intersegment fees</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,530</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,735</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>62</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Trading access fees</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,371</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,699</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>95</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,757</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(75</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(0.1</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>60,437</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>49,387</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>87,407</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Operating expenses:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Selling, general, administrative and hosting expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35,173</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>58.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32,806</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>66.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>39,360</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>45.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Intersegment expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>353</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>79</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Depreciation and amortization</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,609</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,224</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,406</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15.3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total operating expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>50,135</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>83.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>50,109</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>101.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>52,766</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>60.4</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Operating income (loss)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,302</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(722</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1.5</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34,641</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>39.6</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other income (expense), net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(599</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1.0</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(185</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(0.4</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>490</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.6</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Income tax expense (benefit)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,366</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(781</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1.6</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,679</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13.4</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income (loss)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>6,337</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10.5</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(126</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(0.3</TD>
    <TD align="left" valign="bottom" nowrap>)%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>23,452</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26.8</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    We generate revenues from related parties in the ordinary course
    of our business. Related party revenues were $6.5&nbsp;million,
    $6.7&nbsp;million and $43.6&nbsp;million for the years ended
    December&nbsp;31, 2004, 2003 and 2002, respectively. For a
    discussion of our related parties, see note&nbsp;11 in our
    consolidated financial statements, which are included elsewhere
    in this prospectus.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    Our transaction fees are presented net of rebates. See
    &#147;&#151;&nbsp;Sources of Revenues&nbsp;&#151; Transaction
    Fees&#148;.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">45

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following tables present, for the periods indicated, the
total volume of the underlying commodity and number of contracts
traded in our OTC markets, measured in the units indicated in
the footnotes:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="71%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Year Ended December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2002</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>(in millions)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total Volume:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    North American natural gas(1)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>63,935</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34,257</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>84,302</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    North American power(2)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,153</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>575</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,230</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Global oil(3)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>926</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,667</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,439</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="71%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Year Ended December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2002</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>(in thousands)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Number of contracts traded(4):</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    North American natural gas</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25,574</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,703</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33,721</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    North American power</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,700</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>848</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,363</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Global oil</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,580</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,636</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,563</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other(5)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>124</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,083</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>358</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30,978</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24,270</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>44,005</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 8pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    Measured in million British thermal units, or MMBtu.</TD>
</TR>

<TR valign="top">
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    Measured in megawatt hours.</TD>
</TR>

<TR valign="top">
    <TD>(3)&nbsp;</TD>
    <TD align="left">
    Measured in equivalent barrels of oil.</TD>
</TR>

<TR valign="top">
    <TD>(4)&nbsp;</TD>
    <TD align="left">
    These OTC market volumes are converted into contracts based on
    the conversion ratios in the table below.</TD>
</TR>

<TR valign="top">
    <TD>(5)&nbsp;</TD>
    <TD align="left">
    Consists of the North American emissions, North American
    weather, North American coal, North American natural gas
    liquids, European power, European gas, global precious metals
    and/or global base metals commodities markets.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;
The following table presents the underlying commodity size for
selected OTC contracts traded in our OTC markets as well as the
relevant standard of measure for such contracts:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="59%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="left" nowrap><B>OTC Contract</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Size</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Measure</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Financial gas</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>MMBtu</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Physical gas</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>MMBtu</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    European gas</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>Therms per day</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    East power</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>800</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>Megawatt Hours per day</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    West power</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>400</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>Megawatt Hours per day</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Crude oil</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>Barrels</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Refined oil</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>Barrels</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Precious metals</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>Ounces</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;">46

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following chart presents the OTC commission fee revenues by
commodity traded in our markets for the periods presented:
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<IMG src="y06540y0654012.gif" alt="(INTERCONTINENTAL BAR CHART)">
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table presents our average daily open interest for
our cleared OTC contracts:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="73%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Year Ended</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2002</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>(in thousands)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Open Interest (in contracts):</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    North American gas</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>533</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>131</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>39</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    North American power</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>117</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Global oil</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>28</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>678</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>134</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>39</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our participants rely on our platform for price discovery,
hedging of physical commodities and risk management and comprise
a broad range of participant types. At December&nbsp;31, 2004,
we had over 660 trading participant firms in our OTC markets.
The concentration of revenues derived in our OTC business
segment from commercial users, including merchant energy
companies, oil producers and utilities, decreased to 56.5% in
2004 from 79.4% in 2001 as a result of the entry of
non-commercial participants into the markets for energy
commodities trading. The fastest growing participant segment of
our OTC commission revenues is the financial services sector,
which includes financial institutions, hedge funds and
proprietary trading firms. The entry of these market
participants is largely the result of the availability of both
electronically traded energy commodity contracts and cleared OTC
contracts. See &#147;Business&nbsp;&#151; Our Participant
Base&#148;.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We also offer trade confirmation and market data services
through our electronic trade confirmation service and market
data business, respectively. In April 2002, we began offering
our electronic trade confirmation service for trades executed in
OTC commodity markets. We do not expect fees from this service
to be a significant source of revenues in the near term,
although we believe that the availability of electronic
</DIV>

<P align="center" style="font-size: 10pt;">47

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left" style="font-size: 10pt;">
trade confirmation attracts a broader range of market
participants to our electronic platform, and increases the
operational incentives for them to trade on our electronic
platform. In November 2002, we launched our market data business
in response to growing demand for objective, transparent and
verifiable energy market data. Through our market data
subsidiary, the 10x Group, or 10x, we generate market
information and transaction-based indices based upon data
derived from actual trades executed, and trade confirmations
issued, in our marketplace.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Intersegment</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our OTC business segment provides and supports the platform for
electronic trading in our futures business segment. We determine
the intercompany or intersegment fees to be paid by the futures
business segment for using the electronic platform based on
transfer pricing standards and independent documentation.
Intersegment fees include charges for developing, operating,
managing and supporting the platform for electronic trading in
our futures business. The intersegment fees allocated to our
futures business segment were $7.5&nbsp;million,
$4.7&nbsp;million and $62,000 during 2004, 2003 and 2002,
respectively. These intersegment fees have no impact on our
consolidated operating results. We expect the structure of these
intersegment fees to remain unchanged and expect that they will
continue to have no impact on our consolidated operating results.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Sources of Revenues</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our revenues are comprised of transaction fees, data services
fees, trading access fees and other revenues.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Transaction Fees</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Transaction fees, including both futures exchange fees and OTC
commission fees, have accounted for, and are expected to
continue to account for, a substantial portion of our revenues.
Transaction fees consist of:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    exchange fees earned on futures transactions;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    commission fees earned on OTC transactions;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    electronic confirmation fees;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    shortfall payments made under our order flow agreements, which
    applied through the end of 2004.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
 Transaction fees were $90.9&nbsp;million, $81.4&nbsp;million
and $118.8&nbsp;million in 2004, 2003 and 2002, respectively,
and accounted for 83.9%, 86.9% and 94.7% of our consolidated
revenues for 2004, 2003 and 2002, respectively. Transaction
fees, net of intersegment fees, accounted for 82.0%, 81.4% and
82.7% of revenues generated by our futures business segment in
2004, 2003 and 2002, respectively, and accounted for 85.8%,
92.9% and 99.9% of revenues generated by our OTC business
segment in 2004, 2003 and 2002, respectively. Transaction fees,
except for shortfall payments, are recognized as revenues as
services are provided. Transaction fees in our futures business
segment are denominated in pounds sterling prior to translation
and consolidation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In our futures business segment, we charge exchange fees to both
the buyer and the seller in each transaction. In this segment,
our exchange fees are calculated and collected by LCH.Clearnet
on our behalf. Exchange fees are based on the number of
contracts traded during each month multiplied by the commission
rate. A change to either our commission rate or to the volume of
contracts executed through our futures business directly affects
the revenues of our futures business.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Transaction fees in our futures business segment are presented
net of rebates. We have granted trade rebates to local floor
members to generate market liquidity. Under this arrangement, we
rebate a percentage of the exchange fee for contracts bought and
sold on our open-outcry trading floor on the same day for the
same price. In addition, in November 2004, we implemented a two
month fee rebate program when we transitioned the morning IPE
Brent Crude futures session exclusively to our electronic
platform. Under this program, we rebated to each member all
exchange fees paid to execute trades in IPE Brent Crude futures
contracts on our electronic platform during the morning session,
as well as exchange fees paid to execute these contracts by
certain local floor members trading on our open-outcry trading
floor during our afternoon trading session. This program
terminated on December&nbsp;31, 2004. Trade rebates to local
floor members amounted to $625,000,
</DIV>

<P align="center" style="font-size: 10pt;">48

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<DIV align="left" style="font-size: 10pt;">
$687,000 and $562,000 in 2004, 2003 and 2002, respectively. The
rebate fees under the 2004 rebate program amounted to
$2.3&nbsp;million in the aggregate for the months of November
and December 2004. While we do not currently have any plans to
adjust our commission rates, we evaluate these rates on a
regular basis.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In our OTC business segment, we charge commission fees to both
the buyer and the seller in each transaction executed on our
platform. The commission fees are based on the underlying
commodity volume of each product traded multiplied by the
commission rate for that product. We also accept transactions
that participants execute off-platform but wish to have
processed for clearing. For these transactions, we charge both
the buyer and seller, but at typically half the commission rate
for on-platform execution. We calculate and collect commission
fees from our customers directly, other than trades that are
cleared through LCH.Clearnet, for which LCH.Clearnet performs
the commission fee calculation and collection function. The
transaction fees in our OTC business segment also include fees
derived from our electronic trade confirmation service. We
charge a standard fee across all products for each trade
confirmation successfully submitted by a participant.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Changes in the volume of contracts traded on our electronic
platform and in our commission rates directly affect transaction
fees in our OTC segment. Since launching our electronic platform
in 2000, we have, in limited circumstances, adjusted our
commission rates or waived our commissions with respect to
certain products. We have, for example, waived commission fees
on our WTI oil bullet swap contracts for the period from
November 2004 through December 2005. We also reduced the
commission rate charged in our global precious metal trading in
June 2002 and continue to offer reduced commission rates. While
we do not currently have any plans to make any adjustment to our
commission rates, we continue to evaluate these rates on a
regular basis.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Transaction fees in our OTC business segment are presented net
of rebates. We rebate a portion of the commission fees paid by
certain market makers in the OTC market-maker program. In this
program, certain participants agree to make a two-sided market
(<I>i.e.</I>, posting a simultaneous bid and offer) with respect
to a particular contract at a specified price spread (the
difference between the bid and offer). The OTC fee rebates to
market makers amounted to $436,000, $283,000 and $325,000 in
2004, 2003 and 2002, respectively. The market-maker program also
includes a monthly fee that we pay to certain participants that
participate in this program. See &#147;&#151;&nbsp;Components of
Expenses&nbsp;&#151; Selling, General and Administrative&#148;.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In order to build and maintain liquidity in the products traded
on our platform, we entered into order flow agreements with our
Initial Shareholders upon our formation and the Gas and Power
Firms in November 2000, in each case pursuant to which these
parties committed collectively to provide a minimum aggregate
amount of order flow. The commission rates for the Initial
Shareholders and Gas and Power Firms under the order flow
agreements were the same as the rates for all other participants
on our electronic platform. If the volume traded in any period
fell short of the agreed minimum, these parties were required to
pay us a shortfall payment based on the additional commission
revenues we would have earned had the minimum volume been met.
We also entered into order flow commitments with seven companies
during November 2001 to trade OTC European gas products on our
electronic platform. We recognized order flow shortfall revenues
of $1.1&nbsp;million, $7.1&nbsp;million and $3.3&nbsp;million in
2004, 2003 and 2002, respectively. The order flow agreements
with our Initial Shareholders and the Gas and Power Firms
expired in 2002 and 2003, respectively, and the European gas
order flow agreements expired in 2004. For a discussion of our
order flow agreements with our Initial Shareholders and the Gas
and Power Firms, please refer to &#147;Certain Relationships and
Related Transactions&#148; and notes&nbsp;1 and 12 to our
audited consolidated financial statements and related notes
included elsewhere in this prospectus.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have maintained liquidity following the expiration of all of
our order flow agreements. We are currently not a party to any
order flow agreements and do not intend to enter into order flow
agreements in the future. We believe that the willingness of our
previously committed order flow providers to continue to trade
at current levels will be influenced by a variety of factors,
including prevailing conditions in the commodities markets. We
experienced a decline in our OTC global oil commission fee
revenues following the expiration of certain order flow
agreements in October 2002. While this may have been caused by a
combination of factors relating to order flow, sales and
marketing activities, market conditions and competition, we
believe that we will be able to continue to attract trading in
these markets in the future without order flow agreements.
</DIV>

<P align="center" style="font-size: 10pt;">49

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table presents, for the periods indicated, the
commission fees that were required to be paid under the order
flow agreements and the expiration dates of these agreements.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="53%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Year Ended December&nbsp;31,</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2002</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Expiration Date</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>(in thousands)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    North American natural gas and power</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>6,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>12,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>June&nbsp;2003</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Global oil</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,692</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>October 2002</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Global precious metals</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>401</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>August 2002</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    European gas</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,075</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,303</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,691</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>December&nbsp;2004</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total commission fees</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>1,075</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>7,303</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>22,784</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Data Services Fees</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We generate data services fees in both our futures and OTC
business segments. Data services fees were $9.7&nbsp;million,
$7.7&nbsp;million and $5.1&nbsp;million in 2004, 2003 and 2002,
respectively.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In our futures business segment, data services fees consist of
terminal fees and license fees that we receive from data vendors
in exchange for the provision of real-time price information
generated in our futures markets. We invoice these data vendors
monthly for terminal fees based on the number of terminals that
carry our futures market data. Each data vendor also pays an
annual license fee to us. Annual license fee revenues are
deferred and amortized ratably over the period to which they
relate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In our OTC business segment, data services fees consist of
subscription fees that we receive from market participants that
subscribe to our data services through 10x. 10x has an exclusive
license to use our OTC market data and publishes the 10x End of
Day report on a monthly basis, as well as Market Price
Validation curves, which are available to subscribers for a
monthly subscription fee. 10x also markets real-time view only
screen access to OTC markets and charges subscribers a fee that
varies depending on the number of users and the markets accessed
at each subscribing company. We invoice view only subscribers
either on a monthly or annual basis. The revenues we receive
from data services fees are deferred and amortized ratably over
the period to which they relate.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Trading Access Fees</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Trading access fees are revenues generated from membership and
system user fees charged to our futures exchange members and
from minimum monthly commission fees charged to our OTC
participants. We recorded trading access fees of
$3.6&nbsp;million, $2.5&nbsp;million and $490,000 in 2004, 2003
and 2002, respectively.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In our futures business, we generate revenue from IPE members
from, among other things, annual membership and subscription
fees and system user fees to IPE members who access our
electronic platform. We recorded annual fees related to futures
exchange membership, subscription fees and system user fees of
$1.2 million, $762,000 and $395,000 in 2004, 2003 and 2002,
respectively. We defer revenues derived from membership and
subscription fees and amortize them ratably over the period to
which they relate. We recognize revenues derived from system
user fees as services are provided.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In our OTC business segment, we charge monthly minimum
commission fees to participants that are registered to trade OTC
natural gas and power products on our electronic platform. For
participants that are not active traders, the minimum commission
fees are based on their historic trading activity and the number
of users the participant firm has registered to trade on our
platform. We recognize the difference between the monthly
minimum commission fee for a given participant and the actual
amount of commission fees generated by such participant for
trading activity in that month as minimum commission trading
access revenues. As of December 2004, of the
661&nbsp;participant trading firms that had trading access to
our platform, 211 participants were required to pay monthly
minimum commission fees. From these participants, we recognized
$2.4&nbsp;million, $1.7&nbsp;million and $95,000 in minimum
commission trading access revenues during 2004, 2003 and 2002,
respectively, relating to minimum commission trading shortfalls.
</DIV>

<P align="center" style="font-size: 10pt;">50

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<DIV style="margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Other Revenues</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Other revenues primarily relate to revenues generated from
training seminars, communication charges and equipment rentals,
and licensing, service and technology development fees charged
to CCX. We generated $4.2&nbsp;million, $2.1&nbsp;million and
$1.1&nbsp;million in other revenues in 2004, 2003 and 2002,
respectively. We recognize revenues generated from training
seminars and communication charges and equipment rentals as
services are provided. We charge equipment rentals in advance
and amortize the fee over the period to which it relates. We
have been contracted to provide, design and service an
electronic futures and OTC trading platform on behalf of CCX.
CCX is a self-regulated exchange that administers a voluntary
multi-sector greenhouse gas reduction and trading program for
North America. We invoice CCX for license and service fees
monthly in advance of the period to which they apply. We
recognize these fees as revenues as the services are provided,
and we recognize technology development fees as revenues when
the development work is completed and accepted by CCX. Our
arrangement with CCX began in July 2003, and we recognized
revenues of $1.7&nbsp;million and $605,000 in 2004 and 2003,
respectively, pursuant to our contractual relationship. For a
discussion of this arrangement, see &#147;Certain Relationships
and Related Transactions&#148;.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Components of Expenses</B>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Cost of Hosting</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Cost of hosting primarily consists of hosting and participant
network expenses. Cost of hosting expenses were
$1.3&nbsp;million, $1.7&nbsp;million and $4.0&nbsp;million in
2004, 2003 and 2002, respectively. Our hosting expenses include
the amounts we pay for the physical facilities, maintenance and
other variable costs associated with securely housing the
hardware used to operate our electronic platform, as well as our
redundant disaster recovery facility. Our participant network
expenses include the amounts we pay to provide a participant
with direct connectivity to our platform. Because our
Internet-based electronic platform is highly scalable, we
anticipate that the cost of hosting will remain relatively
constant in the near term, even though we believe that we will
continue to increase the number of participants trading on our
electronic platform. Prior to 2003, we used a private network
connection that did not have the scalability and cost efficiency
associated with our current Internet-based platform. In
addition, in early 2003, we began to maintain and support our
information security system with internal resources. Prior to
2003, we outsourced our information security to a nationally
recognized encryption technology company. By changing certain
vendors and by transitioning our participant base to our
Internet browser for access to our electronic platform, we have
been able to reduce our participant network expenses while
improving system performance, resulting in faster execution and
increased system availability.
</DIV>

<DIV style="margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Compensation and Benefits</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Compensation and benefits expenses primarily consist of
salaries, bonuses, payroll taxes, employer-provided medical and
other benefit plan costs and recruiting costs. Compensation and
benefits expenses were $30.1&nbsp;million, $26.2&nbsp;million
and $27.9&nbsp;million in 2004, 2003 and 2002, respectively.
Substantially all of our employees are full-time employees. We
capitalized and recorded as property and equipment a portion of
our compensation and benefits costs for technology employees
engaged in software development and enhancement to our
electronic platform. We expect that our compensation and
benefits expense will remain consistent with current levels as a
percentage of total revenues due to additional employees
associated with the growth of our business, partially offset by
a reduction in our headcount due to the closure of our
open-outcry trading floor.
</DIV>

<DIV style="margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Professional Services</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Professional services expenses primarily consist of outside
legal, accounting and other professional and consulting services
expenses. Professional expenses were $14.5&nbsp;million,
$15.1&nbsp;million and $15.9&nbsp;million in 2004, 2003 and
2002, respectively. We capitalized and recorded as property and
equipment a portion of the costs associated with fees for
technology consultants engaged in software development and
enhancements to our electronic platform. We expensed the
remaining portion of these fees in the month in which they were
incurred. We engaged a number of consultants in our futures
business segment to facilitate ongoing technology development,
maintenance and support work in connection with the migration of
trading of our futures contracts to our electronic platform and
the support of the legacy systems used in the operation of the
</DIV>

<P align="center" style="font-size: 10pt;">51

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left" style="font-size: 10pt;">
exchange floor. We reduced the number of consultants in our
futures business segment during 2004 following the substantial
completion of development relating to futures trading on our
electronic platform and due to the replacement of consultants
with permanent staff over the course of 2004.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We incurred substantial accounting and legal fees in connection
with external and internal audit functions, the regulatory and
disciplinary functions of our futures markets, the negotiation
of new clearing agreements with LCH.Clearnet and the ongoing
legal fees associated with the NYMEX and EBS copyright and
patent infringement litigation. As a public company, we will be
subject to the requirements of the Sarbanes-Oxley Act of 2002,
which may require us to incur significant expenditures in the
near term to establish systems and hire and train personnel to
comply with these requirements. In addition, as a public
company, we expect to incur additional costs for external
advisors such as legal, accounting and auditing fees, as well as
additional marketing and investor relations expenses. Even with
these additional public company expenses, we anticipate that
professional services expenses will decrease in the current and
future periods due to the reduction in consultants at the IPE
and the reduction in legal fees at the conclusion of the NYMEX
and EBS cases.
</DIV>

<DIV style="margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Selling, General and Administrative</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Selling, general and administrative expenses were
$13.1&nbsp;million, $12.4&nbsp;million and $12.4&nbsp;million in
2004, 2003 and 2002, respectively. Rent and occupancy expenses
and marketing and market-maker expenses are the two major
expense categories in selling, general and administrative
expenses in 2004, 2003 and 2002.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Rent and Occupancy Expenses.</I> Rent and occupancy expenses
were $4.1&nbsp;million, $3.8&nbsp;million and $3.2&nbsp;million
in 2004, 2003 and 2002, respectively. We currently lease office
space in Atlanta, New York, Houston, Chicago, London, Singapore
and Calgary. Our rent costs consist primarily of rent expense
for these properties. See &#147;Business&nbsp;&#151;
Property&#148; for a discussion on our rental properties. Our
occupancy expenses primarily relate to the use of electricity,
telephone lines and other miscellaneous operating costs. As a
result of our recent decision to close our open-outcry trading
floor on April&nbsp;7, 2005, we expect our rent and occupancy
expenses will decrease in future periods.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Marketing and Market-Maker Expenses.</I> Marketing and
market-maker expenses were $1.6&nbsp;million, $1.2&nbsp;million
and $1.4&nbsp;million during 2004, 2003 and 2002, respectively.
Marketing expenses primarily consist of advertising, public
relations and product promotion campaigns used to promote brand
awareness as well as new and existing products and services.
These expenses also include our participation in seminars, trade
shows, conferences and other industry events. The level of
marketing activity, and thus the amount of related expenses, may
vary from period to period based upon management&#146;s
discretion and available opportunities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Market-maker expenses include fees we incur under our
market-maker program. Under this program, we allow certain
participants to execute trades on our platform at no charge and,
beginning in 2004, paid them a monthly fee in exchange for their
commitment to make markets on our platform within a specified
price range for specific commodity markets. We recognized
$778,000 in market-maker expenses in 2004. Such amounts are
treated as expenses as we receive no fees from these market
makers. As of February 2005, we maintained market-maker programs
only in OTC oil bullet swaps.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Other.</I> Other costs include all selling, general and
administrative costs not included in separate expense categories
and primarily consist of insurance expense, hardware and
software support expense, telephone and communications expense,
corporate insurance expense, travel expense, meals and
entertainment expense and dues, subscriptions and registration
expense. We expect our selling, general and administrative
expenses to increase slightly in absolute terms in future
periods in connection with the growth of our business, partially
offset by lower selling, general and administrative costs
associated with closure of our open-outcry trading floor. As a
percentage of total revenues, our selling, general and
administrative expenses may decrease in future periods due to
higher revenue growth.
</DIV>

<DIV style="margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Depreciation and Amortization</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Depreciation and amortization expenses were $17.0&nbsp;million,
$19.3&nbsp;million and $14.4&nbsp;million in 2004, 2003 and
2002, respectively. We depreciate and/or amortize costs related
to our property and equipment, including computer and network
equipment, software and internally developed software, office
furniture and equipment and leasehold improvements. We compute
depreciation expense using the straight-line method based on
</DIV>

<P align="center" style="font-size: 10pt;">52

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<DIV align="left" style="font-size: 10pt;">
estimated useful lives of the assets, or in the case of
leasehold improvements, the shorter of the lease term or the
estimated useful life of the assets, which range from three to
seven years. Gains on disposal of property and equipment are
included in other income, losses on disposals of property and
equipment are included in depreciation expense and maintenance
and repairs are expensed as incurred. In accordance with
SFAS&nbsp;No.&nbsp;142, beginning in 2002, we ceased amortizing
goodwill and intangible assets with indefinite lives. We
continue to amortize intangible assets with contractual or
finite useful lives, in each case over the estimated useful life
of five years.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We capitalize costs, both internal and external, direct and
incremental, related to software developed or obtained for
internal use in accordance with AICPA Statement of Position
98-1, <I>Accounting for Costs of Computer Software Developed or
Obtained for Internal Use</I>. Costs incurred in the application
development phase are capitalized and amortized over the useful
life of the software, for a period not to exceed three years.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We amortize the licensing fees we pay to eSpeed for a
non-exclusive license to use its patent related to an automated
futures trading system in the United States over the period to
which the license fees relate. We recognized $2.0&nbsp;million,
$2.0&nbsp;million and $1.5&nbsp;million of such amortization
expense in 2004, 2003 and 2002, respectively. This patent
expires in February 2007.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We anticipate that depreciation and amortization expenses will
decrease in the current and future periods due to certain
property and equipment purchased in prior years becoming fully
depreciated, the expiration of the eSpeed patent in February
2007 and lower computer hardware costs in the future due to
declining costs of technology.
</DIV>

<DIV style="margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Other Income (Expense)</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We had other income of $1.3&nbsp;million, $949,000 and
$1.5&nbsp;million in 2004, 2003 and 2002, respectively. Other
income (expense)&nbsp;consists primarily of interest income and
expense, as well as gains and losses on currency transactions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In our OTC business segment, we generate interest income from
the investment of our cash and cash equivalents, short-term
investments, restricted cash and restricted short-term
investments. Our OTC business segment strategy is to invest
excess cash in short-term AAA-rated securities. In our futures
business segment, we earn interest income on excess cash
balances that primarily relate to money market deposits in the
United Kingdom. Our futures business segment policy is to invest
two-thirds of all our cash funds at no more than six banks with
an IBCA credit rating of AAA or AA+, with no more than 50% at
any one bank. Under this policy, the remaining one-third of all
cash funds may be invested at no more than three additional
banks with an IBCA rating of AA or above.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Interest expense currently consists of interest from capitalized
leases and interest on outstanding indebtedness under our
revolving credit facility. Prior to repayment in November 2002,
we also incurred interest expense on the related-parties notes
payable.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Other income (expense)&nbsp;also relates to gains and losses
from foreign currency transactions, such as those resulting from
the settlement of foreign receivables or payables or cash
accounts held in U.S.&nbsp;dollars by our U.K. subsidiaries. We
seek to manage our foreign exchange translation risk and
exposure in part through converting our U.K. subsidiaries&#146;
cash to investments denominated in U.S.&nbsp;dollars. However,
because the functional currency of our U.K. subsidiaries is
pounds sterling, we are subject to transaction gains and losses
for the re-measurement of the U.S.&nbsp;dollar cash investments
held by our U.K. subsidiaries due to foreign currency exchange
rate fluctuations between periods.
</DIV>

<DIV style="margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Provision for Income Taxes</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We incurred income tax expenses of $11.8&nbsp;million,
$6.5&nbsp;million and $17.7&nbsp;million in 2004, 2003 and 2002,
respectively. Our provision for income taxes consists of current
and deferred tax provisions relating to federal, state and local
taxes, as well as taxes related to foreign subsidiaries. We file
a consolidated United States federal income tax return and file
state income tax returns on a separate, combined or consolidated
basis in accordance with relevant state laws and regulations.
Our foreign subsidiaries are based in the United Kingdom and we
file separate local country income tax returns and take
advantage of the United Kingdom&#146;s group relief provisions
when applicable. The difference between our actual income tax
rate and our effective tax rate for a
</DIV>

<P align="center" style="font-size: 10pt;">53

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left" style="font-size: 10pt;">
given fiscal period is primarily a reflection of the tax effects
of our foreign operations, general business and tax credits,
state income taxes and the non-deductibility of certain
expenses. We have made provisions for U.S.&nbsp;income taxes on
all undistributed earnings of our foreign subsidiaries as such
earnings are not expected to be permanently reinvested.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Results of Operations</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 3pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="49%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Year Ended December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2002</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>(in thousands, except for share and per share data)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Consolidated Statement of Income Data</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="14">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Revenues:(1)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Transaction fees, net(2)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>90,906</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>81,434</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>118,794</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Data services fees</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,691</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,742</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,141</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Trading access fees</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,595</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,461</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>490</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,222</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,109</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,065</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>108,414</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>93,746</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>125,490</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Operating expenses:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cost of hosting</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,279</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,715</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,962</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Compensation and benefits</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30,074</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26,236</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>27,906</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Professional services</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,523</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,138</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,876</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Selling, general and administrative</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,120</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,398</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,425</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Depreciation and amortization</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,024</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,341</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,368</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total operating expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>76,020</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>74,828</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>74,537</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Operating income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32,394</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,918</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>50,953</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total other income, net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,328</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>948</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,492</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Income before income taxes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33,722</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,866</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>52,445</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Income tax expense</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,773</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,489</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,739</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>21,949</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>13,377</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>34,706</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deduction for accretion of redeemable common stock(3)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,768</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,656</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income available to common shareholders</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>21,949</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>11,609</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>31,050</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Earnings per common share:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Basic and Diluted</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.14</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="14">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Weighted average common shares outstanding:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Basic</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>211,460,434</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>217,315,866</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>217,570,408</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Diluted</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>212,248,312</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>218,558,834</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>219,400,380</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    We generate revenues from related parties in the ordinary course
    of our business. For a presentation and discussion of our
    revenues attributable to related parties for the years ended
    December&nbsp;31, 2004, 2003 and 2002, see our consolidated
    statements of income and note&nbsp;11 in our consolidated
    financial statements that are included elsewhere in this
    prospectus.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    Our transaction fees are presented net of rebates. See
    &#147;&#151;&nbsp;Sources of Revenues&nbsp;&#151; Transaction
    Fees&#148;.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(3)&nbsp;</TD>
    <TD align="left">
    We recorded our Class&nbsp;B redeemable common stock upon its
    issuance on June&nbsp;18, 2001 at its discounted present value
    of $60.2&nbsp;million. We recorded charges to retained earnings
    for the accretion of this amount up to the $67.5&nbsp;million
    redemption value of our Class&nbsp;B redeemable common stock
    over a two-year period ending in June 2003, which was the
    earliest potential redemption date.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">54

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Key Statistical Information</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table presents key transaction volume information,
as well as other selected operating information, for the periods
presented. A description of how we calculate our market share,
our trading volumes and other operating measures is set forth
below.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 8pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="68%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>


<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Year Ended December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2002</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>(in thousands, except for</B></TD><TD></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>percentages)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Operating Data:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Our Market Share of Selected Key Products:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total crude oil futures contracts traded globally</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>78,477</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>69,450</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>67,173</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    IPE Brent Crude oil futures contracts traded</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25,458</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24,013</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21,493</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Our crude oil futures market share(1)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32.4</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34.6</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32.0</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total cleared Henry Hub natural gas contracts traded on us and
    NYMEX-ClearPort</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22,308</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,869</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,170</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Our cleared Henry Hub natural gas contracts traded</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,954</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,512</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>792</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Our market share&nbsp;&#151; cleared Henry Hub natural gas vs.
    NYMEX-ClearPort(2)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>76.0</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>65.7</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>67.7</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total cleared PJM financial power contracts traded on us and
    NYMEX-ClearPort</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,256</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>149</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Our cleared PJM financial power contracts traded</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,022</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Our market share&nbsp;&#151; cleared PJM financial power vs.
    NYMEX-ClearPort(3)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>81.4</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.0</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Our Average Daily Trading Fee Revenues(4):</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Our futures business average daily exchange fee revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>179</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>158</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>125</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Our bilateral OTC business average daily commission fee revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>80</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>112</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>330</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Our cleared OTC business average daily commission fee revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>94</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Our total average daily commission fee and exchange fee revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>353</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>294</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>460</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Our Trading Volume(5):</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Annual futures volume</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35,541</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33,341</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30,441</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Futures average daily volume</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>140</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>132</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>121</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Annual OTC volume</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30,978</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24,270</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>44,005</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    OTC average daily volume</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>123</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>97</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>175</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    OTC Participants Trading Commission Percentages:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Commercial companies (including merchant energy)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>56.5</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>64.1</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>81.7</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Banks and financial institutions</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22.4</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>31.3</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18.1</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Hedge funds, locals and proprietary trading shops</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21.1</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.6</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.2</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    OTC Trading Commission fees:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Percentage of commission fees by the top 20 customers</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>64.8</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>69.3</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>75.6</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Percentage of commission fees by our shareholders</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25.1</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>40.4</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>61.2</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 8pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    Our crude oil futures market share is calculated based on the
    number of IPE Brent Crude futures contracts traded as compared
    to the total number of IPE Brent Crude futures contracts and
    NYMEX Light Sweet Crude and Dublin Brent Crude futures contracts
    traded.</TD>
</TR>

<TR valign="top">
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    Our cleared Henry Hub natural gas market share versus
    NYMEX-ClearPort is calculated based on the number of
    IntercontinentalExchange cleared Henry Hub natural gas contracts
    traded as a percentage of the total IntercontinentalExchange
    cleared Henry Hub natural gas contracts and NYMEX-ClearPort
    Henry Hub natural gas futures contracts traded.</TD>
</TR>

<TR valign="top">
    <TD>(3)&nbsp;</TD>
    <TD align="left">
    Our cleared PJM financial power market share versus
    NYMEX-ClearPort is calculated based on the number of
    IntercontinentalExchange cleared PJM financial power contracts
    traded as a percentage of the total IntercontinentalExchange
    cleared PJM financial power contracts and NYMEX-ClearPort
    cleared PJM financial power contracts traded. PJM refers to the
    Pennsylvania, New Jersey and Maryland power hub. The
    NYMEX-ClearPort cleared PJM financial power contract was
    launched in April&nbsp;2003 and our PJM financial power contract
    was launched in November 2003. Data regarding the volumes of
    NYMEX-ClearPort cleared PJM for annual contracts traded is
    derived from the Futures Industry Association.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(4)&nbsp;</TD>
    <TD align="left">
    Represents the total commission fee and exchange fee revenues
    for the year divided by the number of trading days during that
    year.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(5)&nbsp;</TD>
    <TD align="left">
    Represents the total volume, in contracts, for the year divided
    by the number of trading days during that year.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">55

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;
For purposes of our operating data, we calculate our volumes
based on the number of contracts traded in our markets, or based
on the number of round turn trades. Each &#147;round turn&#148;
represents a matched buy and sell order of one contract. Each
side to a contract is matched and treated as one contract and
each side is not separately calculated. The volume of contracts
traded in a given market is a widely recognized indicator of the
liquidity in that market, including our markets.
</DIV>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B>Year Ended December&nbsp;31, 2004 Compared to Year Ended
    December&nbsp;31, 2003</B></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Overview</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Consolidated net income increased $8.6&nbsp;million, or 64.1%,
to $21.9&nbsp;million in 2004 from $13.4&nbsp;million in 2003.
During this period, net income from our futures business segment
increased $2.1&nbsp;million, or 15.6%, to $15.6&nbsp;million in
2004 from $13.5&nbsp;million in 2003 and net income from our OTC
business segment increased to $6.3&nbsp;million in 2004 from a
net loss of $126,000 in 2003. Consolidated operating income, as
a percentage of consolidated revenues, increased to 29.9% in
2004 from 20.2% in 2003. Consolidated net income, as a
percentage of consolidated revenues, increased to 20.2% in 2004
from 14.3% in 2003.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our consolidated revenues grew by $14.7&nbsp;million, or 15.6%,
to $108.4&nbsp;million in 2004 from $93.7&nbsp;million in 2003.
This increase is attributable to increased trading volumes on
our electronic platform and increased non-transaction revenues,
including data services fees, trading access fees and CCX
licensing, service and development fees. A significant factor
driving our revenues and volume growth during this period was
the growth in trading volumes of our cleared OTC contracts.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Consolidated operating expenses increased slightly to
$76.0&nbsp;million in 2004 from $74.8&nbsp;million in 2003,
representing an increase of 1.6%, compared to a 15.6% increase
in consolidated revenues during the same period. Given the fixed
nature of our operating expenses, we generally have been able to
increase revenues through increased trading volumes while
holding operating expenses relatively constant. This operating
leverage has resulted in improved profitability and we believe
is one of the key benefits of operating our electronic platform.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Revenues</I></B></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Transaction Fees</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Consolidated transaction fees increased $9.5&nbsp;million, or
11.6%, to $90.9&nbsp;million in 2004 from $81.4&nbsp;million in
2003. Transaction fees, as a percentage of consolidated
revenues, decreased to 83.9% in 2004 from 86.9% in 2003.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Transaction fees generated in our futures business segment
increased $5.5&nbsp;million, or 13.9%, to $45.5&nbsp;million in
2004 from $40.0&nbsp;million in 2003, while declining slightly
as a percentage of consolidated revenues to 42.0% in 2004 from
42.6% in 2003. The absolute increase in transaction fees was
primarily due to increased trading volumes and an increase in
the pounds sterling to U.S.&nbsp;dollar exchange rate, partially
offset by $2.3&nbsp;million in fees rebated in November and
December 2004 as part of our rebate program for IPE Brent Crude
futures contracts traded electronically. Volumes in our futures
business segment increased 6.6%, to 35.5&nbsp;million contracts
traded in 2004 from 33.3&nbsp;million contracts traded in 2003.
The average exchange rate of pounds sterling to the
U.S.&nbsp;dollar increased 12.0%, to 1.8296 in 2004 from 1.6341
in 2003.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Transaction fees generated in our OTC business segment increased
$3.9&nbsp;million, or 9.5%, to $45.4&nbsp;million in 2004 from
$41.5&nbsp;million in 2003, primarily due to increased trading
volumes, which was partially offset by a reduction in our order
flow shortfall payments. Transaction fees in this segment, as a
percentage of consolidated revenues, decreased to 41.9% in 2004
from 44.2% in 2003. The number of transactions or trades
executed in our OTC business segment increased by 55.1% to
1,061,629 trades in 2004 from 684,495 trades in 2003. The
increase in trades was partially offset by a 29.4% decrease in
the average revenues per transaction in 2004 as compared to
2003. The decline in average revenues per transaction was due in
part to an increased number of lower volume transactions,
primarily as a result of newer market participants generally
trading in smaller contract sizes, and a change in the mix of
contracts traded, with a larger number of contracts traded
related to commodities with lower commission rates. Increased
volumes in our OTC business segment were
</DIV>

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<DIV align="left" style="font-size: 10pt;">
primarily due to increased trading volumes in North American
natural gas and power markets as a result of the availability of
cleared OTC contracts and the improvement in credit quality in
the merchant energy sector, as well as increased liquidity
brought by new market participants. Transaction fees generated
by trading in North American natural gas contracts increased
$12.2&nbsp;million, or 72.7%, to $29.0&nbsp;million in 2004 from
$16.8&nbsp;million in 2003. In addition, transaction fees
generated by trading in North American power contracts increased
$3.7&nbsp;million, or 64.9%, to $9.5&nbsp;million in 2004 from
$5.7&nbsp;million in 2003. The continued growth in trading
volumes in cleared OTC contracts can be attributed to the
following trends:
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    The use of cleared OTC contracts eliminates the need for a
    counterparty to post capital against each trade and also reduces
    requirements for entering into multiple negotiated bilateral
    settlement agreements to enable trading with other
    counterparties. We believe that the introduction of cleared
    contracts has facilitated trading by market participants that
    otherwise would not have engaged in trading in energy
    derivatives.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    The increase in participants in the markets for energy
    commodities trading has increased overall liquidity in our
    markets, particularly the liquidity of cleared North American
    natural gas and power contracts.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The increase in transaction fees generated by trading in OTC
North American natural gas and power contracts was partially
offset by a decrease in transaction fees generated by our OTC
global oil contracts. Transaction fees derived from trading in
global oil contracts decreased $4.8&nbsp;million, or 54.8%, to
$4.0&nbsp;million in 2004 from $8.8&nbsp;million in 2003. This
decrease is attributable to several factors, including the
expiration of order flow agreements in late 2002, the effect of
which manifested itself in 2003 and 2004, sales and marketing
approaches, competition and specific differences in trading in
the global oil market compared to the North American natural gas
and power markets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Revenues derived from order flow shortfall payments in our OTC
business segment decreased $6.0&nbsp;million, or 84.9%, to
$1.1&nbsp;million in 2004 from $7.1&nbsp;million in 2003. This
decrease was due to a $6.4&nbsp;million shortfall payment
recognized from the Gas and Power Firms in 2003, partially
offset by an increase of $365,000 in the 2004 European gas
shortfall payments as compared to 2003 European gas shortfall
payments. Consolidated order flow shortfall payments, as a
percentage of consolidated revenues, decreased to 1.0% in 2004
from 7.6% in 2003. These agreements are no longer in effect.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Revenues derived from electronic trade confirmation fees in our
OTC business segment increased 378.3% from 2003 to 2004. During
2004, 199,290 trades were matched through our electronic trade
confirmation service, compared to 64,383 trades in 2003.
Consolidated electronic trade confirmation fees, as a percentage
of consolidated revenues, increased to 0.7% in 2004 from 0.2% in
2003.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Data Services Fees</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Consolidated data services fees increased $1.9&nbsp;million, or
25.2%, to $9.7&nbsp;million in 2004 from $7.7&nbsp;million in
2003. This increase was primarily due to increased data services
fees in our OTC business segment related to fees from 10x view
only screen access and End of Day reports, which we introduced
in November 2002. The number of individual subscribers for 10x
view only screen access increased to 272 as of December&nbsp;31,
2004 from 193 as of December&nbsp;31, 2003. We continued to
enroll new monthly subscribers for these services. In March
2004, we also launched a data service known as MPV, which
provides monthly price validation curves, and 21&nbsp;companies
subscribed to this service as of December&nbsp;31, 2004.
Consolidated data services fees, as a percentage of consolidated
revenues, increased to 8.9% in 2004 from 8.3% in 2003.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Trading Access Fees</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Consolidated trading access fees increased $1.1&nbsp;million, or
46.1%, to $3.6&nbsp;million in 2004 from $2.5&nbsp;million in
2003. This increase was primarily due to increased monthly
minimum commission fees received in our OTC business segment.
The monthly weighted-average number of participants required to
pay monthly minimum commission fees increased to 212 in 2004
from 143 in 2003. We continued to increase both the number of
participants subject to monthly minimum commission fees as well
as the number of users
</DIV>

<P align="center" style="font-size: 10pt;">57

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<DIV align="left" style="font-size: 10pt;">
accessing the platform at these participants. During 2004 and
2003, we received $2.4&nbsp;million and $1.7&nbsp;million,
respectively, in monthly minimum commission fees in our OTC
business segment and $1.2&nbsp;million and $762,000,
respectively, in membership subscriptions and system user fees
in our futures business segment. Consolidated trading access
fees, as a percentage of consolidated revenues, increased to
3.3% in 2004 from 2.6% in 2003.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Other Revenue</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Consolidated other revenues increased $2.1&nbsp;million, or
100.2%, to $4.2&nbsp;million in 2004 from $2.1&nbsp;million in
2003. This increase was primarily due to increased licensing,
service and technology development fees charged to CCX and
increased communication charges in our futures business segment.
Consolidated other revenues, as a percentage of consolidated
revenues, increased to 3.9% in 2004 from 2.2% in 2003.
</DIV>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Expenses</I></B></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Cost of Hosting</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Consolidated cost of hosting expenses decreased $436,000, or
25.4%, to $1.3&nbsp;million in 2004 from $1.7&nbsp;million in
2003, primarily due to reduced costs associated with our move to
an Internet-based platform from a private network connection in
early 2003. During 2004, we paid $1.2&nbsp;million for hosting
expenses and $76,000 for participant network expenses, compared
to $1.3&nbsp;million for hosting expenses, $268,000 for
participant network expenses and $111,000 for security services
expenses in 2003. Consolidated cost of hosting expenses, as a
percentage of consolidated revenues, decreased to 1.2% in 2004
from 1.8% in 2003.
</DIV>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Compensation and Benefits</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Consolidated compensation and benefits expenses increased
$3.8&nbsp;million, or 14.6%, to $30.1&nbsp;million in 2004 from
$26.2&nbsp;million in 2003. This increase was primarily due to
the increase in our employee headcount and an increase in our
discretionary bonus payments. Our discretionary bonus payments
increased primarily due to improved operating results in 2004 as
compared to 2003 and an increased number of employees receiving
a bonus in 2004. As of December&nbsp;31, 2004, we had
200&nbsp;employees, compared to 186 employees as of
December&nbsp;31, 2003. Consolidated compensation and benefits
expenses, as a percentage of consolidated revenues, decreased to
27.7% in 2004 from 28.0% in 2003.
</DIV>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Professional Services</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Consolidated professional services expenses decreased $615,000,
or 4.1%, to $14.5&nbsp;million in 2004 from $15.1&nbsp;million
in 2003. This decrease was primarily due to the renegotiation of
a major vendor consulting contract in 2004 that substantially
reduced fees incurred in our futures business segment, as well
as to the replacement of contractors with permanent staff over
the course of 2004. These reduced professional services expenses
were partially offset by an increase in legal fees primarily
related to ongoing litigation with NYMEX and EBS. Consolidated
professional services expenses, as a percentage of consolidated
revenues, decreased to 13.4% in 2004 from 16.1% in 2003.
</DIV>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Selling, General and Administrative</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Consolidated selling, general and administrative expenses
increased $722,000, or 5.8%, to $13.1&nbsp;million in 2004 from
$12.4&nbsp;million in 2003. This increase was due to the
market-maker program that we initiated during 2004. Consolidated
selling, general and administrative expenses, as a percentage of
consolidated revenues, decreased to 12.1% in 2004 from 13.2% in
2003.
</DIV>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Depreciation and Amortization</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Consolidated depreciation and amortization expenses decreased
$2.3&nbsp;million, or 12.0%, to $17.0&nbsp;million in 2004 from
$19.3&nbsp;million in 2003. This decrease was due to certain
property and equipment purchased in 2000 and 2001 with estimated
useful lives of three years becoming fully depreciated over the
course of 2003 and
</DIV>

<P align="center" style="font-size: 10pt;">58

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<DIV align="left" style="font-size: 10pt;">
2004, as well as to our decision to extend the useful lives of
certain of our property and equipment during 2004. In the first
quarter of 2004, we extended the remaining estimated useful
lives of various computer hardware property and equipment to
December 2005. The majority of these assets had estimated useful
lives that ended in March 2005. The decision to increase the
estimated useful lives of these assets was based on internal
analysis that indicated that the useful lives of these assets
would extend beyond the original estimate of three years. The
original three year life was based on information available in
2002. However, given our limited operating history, the
information available in 2002 did not include prior experience
of the useful lives of this property and equipment to include in
our initial estimate. The change in estimated useful lives had
the impact of delaying the recognition of $676,000 of
depreciation expense from 2004 to 2005. We will continue to
review the remaining estimated useful lives of our property and
equipment and will make adjustments whenever events or changes
in circumstances indicate that the remaining useful life of an
asset has changed. Consolidated depreciation and amortization
expenses, as a percentage of consolidated revenues, decreased to
15.7% in 2004 from 20.6% in 2003.
</DIV>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Other Income (Expense)</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Consolidated other income increased $380,000, or 40.0%, to
$1.3&nbsp;million in 2004 from $949,000 in 2003. This increase
primarily related to an increase of $1.2&nbsp;million in
interest income, partially offset by an increase of $754,000 in
foreign currency transaction losses. The increase in interest
income was primarily due to the increase in the cash balances in
2004 compared to 2003, as well as to our cash earning a higher
return in 2004 compared to 2003. The average monthly ending cash
balance in 2004, including cash and cash equivalents, short-term
investments, restricted cash and restricted short-term
investments, was $100.7&nbsp;million, compared to
$78.4&nbsp;million in 2003. Our average interest rate in 2004
was 2.9%, compared to 2.2% in 2003.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The foreign currency transaction losses primarily related to the
revaluation of the U.S.&nbsp;dollar cash balances held by our
foreign subsidiaries due to the increase in the period-end
foreign currency exchange rates during 2004. The functional
currency of our foreign subsidiaries is pounds sterling. Foreign
currency transaction losses increased to $1.4&nbsp;million in
2004 from $644,000 in 2003. The year-end foreign currency
exchange rate of pounds sterling to the U.S.&nbsp;dollar
increased 7.4% to 1.9160 as of December&nbsp;31, 2004 from
1.7846 as of December&nbsp;31, 2003. As of December&nbsp;31,
2004, our foreign subsidiaries held $20.6&nbsp;million in
U.S.&nbsp;dollar denominated cash balances, compared to
$4.7&nbsp;million as of December&nbsp;31, 2003.
</DIV>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Income Taxes</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Consolidated tax expense increased $5.3&nbsp;million, or 81.4%,
to $11.8&nbsp;million in 2004 from $6.5&nbsp;million in 2003
primarily due to the increase in our pre-tax income. Our
effective tax rate increased to 34.9% in 2004 from 32.7% in
2003. The 2004 and 2003 effective tax rates are lower than the
statutory rate primarily due to the impact of tax credits, which
were partially offset by state income taxes. The increase in the
effective tax rate from 2003 to 2004 was primarily due to lower
tax credits taken in 2004 and higher state income taxes in 2004.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Year Ended December&nbsp;31, 2003 Compared to Year Ended
December&nbsp;31, 2002</B>
</DIV>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Overview</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Consolidated net income decreased $21.3&nbsp;million, or 61.5%,
to $13.4&nbsp;million in 2003 from $34.7&nbsp;million in 2002.
During this period, net income for our futures business segment
increased $2.2&nbsp;million, or 20.0%, to $13.5&nbsp;million in
2003 from $11.3&nbsp;million in 2002, and we incurred a net loss
for our OTC business segment of $126,000 in 2003 versus net
income of $23.5&nbsp;million in 2002. Consolidated operating
income, as a percentage of revenues, decreased to 20.2% in 2003
from 40.6% in 2002. Consolidated net income, as a percentage of
consolidated revenues, decreased to 14.3% in 2003 from 27.7% in
2002.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our consolidated revenues decreased $31.7&nbsp;million, or
25.3%, to $93.7&nbsp;million in 2003 from $125.5&nbsp;million in
2002. This decrease was primarily the result of decreased
trading volumes on our electronic platform as trading volumes in
the North American OTC energy market significantly declined due
to the business
</DIV>

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<DIV align="left" style="font-size: 10pt;">
environment. Consolidated operating expenses remained relatively
flat at $74.8&nbsp;million in 2003, compared to
$74.5&nbsp;million in 2002.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Revenues</I></B></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Transaction Fees</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Consolidated transaction fees decreased $37.4&nbsp;million, or
31.4%, to $81.4&nbsp;million in 2003 from $118.8&nbsp;million in
2002. Consolidated transaction fees, as a percentage of
consolidated revenues, decreased to 86.9% in 2003 from 94.7% in
2002.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Transaction fees generated by our futures business segment
increased $8.4&nbsp;million, or 26.7%, to $40.0&nbsp;million in
2003 from $31.5&nbsp;million in 2002. Transaction fees generated
by this segment, as a percentage of consolidated revenues,
increased to 42.6% in 2003 from 25.1% in 2002. This increase was
due to a 9.5% increase in the trading volumes in our futures
business segment, a 14.8% increase in our commission rates
instituted in May 2002, as well as an 8.4% increase in the
foreign currency exchange rate. Trading volumes in this segment
increased to 33.3&nbsp;million contracts traded in 2003 from
30.4&nbsp;million contracts traded in 2002. The average exchange
rate of pounds sterling to the U.S.&nbsp;dollar increased to
1.6341 in 2003 from 1.5071 in 2002. In May 2002, we implemented
a fee increase across all futures markets from 30.5 pence per
contract per side to 35 pence per contract per side. In June
2002, we implemented a fee increase in respect of Exchange for
Physical, or EFP, and Exchange for Swap, or EFS, transactions
from 35&nbsp;pence per contract per side to 60 pence per
contract per side. EFP and EFS are trades that occur off
exchange and are blocked into our futures business segment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Transaction fees generated by our OTC business segment decreased
$45.8&nbsp;million, or 52.5%, to $41.5&nbsp;million in 2003 from
$87.3&nbsp;million in 2002, primarily due to decreased trading
volumes on our electronic platform, partially offset by an
increase in our order flow shortfall payments. Transaction fees
generated by our OTC business segment, as a percentage of
consolidated revenues, decreased to 44.2% in 2003 from 69.5% in
2002. Transaction fees derived from trading in North American
natural gas contracts decreased $25.0&nbsp;million, or 59.8%, to
$16.8&nbsp;million in 2003 from $41.8&nbsp;million in 2002,
North American power contracts decreased $16.5&nbsp;million, or
74.2%, to $5.7&nbsp;million in 2003 from $22.3&nbsp;million in
2002 and global oil contracts decreased $5.4&nbsp;million, or
37.7%, to $8.8&nbsp;million in 2003 from $14.2&nbsp;million in
2002. The number of transactions executed in our OTC business
segment decreased 29.6% to 684,495 trades in 2003 from 971,760
trades in 2002. In addition, average revenues per OTC
transaction decreased 32.5% from 2002 to 2003. The reduced
number of transactions, trading volume, revenue per trade and
associated revenues were due to several factors, including:
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Highly publicized problems involving merchant energy companies,
    including alleged manipulative trading and price reporting
    practices, misstatements of financial results, and other
    matters, which resulted in many trading companies reducing or
    eliminating their energy trading.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Severely restricted credit lines for trading desks, limiting
    trading to asset-based transactions.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    A general loss of liquidity in the broader energy market
    resulting from fewer participants and reduced trading activity.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Revenues derived from order flow shortfall payments in our OTC
business segment increased to $7.1&nbsp;million in 2003 from
$3.3&nbsp;million in 2002. This $3.8&nbsp;million increase was
due to a $6.4&nbsp;million shortfall payment from the Gas and
Power Firms recognized in 2003, partially offset by a
$2.2&nbsp;million shortfall payment recognized from the Initial
Shareholders in 2002 and a decrease of $373,000 in the 2003
European gas shortfall payment as compared to the 2002 European
gas shortfall payment. Consolidated order flow shortfall
payments, as a percentage of consolidated revenues, increased to
7.6% in 2003 from 2.6% in 2002.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Revenues derived from our electronic confirmation fees increased
323.6% from 2002 to 2003. We began offering this service in
April 2002. During 2003, 64,383 trades were matched, an increase
of 109.7% compared to 30,696 trades matched in 2002.
</DIV>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Data Services Fees</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Consolidated data services fees increased $2.6&nbsp;million, or
50.6%, to $7.7&nbsp;million in 2003 from $5.1&nbsp;million in
2002. This increase was due to increased data services fees
derived from both our futures business segment and our OTC
business segment of $1.2&nbsp;million and $1.4&nbsp;million,
respectively. Data services fees derived from our futures
business segment increased due to changes in the foreign
currency exchange rate. 10x view only screen access and End of
Day reports were both launched in November 2002. The number of
individual subscribers to 10x view only screen access increased
to 193 as of December&nbsp;31, 2003 from 75 as of
December&nbsp;31, 2002. Consolidated data services fees, as a
percentage of consolidated revenues, increased to 8.3% in 2003
from 4.1% in 2002.
</DIV>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Trading Access Fees</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Consolidated trading access fees increased to $2.5&nbsp;million
in 2003 from $490,000 in 2002. This increase was primarily due
to increased monthly minimum commission fees in our OTC business
segment, which we introduced in November 2002. We initiated
minimum commission fees during the last two months of 2002.
During 2003 and 2002, we received $762,000 and $395,000,
respectively, in membership subscriptions and system user fees
in our futures business segment and $1.7&nbsp;million and
$95,000, respectively, in monthly minimum commission fees in our
OTC business segment. These system user fees were introduced as
part of the addition of trading in futures contracts to our
electronic platform in 2003. Consolidated trading access fees,
as a percentage of consolidated revenues, increased to 2.6% in
2003 from 0.4% in 2002.
</DIV>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Other Revenue</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Consolidated other revenues increased $1.0&nbsp;million, or
98.1%, to $2.1&nbsp;million in 2003 from $1.1&nbsp;million in
2002. This increase was due to increased licensing, service and
technology development fees charged to CCX and to increased
training and communication charges in our futures business
segment. Consolidated other revenues, as a percentage of
consolidated revenues, increased to 2.2% in 2003 from 0.8% in
2002.
</DIV>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Expenses</I></B></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Cost of Hosting</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Consolidated cost of hosting expenses decreased
$2.2&nbsp;million, or 56.7%, to $1.7&nbsp;million in 2003 from
$4.0&nbsp;million in 2002, primarily due to reduced costs
associated with the migration to an Internet-based platform from
a private network connection in early 2003. During 2003, we paid
$1.3&nbsp;million in hosting expenses, $268,000 in customer
network expenses and $111,000 in security services expenses,
compared to $2.4&nbsp;million in hosting expenses, $516,000 in
customer network expenses and $1.1&nbsp;million in security
services expenses in 2002. Consolidated cost of hosting
expenses, as a percentage of consolidated revenues, decreased to
1.8% in 2003 from 3.2% in 2002.
</DIV>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Compensation and Benefits</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Consolidated compensation and benefits expenses decreased
$1.7&nbsp;million, or 6.0%, to $26.2&nbsp;million in 2003 from
$27.9&nbsp;million in 2002. This decrease was primarily due to a
reduction in our employee headcount and a reduction in our
discretionary bonus payments. As of December&nbsp;31, 2003, we
had 186 employees, compared to 201 employees at
December&nbsp;31, 2002. Our discretionary bonus payments
decreased primarily due to lower bonuses paid in 2003 compared
to 2002, reflecting our reduced operating results in 2003, and
fewer employees receiving a bonus in 2003 as compared to 2002.
Consolidated compensation and benefits expenses, as a percentage
of consolidated revenues, increased to 28.0% in 2003 from 22.2%
in 2002.
</DIV>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Professional Services</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Consolidated professional services expenses decreased $737,000,
or 4.6%, to $15.1&nbsp;million in 2003 from $15.9&nbsp;million
in 2002. This decrease was primarily due to a $2.4&nbsp;million
charge in 2002 relating to legal and accounting expenses
incurred with respect to our initial public offering that was
suspended in 2002, which was
</DIV>

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partially offset by an increase in legal fees in 2003 primarily
related to our litigation with NYMEX. Consolidated professional
services expenses, as a percentage of consolidated revenues,
increased to 16.1% in 2003 from 12.7% in 2002.
</DIV>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Selling, General and Administrative</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Consolidated selling, general and administrative expenses
remained constant at $12.4&nbsp;million in 2002 and 2003.
Consolidated selling, general and administrative expenses, as a
percentage of consolidated revenues, increased to 13.2% in 2003
from 9.9% in 2002.
</DIV>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Depreciation and Amortization</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Consolidated depreciation and amortization expenses increased
$5.0&nbsp;million, or 34.6%, to $19.3&nbsp;million in 2003 from
$14.4&nbsp;million in 2002. This increase was due to additional
depreciation expense recorded on capital expenditures of
$1.6&nbsp;million incurred in 2003 and capitalized software
development costs of $5.2&nbsp;million incurred in 2003. We also
had a full year of depreciation expense recorded on the
$14.8&nbsp;million in capital expenditures and $6.0&nbsp;million
in capitalized software development costs incurred in 2002.
Consolidated depreciation and amortization expenses, as a
percentage of consolidated revenues, increased to 20.6% in 2003
from 11.4% in 2002.
</DIV>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Other Income (Expense)</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Consolidated other income decreased $544,000, or 36.4%, to
$949,000 in 2003 from $1.5&nbsp;million in 2002. The difference
primarily related to a decrease of $263,000 in interest income
and an increase of $602,000 in foreign currency transaction
losses, partially offset by a decrease of $320,000 in interest
expense. The decrease in interest income and interest expense
were both related to the repayment of our related-party term
loan note agreements in November 2002 for $16.5&nbsp;million in
cash.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The foreign currency transaction losses related to the
re-valuation of the U.S.&nbsp;dollar cash balances held by our
foreign subsidiaries due to the increase in the period-end
foreign currency exchange rates during 2003. The functional
currency of our foreign subsidiaries is pounds sterling. The
foreign currency transaction losses increased to $644,000 in
2003 from $149,000 in 2002. The year-end foreign currency
exchange rate of pounds sterling to the U.S.&nbsp;dollar
increased 10.9%, to 1.7846 at December&nbsp;31, 2003 from 1.6095
at December&nbsp;31, 2002. As of December&nbsp;31, 2003, our
foreign subsidiaries held $4.7&nbsp;million in U.S.&nbsp;dollar
denominated cash balances, compared to $1.6&nbsp;million as of
December&nbsp;31, 2002.
</DIV>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Income Taxes</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Consolidated tax expense decreased $11.2&nbsp;million, or 63.4%,
to $6.5&nbsp;million in 2003 from $17.7&nbsp;million in 2002
primarily due to the decrease in our pre-tax income. Our
effective tax rate decreased to 32.7% in 2003 from 33.8% in
2002. The 2002 and 2003 effective tax rates are lower than the
statutory rate primarily due to the impact of tax credits, which
were partially offset by state income taxes.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Quarterly Results of Operations</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table sets forth quarterly unaudited condensed
consolidated statements of income for the periods presented. We
believe that this data has been prepared on substantially the
same basis as our audited consolidated financial statements and
includes all adjustments, consisting only of normal recurring
adjustments, necessary for the fair presentation of our
consolidated results of operations for the quarters presented.
This unaudited condensed consolidated quarterly data should be
read together with our consolidated financial statements and
related notes included elsewhere in this prospectus. The
historical results for any quarter do not necessarily indicate
the results expected for any future period.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="26%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap><B>Three Months Ended,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>December&nbsp;31,</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>September&nbsp;30,</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>June&nbsp;30,</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>March&nbsp;31,</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap><B>(in thousands)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Revenues:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Transaction fees, net:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Futures:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Brent Crude futures</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>8,685</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>8,824</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>8,563</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>8,365</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>7,239</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other futures products and options</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,361</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,302</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,160</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,036</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Two month fee rebate program</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,261</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    OTC:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    North American natural gas</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,913</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,620</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,622</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,891</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,639</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    North American power</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,835</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,801</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,242</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,584</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,260</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Global oil</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>758</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>915</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>954</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,372</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,627</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other commodities markets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>247</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>245</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>291</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>260</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>435</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Electronic trade confirmation services</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>264</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>239</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>166</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>120</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>77</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Order flow agreements shortfall payments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>272</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>265</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>263</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>268</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>238</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Data services fees</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,678</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,501</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,382</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,130</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,105</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Trading access fess</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>969</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>842</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>859</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>925</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>755</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,775</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>893</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>756</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>798</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>969</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>28,496</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29,447</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26,258</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24,213</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22,380</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Operating expenses:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cost of hosting</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>219</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>362</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>341</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>357</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>398</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Compensation and benefits</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,401</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,455</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,674</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,544</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,509</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Professional services</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,379</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,583</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,316</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,245</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,600</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Selling, general and administrative</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,667</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,252</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,092</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,109</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,821</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Depreciation and amortization</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,776</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,078</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,090</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,080</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,625</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total operating expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20,442</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,730</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,513</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,335</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,953</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Operating income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,054</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,717</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,745</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,878</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,427</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other income (expense), net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(589</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>895</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>679</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>343</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>122</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Income tax expense</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,626</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,561</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,987</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,599</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,024</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>4,839</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>7,051</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>5,437</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>4,622</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>3,525</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;">63

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Liquidity and Capital Resources</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Since our inception on May&nbsp;11, 2000, we have financed our
operations, growth and cash needs primarily through income from
operations, borrowings under our related-party loan agreement
and borrowings under our revolving credit facility. Our
principal capital requirements have been to fund:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    capital expenditures;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    working capital;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    strategic acquisitions;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    marketing and development of our electronic platform.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We may need to incur additional debt or issue additional equity
to make strategic acquisitions or investments in the future.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Cash and Cash Equivalents, Short-term Investments,
    Restricted Cash and Restricted Short-Term Investments</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We had consolidated cash and cash equivalents of
$61.2&nbsp;million and $44.9&nbsp;million as of
December&nbsp;31, 2004 and 2003, respectively. We had
$5.7&nbsp;million and $12.0&nbsp;million in short-term
investments as of December&nbsp;31, 2004 and 2003, respectively,
and $18.4&nbsp;million and $36.8&nbsp;million in restricted cash
and restricted short-term investments held as of
December&nbsp;31, 2004 and 2003, respectively. We consider all
short-term, highly liquid investments with original maturity
dates of three months or less at the time of purchase to be cash
equivalents. We classify all investments with original maturity
dates in excess of three months as short-term investments. We
classify all cash that is not available for general use, either
due to FSA requirements or through restrictions in specific
agreements, as restricted cash or restricted short-term
investments.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We invest a portion of our cash in excess of short-term
operating needs in U.S.&nbsp;AAA rated 28-day Auction Rate
Securities, or ARS. We classify these investments as
available-for-sale in accordance with Statement of Financial
Accounting Standards, or SFAS,&nbsp;115, <I>Accounting for
Certain Investments in Debt and Equity Securities</I>. ARS are
instruments whose interest rates or dividends are reset
frequently, usually every seven to 49&nbsp;days. The reset
mechanism occurs via a Dutch auction, wherein purchasers and
sellers submit their orders for ARS to registered
broker-dealers. The highest bid that clears the auction is the
interest rate or dividend applied to the entire issue until the
next auction date. While there is no guarantee that a sell order
will be filled, it is rare for it not to be filled due to the
high credit quality of the ARS. Even though we
purchase&nbsp;28-day auction rate issues, we are required to
classify these securities as short-term investments instead of
cash and cash equivalents as the original maturity of the ARS is
in excess of three months. The ARS investments are classified as
current assets based on our intent and ability to use these
investments as necessary for short-term requirements. We had ARS
investments of $5.7&nbsp;million and $12.0&nbsp;million as of
December&nbsp;31, 2004 and 2003, respectively, and our ARS
investments are presented as short-term investments on our
consolidated balance sheets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We had $12.4&nbsp;million and $11.9&nbsp;million in restricted
cash held at the IPE as of December&nbsp;31, 2004 and 2003,
respectively. The FSA requires the IPE, as an RIE, to restrict
the use of the equivalent of six months&#146; operating
expenditures in cash or cash equivalents at all times. Our
subsidiary, IntercontinentalExchange Services (UK) Limited, or
ICE Services UK, is authorized and regulated by the FSA as an
arranger of deals in investments and as an agency broker. The
FSA requires ICE Services UK to maintain a minimum level of
financial resources, which is calculated annually on the basis
of 25% of the relevant annual expenditures, adjusted for any
illiquid assets. As of December&nbsp;31, 2004 and 2003, we had
$1.0&nbsp;million and $874,000, respectively, in restricted cash
held at ICE Services UK.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
When we acquired the IPE in June 2001, $24.0&nbsp;million of
cash collateral was pledged by certain shareholders to secure a
letter of credit issued to support our redemption obligations in
respect of our Class&nbsp;B redeemable common stock, which we
issued as a portion of our payment to the sellers. This cash was
held in a facility that was controlled by the Gas and Power
Firms and originally was not reflected in our consolidated
</DIV>

<P align="center" style="font-size: 10pt;">64

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left" style="font-size: 10pt;">
financial statements. In January 2003, the FASB issued
Interpretation No.&nbsp;46, or FIN&nbsp;46, <I>Consolidation of
Variable Interest Entities.</I> FIN&nbsp;46 requires a variable
interest entity to be consolidated by a company if that company
is subject to a majority of the risk of loss from the variable
interest entity&#146;s activities or entitled to receive a
majority of the entity&#146;s residual returns or both. We
adopted FIN&nbsp;46 in November 2003. Given our ability to
receive all of the variable interest entity&#146;s expected
residual losses and returns, we were considered the primary
beneficiary under FIN&nbsp;46 and we were required to
consolidate the entity. The result of the adoption of
FIN&nbsp;46 and the consolidation of the variable interest
entity was to increase restricted short-term investments by
$24.0&nbsp;million and to increase additional paid-in capital by
$24.0&nbsp;million in 2003. The letter of credit was paid and
the $24.0&nbsp;million was released to the letter of credit bank
for the benefit of the holders of our Class&nbsp;B redeemable
common stock. We have no further obligation or interest in
respect of this arrangement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In November 2004, we entered into a $25.0&nbsp;million revolving
credit agreement with Wachovia Bank, National Association, or
Wachovia. We are required to maintain a $5.0&nbsp;million money
market account with Wachovia until we have transferred our
primary domestic and international deposit accounts to Wachovia,
which will likely occur during 2005. As of December&nbsp;31,
2004, this $5.0&nbsp;million balance is reflected as restricted
cash.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We maintain cash and short-term investments in an amount
sufficient to meet our working capital requirements. In our OTC
business segment, in addition to the ARS described above, we
currently invest our excess cash predominantly in commercial
paper and overnight deposits that are highly liquid, are of
high-quality investment grade and have maturities of three
months or less with the intent of having these funds readily
available for operating, acquisition and strategic equity
investment purposes. In our futures business segment, we earn
interest income on our excess cash balances which primarily
relates to interest earned on money market deposits in the
United Kingdom. Our futures business policy is to invest
two-thirds of all cash funds at no more than six banks with an
IBCA credit rating of AAA or AA+, with no more than 50% in any
one bank. Under this policy, the remaining one-third of all cash
funds may be invested in no more than three additional banks
with an IBCA rating of AA or above.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Cash Flow</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following tables present, for the periods indicated, the
major components of net increases (decreases)&nbsp;in cash and
cash equivalents:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="65%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Year Ended December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2002</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>(in thousands)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net cash provided by (used in):</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Operating activities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>40,161</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>27,093</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>51,172</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Investing activities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,777</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(18,131</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(25,209</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Financing activities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(20,324</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,324</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(20,051</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Effect of exchange rate changes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,226</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,648</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,105</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net increase in cash and cash equivalents</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>16,286</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>11,286</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>8,017</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Operating Activities</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Consolidated net cash provided by operating activities was
$40.2&nbsp;million, $27.1&nbsp;million and $51.2&nbsp;million in
2004, 2003 and 2002, respectively. Net cash provided by
operating activities primarily consists of net income adjusted
for certain non-cash items, including depreciation and
amortization and the effects of changes in working capital.
Fluctuations in net cash provided by operating activities are
primarily attributable to increases and decreases in our net
income between periods and, to a lesser extent, due to
fluctuations in working capital. The $13.1&nbsp;million increase
in net cash provided by operating activities in 2004 from 2003
is primarily due to the $6.5&nbsp;million increase in the OTC
business segment&#146;s net income in 2004 from 2003, the
increase in the futures business segment&#146;s net income and
the net increases in accrued salaries and benefits
</DIV>

<P align="center" style="font-size: 10pt;">65

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left" style="font-size: 10pt;">
and other accrued liabilities. The $24.1&nbsp;million decrease
in net cash provided by operating activities in 2003 from 2002
is primarily due to the $23.6&nbsp;million decrease in the OTC
business segment&#146;s net income in 2003 from 2002.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Investing Activities</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Consolidated net cash used in investing activities was
$4.8&nbsp;million, $18.1&nbsp;million and $25.2&nbsp;million in
2004, 2003 and 2002, respectively. These activities primarily
relate to capital expenditures in each period for software,
including internally developed software, and for computer and
network equipment. We incurred capitalized software development
costs of $4.8&nbsp;million, $5.2&nbsp;million and
$6.0&nbsp;million in 2004, 2003 and 2002, respectively. We had
additional capital expenditures of $1.7&nbsp;million,
$1.6&nbsp;million and $14.8&nbsp;million in 2004, 2003 and 2002,
respectively. The $14.8&nbsp;million in capitalized expenditures
in 2002 included $10.4&nbsp;million in computer network
equipment relating to the development of our electronic platform
and disaster recovery platform. We also had a net decrease
(increase) in short-term investments classified as available
for-sale of $6.5&nbsp;million, ($7.9&nbsp;million) and
($3.8&nbsp;million) in 2004, 2003 and 2002, respectively, and a
net decrease (increase) in restricted cash of
($4.7&nbsp;million), ($2.8&nbsp;million) and $142,000,
respectively, due to changes in the short-term investments and
restricted cash balances between periods.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Financing Activities</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Consolidated net cash used in financing activities was
$20.3&nbsp;million, $1.3&nbsp;million and $20.1&nbsp;million in
2004, 2003 and 2002, respectively. Consolidated net cash used in
financing activities for 2004 primarily relates to
$43.5&nbsp;million paid in connection with the redemption of the
Class&nbsp;B redeemable common stock, partially offset by
$25.0&nbsp;million in cash drawn down under our revolving credit
facility. Consolidated net cash used in financing activities for
2002 primarily relates to $16.5&nbsp;million in repayments of
related-party notes payable. We also had payments on capital
lease obligations, primarily related to computer and network
equipment, of $1.6&nbsp;million, $1.9&nbsp;million and
$3.6&nbsp;million in 2004, 2003 and 2002, respectively.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We intend to use a portion of the net proceeds of this offering
to repay all amounts outstanding under our revolving credit
facility. During January 2005, $12.0&nbsp;million of the
$25.0&nbsp;million outstanding under that facility was repaid
using excess cash.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Loan Agreements</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We entered into our revolving credit agreement with Wachovia on
November&nbsp;17, 2004. Under this agreement, we may borrow an
aggregate principal amount of up to $25.0&nbsp;million at any
time through November&nbsp;17, 2006. The facility includes an
unused line fee that is equal to the unused maximum revolver
amount multiplied by an applicable margin rate and is payable on
a quarterly basis, which as of December&nbsp;31, 2004 was 0.15%.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Loans under the Wachovia facility bear interest on the principal
amounts outstanding at LIBOR plus an applicable margin rate,
which as of December&nbsp;31, 2004 was 0.85%. We have the option
to select the interest rate and interest period applicable to
any loans at the time of borrowing, which can be either a daily
LIBOR market index loan or a LIBOR rate loan with a period of
one, three or six months. Interest on each LIBOR market index
loans is payable monthly and the interest on the LIBOR rate
loans is payable on the last day of each interest period
generally.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On November&nbsp;23, 2004, we borrowed the entire
$25.0&nbsp;million available under the Wachovia facility to fund
a portion of the $67.5&nbsp;million redemption of our
Class&nbsp;B redeemable common stock. As of December&nbsp;31,
2004, $13.0&nbsp;million was held in a six-month LIBOR rate loan
with a locked in interest rate, including the applicable margin
rate, of 3.40%. The remaining balance of $12.0&nbsp;million was
held in a daily LIBOR market index loan with an interest rate at
December&nbsp;31, 2004, including the applicable margin rate, of
3.25%. The $12.0&nbsp;million LIBOR market index loan was repaid
in January 2005.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
This facility provides for a negative pledge on all of our
assets. We pledged 65% of the stock of our foreign subsidiary
holding company in connection with this facility. The facility
also contains affirmative and negative
</DIV>

<P align="center" style="font-size: 10pt;">66

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left" style="font-size: 10pt;">
covenants including, but not limited to, cash flow leverage
ratios, minimum tangible net worth ratios and limitations or
approvals needed from Wachovia for acquisitions, external debt
and other fundamental changes to our business.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On May&nbsp;11, 2000, we entered into a term loan agreement with
Goldman Sachs Credit Partners L.P., an affiliate of The Goldman
Sachs Group, Inc., and Morgan Stanley Capital Group, Inc., two
of our Initial Shareholders that are affiliated with the lead
underwriters of this offering. Under the agreement, we could
borrow an aggregate principal amount of up to $20&nbsp;million
($10&nbsp;million from each lender) in two term loans. We
borrowed $16.1&nbsp;million under the term loan agreement in
2000 and repaid the principal balance and accrued interest of
$16.5&nbsp;million in 2002. In November 2002, the term loan
agreement was cancelled and all liens were released. The loans
bore interest on the principal amounts at one-month LIBOR, with
interest compounding monthly and payable at the maturity date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Future Capital Requirements</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our future capital requirements will depend on many factors,
including the rate of our trading volume growth, required
technology initiatives, regulatory compliance costs, the
expansion of sales and marketing activities, the timing and
introduction of new products and enhancements to existing
products, and the continuing market acceptance of our electronic
platform. We currently expect to make capital expenditures
ranging between $3.9&nbsp;million and $5.8&nbsp;million in 2005
and ranging between $4.1&nbsp;million and $5.4&nbsp;million in
2006 to support the continued expansion of our futures and OTC
businesses. We expect that these expenditures will focus on the
further expansion of our electronic futures and OTC participant
base, the expansion of distribution opportunities via the
possible acquisition of existing businesses, the addition of
products in our market data services business, and the provision
of back office service systems as well as technical improvements
to, and enhancements of, our existing systems, products and
services. We expect our capitalized software development costs
to remain relatively consistent with our 2004 software
development costs.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We believe that cash flows from operations and the net proceeds
of this offering will be sufficient to fund our working capital
needs and capital expenditure requirements at least through the
end of 2006. Our revolving credit agreement is currently the
only agreement or arrangement that we have with third parties to
provide us with sources of liquidity and capital resources
following this offering. In the event that we consummate any
strategic acquisitions or investments, or if we are required to
raise capital for any reason, we may need to incur additional
debt or issue additional equity to help raise the necessary
funds. We cannot assure you that we will be able to obtain any
such financing on acceptable terms or at all.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Off-Balance Sheet Entities</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We currently do not have any relationships with unconsolidated
entities or financial partnerships, often referred to as
structured finance or special purpose entities, which have been
established for the purpose of facilitating off-balance sheet
arrangements or other contractually narrow or limited purposes.
</DIV>

<P align="center" style="font-size: 10pt;">67

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Contractual Obligations and Commercial Commitments</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following tables present, for the periods indicated, our
contractual obligations (which we intend to fund from
operations) and commercial commitments as of December&nbsp;31,
2004:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="54%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="19" align="center" nowrap><B>Payments Due by Period</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="19" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Less</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="11">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Than</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>1-3</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>4-5</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>After 5</B></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>1&nbsp;Year</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Years</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Years</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Years</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="19" align="center" nowrap><B>(in thousands)</B></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Contractual Obligations:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Short-term debt(1)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>12,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>12,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Capital lease obligations</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>511</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>511</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Operating leases</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,984</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,867</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,117</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Long-term debt(2)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    eSpeed licensing agreement(3)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total contractual cash obligations</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>34,495</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>16,378</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>18,117</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    Short-term debt was repaid in full in January 2005.</TD>
</TR>

<TR valign="top">
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    We expect to repay long-term debt in full out of the net
    proceeds of this offering.</TD>
</TR>

<TR valign="top">
    <TD>(3)&nbsp;</TD>
    <TD align="left">
    The eSpeed licensing agreement also includes a quarterly royalty
    payment that is based on trading volume. The royalty payments
    were $32,000 and $14,000 in 2004 and 2003, respectively, and the
    2005 through 2007 estimates have not been included in the above
    estimates.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Quantitative and Qualitative Disclosures about Market Risk</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We are exposed to market risk in the ordinary course of
business. This market risk consists primarily of interest rate
risk associated with our cash and cash equivalents, short-term
investments, restricted cash and restricted short-term
investments and foreign currency exchange rate risk.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Interest Rate Risk</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have exposure to market risk for changes in interest rates
relating to our cash and cash equivalents, short-term
investments, restricted cash and restricted short-term
investments. As of December&nbsp;31, 2004 and 2003, our cash and
cash equivalents, short-term investments, restricted cash and
restricted short-term investments, were $85.3&nbsp;million and
$93.7&nbsp;million, respectively, of which $46.0&nbsp;million
and $46.5&nbsp;million, respectively, were denominated in pounds
sterling. The remaining investments are denominated in
U.S.&nbsp;dollars. In general, our investments in the United
Kingdom earn interest at a higher rate than in the United
States. Due to the conservative nature of our investment
portfolio, which is structured with a focus on capital
preservation and is mainly comprised of short-term AAA rated
ARS, commercial paper and money market investments, we would not
expect our operating results or cash flows to be significantly
affected by changes in market interest rates. We do not use our
investment portfolio for trading or other speculative purposes.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Foreign Currency Exchange Rate Risk</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have had significant operations in the United Kingdom since
our acquisition of the IPE in 2001. The revenues, expenses and
financial results of the IPE and other U.K. subsidiaries are
denominated in pounds sterling. Pounds sterling is the
functional currency of our U.K. subsidiaries. We have foreign
currency translation risk equal to our net investment in our
subsidiaries. The financial statements of our U.K. subsidiaries
are translated into U.S.&nbsp;dollars using current rates of
exchange, with gains or losses included in the cumulative
translation adjustment account, a component of
shareholders&#146; equity. As of December&nbsp;31, 2004 and
2003, the portion of our shareholders&#146; equity attributable
to accumulated other comprehensive income from foreign currency
translation was $37.0&nbsp;million and $26.4&nbsp;million,
respectively. The year-end foreign
</DIV>

<P align="center" style="font-size: 10pt;">68

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<DIV align="left" style="font-size: 10pt;">
currency exchange rate for pounds sterling to the
U.S.&nbsp;dollar increased from 1.6095 as of December&nbsp;31,
2002 to 1.7846 as of December&nbsp;31, 2003, and then to 1.9160
as of December&nbsp;31, 2004.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We also have foreign currency transaction risk related to the
settlement of foreign receivables or payables that occur through
our electronic platform, including for our OTC European gas and
power markets, which are paid in pounds sterling, and for our
foreign subsidiaries cash accounts held in U.S.&nbsp;dollars. We
had foreign currency transaction losses of $1.4&nbsp;million,
$644,000 and $149,000 in 2004, 2003 and 2002, respectively,
primarily attributable to the appreciation of pounds sterling
relative to the U.S.&nbsp;dollar. The average exchange rate of
pounds sterling to the U.S.&nbsp;dollar increased from 1.5071 in
2002 to 1.6341 in 2003, and then to 1.8296 in 2004.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We generate a significant portion of our revenues from sales to
participants located outside of the United States, principally
in the United Kingdom. Of our consolidated revenues, 46.1%,
47.1% and 33.7% were denominated in pounds sterling in 2004,
2003 and 2002, respectively. Of our consolidated operating
expenses, 44.4%, 40.0% and 29.2% were denominated in pounds
sterling in 2004, 2003 and 2002, respectively. As the pounds
sterling exchange rate changes, the U.S.&nbsp;equivalent of
revenues and expenses denominated in foreign currencies changes
accordingly.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
All other sales in our business are denominated in
U.S.&nbsp;dollars, including all sales of our futures market
data generated by the IPE. Our U.K. operations in some instances
function as a natural hedge because most U.K. revenues and
operating expenses are denominated in pounds sterling. We
acquired the IPE in June 2001 and we formed four wholly-owned
U.K. subsidiary companies during 2003. We also began to offer
trading in the OTC European gas commodities market in December
2001 and in the OTC European power commodities market in May
2002. As a result, to date, our exposure to foreign currency
exchange risk has increased. This exposure will continue to
increase as we expand and introduce additional international
products on our electronic platform. The effect of an immediate
10% decline in exchange rates would result in a translation
adjustment loss of $15.1&nbsp;million as of December&nbsp;31,
2004.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We currently enter into hedging transactions to help mitigate
our foreign exchange risk exposure. During 2004 and 2003, we
entered into foreign currency hedging activities primarily to
protect our net investment in our foreign subsidiaries. In
accordance with SFAS&nbsp;No.&nbsp;133, <I>Accounting for
Derivative Instruments and Hedging Activities</I>, we are
required to recognize all derivative financial instruments as
either assets or liabilities on our consolidated balance sheets
at fair value. The effective portion of any gain or loss on
these derivative financial instruments, which have been
designated as a hedge of a net investment in foreign operations,
are reflected in accumulated other comprehensive income. Any
ineffective portion of any gain or loss on these derivative
financial instruments is recognized in earnings. We do not hold
or issue any derivative financial instruments for trading
purposes.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Impact of Inflation</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have not been adversely affected by inflation as
technological advances and competition have generally caused
prices for the hardware and software that we use for our
electronic platform to remain constant or to decline. In the
event of inflation, we believe that we will be able to pass on
any price increases to our participants, as the prices that we
charge are not governed by long-term contracts.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>New Accounting Pronouncements</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On December&nbsp;16, 2004, the Financial Accounting Standards
Board, or FASB, issued SFAS&nbsp;No.&nbsp;123 (revised 2004),
<I>Share-Based Payment</I>, which is a revision of
SFAS&nbsp;No.&nbsp;123. SFAS&nbsp;No.&nbsp;123(R) supersedes APB
Opinion No.&nbsp;25 and amends SFAS&nbsp;No.&nbsp;95,
<I>Statement of Cash Flows</I>. Generally, the approach in
SFAS&nbsp;No.&nbsp;123(R) is similar to the approach described
in SFAS&nbsp;No.&nbsp;123. However, SFAS&nbsp;No.&nbsp;123(R)
requires all share-based payments to employees, including grants
of employee stock options, to be recognized in the income
statement based on their fair value. Pro forma disclosure is no
longer an alternative.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For public companies that do not file as small business issuers,
SFAS&nbsp;No.&nbsp;123(R) must be adopted no later than
July&nbsp;1, 2005. For nonpublic entities,
SFAS&nbsp;No.&nbsp;123(R) is effective as of the beginning of
the first
</DIV>

<P align="center" style="font-size: 10pt;">69

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<DIV align="left" style="font-size: 10pt;">
annual reporting period that begins after December&nbsp;15,
2005. Early adoption will be permitted in periods in which
financial statements have not been issued. We expect to adopt
SFAS&nbsp;No.&nbsp;123(R) on July&nbsp;1, 2005.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
SFAS&nbsp;No.&nbsp;123(R) permits companies to adopt its
requirements using one of two methods:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    1.&nbsp;A &#147;modified prospective&#148; method in which
    compensation cost is recognized beginning with the effective
    date (a)&nbsp;based on the requirements of
    SFAS&nbsp;No.&nbsp;123(R) for all share based payments granted
    after the effective date and (b)&nbsp;based on the requirements
    of SFAS&nbsp;No.&nbsp;123 for all awards granted to employees
    prior to the effective date of SFAS&nbsp;No.&nbsp;123(R) that
    remain unvested on the effective date.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    2.&nbsp;A &#147;modified retrospective&#148; method which
    includes the requirements of the modified prospective method
    described above, but also permits entities to restate based on
    the amounts previously recognized under SFAS&nbsp;No.&nbsp;123
    for purposes of pro forma disclosures either (a)&nbsp;all prior
    periods presented or (b)&nbsp;prior interim periods of the year
    of adoption.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We plan to adopt SFAS&nbsp;No.&nbsp;123(R) using the modified
prospective method.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As permitted by SFAS&nbsp;No.&nbsp;123, we currently account for
share-based payments to employees using APB Opinion
No.&nbsp;25&#146;s intrinsic value method and, as such,
generally recognize no compensation cost for employee stock
options. Accordingly, the adoption of
SFAS&nbsp;No.&nbsp;123(R)&#146;s fair value method will have a
significant impact on our results of operations, although it
will have no impact on our overall financial position. While we
expect that the impact will be significant, we cannot predict
the amount of the impact at this time because it will depend on
levels of share-based payments granted in the future. However,
had we adopted SFAS&nbsp;No.&nbsp;123(R) in prior periods, the
impact of the standard would have approximated the impact of
SFAS&nbsp;No.&nbsp;123 as described in the disclosure of pro
forma net income and earnings per share in Notes&nbsp;2 and 9 to
our consolidated financial statements and related notes included
elsewhere in this prospectus. It should be noted that there are
certain differences between the requirements of
SFAS&nbsp;No.&nbsp;123 and SFAS&nbsp;No.&nbsp;123(R) that may
result in a material difference in the impact of the fair value
calculations on our net income and earnings per share. This
includes the requirement under SFAS&nbsp;No.&nbsp;123(R) to
estimate forfeitures, the requirement that an excess tax benefit
reduces taxes payable before it is realized, potential changes
to the capitalization of compensation cost and our use of
industry volatility figures in prior periods.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
SFAS&nbsp;No.&nbsp;123(R) also requires the benefits of tax
deductions in excess of recognized compensation cost to be
reported as a financing cash flow, rather than as an operating
cash flow as required under current literature. This requirement
will reduce net operating cash flows and increase net financing
cash flows in periods after adoption. We cannot estimate what
those amounts may be in the future because they depend on, among
other things, when employees exercise stock options. We did not
recognize any tax deductions in excess of the recognized
compensation cost for the years ended December&nbsp;31, 2004,
2003 and 2002.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In December 2004, FASB Staff Position No.&nbsp;SFAS&nbsp;109-2,
<I>Accounting and Disclosure Guidance for the Foreign Earnings
Repatriation Provision within the American Jobs Creation Act of
2004 </I>(FSP SFAS&nbsp;109-2) was issued. FSP SFAS&nbsp;109-2
provides guidance under SFAS&nbsp;109, <I>Accounting for Income
Taxes </I>(SFAS&nbsp;No.&nbsp;109), for recording the potential
impact of the repatriation provisions of the American Jobs
Creation Act of 2004 (the Jobs Act), enacted on October&nbsp;22,
2004. FSP SFAS&nbsp;109-2 allows time beyond the financial
reporting period of enactment to evaluate the effects of the
Jobs Act before applying the requirements of FSP
SFAS&nbsp;109-2. Accordingly, we are evaluating the potential
effects of the Jobs Act and have not adjusted the tax expense or
deferred tax liability as of December&nbsp;31, 2004 to reflect
the requirements of FSP SFAS&nbsp;109-2.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Critical Accounting Policies</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have identified the policies below as critical to our
business operations and the understanding of our results of
operations. The impact of, and any associated risks related to,
these policies on our business operations is discussed
throughout &#147;Management&#146;s Discussion and Analysis of
Financial Condition and Results of Operations&#148; where these
policies materially affected our financial results. For a
detailed discussion on the application of these and other
accounting policies, see note&nbsp;2 to our consolidated
financial statements and related notes included elsewhere in
this prospectus. Our discussion and analysis of our financial
condition
</DIV>

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and results of operations are based upon our consolidated
financial statements, which have been prepared in accordance
with U.S. generally accepted accounting principles. The
preparation of financial statements in conformity with these
accounting principles requires us to make estimates and
assumptions that affect the reported amount of assets and
liabilities, and the disclosure of contingent assets and
liabilities, at the date of our financial statements and the
reported amounts of revenues and expenses during the reporting
period.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We evaluate our estimates and judgments on an ongoing basis,
including those related to the accounting matters described
below. We base our estimates and judgments on our historical
experience and other factors that we believe to be reasonable
under the circumstances existing when we make these estimates
and judgments. Based on these factors, we make estimates and
judgments about, among other things, the carrying values of
assets and liabilities that are not readily apparent from market
prices or other independent sources and about the recognition
and characterization of our revenues and expenses. The values
and results based on these estimates and judgments could differ
significantly under different assumptions or conditions and
could change materially in the future.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We believe that the following critical accounting policies,
among others, affect our more significant judgments and
estimates used in the preparation of our consolidated financial
statements and could materially increase or decrease our
reported results, assets and liabilities.
</DIV>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
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    <TD></TD>
    <TD>
    <B><I>Legal Contingencies</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We are subject to an ongoing risk of potential legal proceedings
and claims. We are currently involved in certain legal
proceedings as discussed under the heading &#147;Regulation and
Legal Proceedings&#148;. Whenever we become involved in a legal
proceeding or claim, through consultation with outside counsel
handling our defense and based upon an analysis of potential
results, assuming a combination of litigation and settlement
strategies, we determine if any legal accrual is required. We
are required to assess the likelihood of any adverse judgments
or outcomes to these matters as well as potential ranges of
probable losses. These losses can be difficult to estimate and,
in the case of judgments or other outcomes that may require us
to change our business or operations, can have a long-term cost
that can be impossible to determine. We make a determination of
the amount of reserves required, if any, for these contingencies
after careful analysis of each individual issue. We have not
established any reserves since our inception, and we currently
do not maintain any reserves.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We face pending regulatory demands and threatened legal claims,
as described under the heading &#147;Regulation and Legal
Proceedings&#148;. However, we have concluded that these matters
have not proceeded sufficiently for their likely outcomes to be
determinable. It is possible, however, that future results of
operations for any particular quarterly or annual period could
be materially and adversely affected by new developments,
changes in our assumptions or the effectiveness of our
strategies relating to these matters.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Goodwill and Other Identifiable Intangible Assets</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have significant intangible assets related to goodwill and
other acquired intangibles. Our determination of related
estimated useful lives of intangible assets and whether or not
these assets are impaired requires us to make significant
judgments. If we change our strategy or if market conditions
shift, our judgments may change, which may result in adjustments
to recorded asset balances.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We periodically evaluate acquired intangible assets for
indications of potential impairment. In assessing the
recoverability of the goodwill and other intangibles, we must
make assumptions regarding estimated future cash flows and other
factors to determine the fair value of the respective assets. If
these estimates or their related assumptions change in the
future, we may be required to record impairment charges against
these assets. Future events could cause us to conclude that
indications of impairment exist and that goodwill associated
with our acquired businesses is impaired. Any resulting
impairment loss could have a material adverse impact on our
financial condition and results of operations. Our goodwill and
other intangible assets are evaluated for impairment annually in
our fiscal fourth quarter or earlier if events indicate that
value may be impaired. Such evaluation includes comparing the
fair value of a reporting unit with its carrying value and
analyzing expected future discounted cash flows at the reporting
unit level. The reporting unit level for our
</DIV>

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<DIV align="left" style="font-size: 10pt;">
goodwill and the majority of our other intangible assets is the
futures business segment, which relates to the operations of our
subsidiary, the IPE. This analysis has not resulted in
impairment through the end of 2004.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2004, we had net goodwill of
$82.5&nbsp;million and net other intangible assets of
$3.6&nbsp;million relating to our acquisition of the IPE in 2001
and our purchase of trademarks and internet domain names from
various third parties in 2003. The FASB issued
SFAS&nbsp;No.&nbsp;141 and SFAS&nbsp;No.&nbsp;142 in June 2001.
SFAS&nbsp;No.&nbsp;141 requires business combinations initiated
after June&nbsp;30, 2001 to be accounted for using the purchase
method of accounting and broadens the criteria for recording
intangible assets separate from goodwill. SFAS&nbsp;No.&nbsp;142
requires the use of a non-amortization approach to account for
purchased goodwill and certain intangibles with indefinite
lives. Effective January&nbsp;1, 2002, we adopted
SFAS&nbsp;No.&nbsp;142. Under the provisions of
SFAS&nbsp;No.&nbsp;142, we no longer amortize goodwill or other
intangible assets with indefinite useful lives. In the period
between the acquisition of IPE and December&nbsp;31, 2002,
goodwill and indefinite lived intangibles were amortized on a
straight-line basis over their estimated useful lives, which
were estimated to be 20&nbsp;years. We recognize specifically
identifiable intangibles when a specific right or contract is
acquired. These intangibles are amortized on a straight-line
basis over the lesser of their contractual and estimated useful
lives, which are estimated to be five years.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The goodwill and other intangible assets balances have increased
since our acquisition of the IPE due to translation adjustments.
Under SFAS&nbsp;No.&nbsp;52, <I>Foreign Currency
Translation</I>, following a business combination, the amounts
allocated as of the acquisition date to the assets acquired and
liabilities assumed, including goodwill and other intangible
assets, should be translated as if the purchase adjustments were
recorded directly on the books of the foreign subsidiary. The
appreciation of pounds sterling relative to the U.S.&nbsp;dollar
in 2004, 2003 and 2002 has increased our goodwill and other
intangibles with a corresponding increase primarily to
accumulated other comprehensive income. The translation
adjustments have also resulted in additional amortization
expenses being recognized on the increase in the definite-lived
other intangible assets.
</DIV>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Capitalized Software Development Costs</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We capitalize costs related to the development of software
developed or obtained for internal use in accordance with AICPA
Statement of Position 98-1, <I>Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use</I>.
Costs incurred during the preliminary project work stage or
conceptual stage, such as determining the performance
requirements, system requirements and data conversion, are
expensed as incurred. Costs incurred in the application
development phase, such as coding, testing for new software and
upgrades that result in additional functionality, are
capitalized and are amortized using the straight-line method
over the useful life of the software, not to exceed three years.
Amortization of these capitalized costs begins only when the
software becomes ready for its intended use. Costs incurred
during the post-implementation/operation stage, including
training costs and maintenance costs, are expensed as incurred.
We capitalized internally developed software costs of
$4.8&nbsp;million, $5.2&nbsp;million and $6.0&nbsp;million
during 2004, 2003 and 2002, respectively. Determining whether
particular costs incurred are more properly attributable to the
preliminary or conceptual stage, and thus expensed, or to the
application development phase, and thus capitalized and
amortized, depends on subjective judgments about the nature of
the development work, and our judgments in this regard may
differ from those made by other companies. General and
administrative costs related to developing or obtaining such
software are expensed as incurred.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We review our capitalized software development costs and our
other long-lived assets for impairment at each balance sheet
date and whenever events or changes in circumstances indicate
that the carrying amount of our long-lived assets should be
assessed. We also write down our property and equipment,
including computers, network equipment, and software, for
estimated obsolescence. Our judgments about impairment are based
in part on subjective assessments of the usefulness of the
relevant software and may differ from comparable assessments
made by others. We have not recorded any impairment charges
since our formation. To analyze recoverability, we estimate
undiscounted net future cash flows over the remaining life of
such assets. If these projected cash flows are less than the
carrying amount, impairment would be recognized, resulting in a
write-down of assets with a corresponding charge to earnings. We
believe that our capitalized software development costs and our
other long-lived assets are appropriately valued in our
consolidated financial statements and related notes included
elsewhere in this prospectus.
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Foreign Currency</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We currently generate a significant portion of our revenues and
net income and corresponding accounts receivable and cash
through sales denominated in pounds sterling. As of
December&nbsp;31, 2004, $46.0&nbsp;million of our cash and cash
equivalents, $4.5&nbsp;million of our accounts receivable,
$85.6&nbsp;million of our goodwill and other intangible assets
and $134.0&nbsp;million of our total net assets were denominated
in pounds sterling. The foreign currency gains and losses on
these pounds sterling net assets are currently significant to
us, and we have determined that foreign currency derivative
products are required to hedge our exposure. If there were a
significant decline in the pounds sterling exchange rate, our
net assets would be less than the current reported amount. As of
December&nbsp;31, 2004, a decline in the exchange rate of pounds
sterling to the U.S.&nbsp;dollar of 10% from the rate as of
December&nbsp;31, 2004 would result in a translation loss of
$15.1&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The functional currency of our foreign subsidiaries is pounds
sterling. We translate these assets and liabilities into
U.S.&nbsp;dollars using period-end exchange rates, and income
and expenses are translated using the average exchange rates for
the reporting period. Translation adjustments are recorded in
accumulated other comprehensive income, a separate component of
shareholders&#146; equity. As of December&nbsp;31, 2004 and
2003, the accumulated other comprehensive income translation was
$37.0&nbsp;million and $26.4&nbsp;million, respectively. Gains
and losses from foreign currency transactions, such as those
resulting from the settlement of foreign receivables or payables
or cash accounts of our foreign subsidiaries held in
U.S.&nbsp;dollars, are included in other income
(expense)&nbsp;in the consolidated statements of income and
resulted in net foreign currency transaction losses of
$1.4&nbsp;million, $644,000 and $149,000 in 2004, 2003 and 2002,
respectively.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
During 2004 and 2003, we entered into hedging transactions to
help mitigate our foreign exchange exposure. During 2004 and
2003, we entered into forward exchange contracts as hedges to
protect the net investment in our foreign subsidiaries. As a
matter of policy, our derivative positions are used to reduce
risk by hedging an underlying economic exposure. Because of the
high negative correlation between the hedging instrument and the
underlying exposure, fluctuations in the value of the
instruments are generally offset by reciprocal changes in the
value of the underlying exposure. Our currency derivatives are
generally straightforward over-the-counter instruments with
liquid markets. We do not hold or issue any derivative financial
instruments for trading purposes. In accordance with
SFAS&nbsp;No.&nbsp;133, we are required to recognize all
derivative financial instruments as either assets or liabilities
in our consolidated balance sheets at fair value. The effective
portion of any gain or loss on these derivative financial
instruments, which have been designated as a hedge of a net
investment in foreign operations, are reflected in accumulated
other comprehensive income. Any ineffective portion of any gain
or loss on these derivative financial instruments are
immediately recognized in earnings. As of December&nbsp;31,
2004, we had a &#163;13&nbsp;million average rate forward net
investment hedge with a June&nbsp;30, 2005 settlement date. The
loss on this hedge was $815,000, net of taxes, as of
December&nbsp;31, 2004 and due to the fact that it was an
effective hedge under SFAS&nbsp;133, it was reflected in
accumulated other comprehensive income. The hedge effectiveness
will continue to be measured on a quarterly basis through the
settlement date. As of December&nbsp;31, 2004 and 2003, the
portion of our shareholders&#146; equity attributable to
accumulated other comprehensive income from hedging derivatives
account balance was a net loss of $2.5&nbsp;million and
$442,000, respectively.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
When entered into, we formally designate and document the
derivative financial instrument as a hedge of a specific
underlying exposure, as well as the risk management objectives
and strategies for undertaking the hedge transactions. We
formally assess, both at inception and at least quarterly
thereafter, whether the derivative financial instruments that
are used in hedging transactions are effective at offsetting
changes in either the fair value or cash flows of the related
underlying exposure. Because of the high degree of effectiveness
between the hedging instruments and the underlying exposure
being hedged, fluctuations in the value of the derivative
financial instruments are offset by changes in the fair value or
cash flows of the underlying exposures being hedged.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The counterparties with whom we trade foreign exchange contracts
are major U.S. and international financial institutions,
including one which is a related-party. For a discussion of the
foreign exchange contracts with the related parties, see
&#147;Certain Relationships and Related Transactions&#148;. We
continually monitor our
</DIV>

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position with and the credit quality of the financial
institutions and do not expect nonperformance by any of the
counterparties.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We will continue to offer additional products in the United
Kingdom and potentially in other countries in Europe beginning
in 2005, which will increase our foreign currency exposure as
these sales and receivables will be denominated in the
functional currency of our foreign subsidiaries.
</DIV>

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<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>INDUSTRY OVERVIEW</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Introduction</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The markets for energy commodities trading include trading in
both physical commodities contracts and derivative
instruments&nbsp;&#151; instruments that derive their value from
an underlying energy commodity or index&nbsp;&#151; across a
wide variety of commodities, including crude oil, natural gas,
electricity or power, coal, chemicals, weather and emissions.
Derivative instruments provide a means for hedging price risk,
asset allocation, speculation or arbitrage. Contracts for
physical commodities allow counterparties to contract for the
delivery of the underlying physical asset.
</DIV>

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    <TD width="3%"></TD>
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    <TD></TD>
    <TD>
    <B><I>Energy Commodities</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Crude oil is one of the world&#146;s most widely-used
commodities, and as such is also one of the most widely-traded
commodities. The term &#147;crude&#148; oil refers to petroleum
in its raw form, as it comes out of the earth. There are several
different types or grades of crude oil traded in the market,
each of which is named to reflect the oil field from which it is
extracted. For example, Brent Crude oil is named for the Brent
Oil Field in the North Sea, off the coast of Britain, and
Oseberg and Forties are grades of crude oil similar to Brent
Crude and are also drawn from the North Sea. Crude oil,
including Brent Crude oil, is only useful after refining, which
produces numerous oil-based component products, including
petroleum gas, gasoline, naphtha, kerosene, gas oil, heavy gas
oil, lubricating oils and residuals, among others. The breadth
of these refined oil products is illustrated in the diagram
below.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<IMG src="y06540y0654000.gif" alt="(CRUDE OIL PRODUCT COMPLEX ILLUSTRATION)">
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Natural gas, another widely-used and widely-traded energy
commodity, is a naturally occurring combustible mixture of
hydrocarbon gases that is extracted from the earth. Natural gas
is used extensively on a commercial basis in the production of
chemicals and the generation of electric power. Residential use
of natural gas is on the rise given its availability and price
relative to heating oil and electric power. While natural gas is
comprised primarily of methane, it can also include ethane,
propane, butane and pentane. Natural gas is found in reservoirs
underneath the earth, and its presence is commonly associated
with crude oil deposits. Once brought from underground, natural
gas is refined to remove impurities such as water and sand, as
well as other gases and compounds. After refining, natural gas
is transported through a network of pipelines, thousands of
miles of which exist in the United States and other developed
countries, to delivery points, or &#147;hubs&#148;.
</DIV>

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Power can be generated through a number of means, including the
burning of refined crude oil products and natural gas, or
through renewable means such as hydro-electric generation or
wind. In contrast to natural gas and crude oil, power is a
man-made &#147;end&#148; commodity that cannot be
stored&nbsp;&#151; it must be used as it is produced&nbsp;&#151;
and therefore is transported only within the regions in which it
is generated.
</DIV>

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Natural gas and power contracts are traded based, in part, upon
the location to which they are delivered. In North America,
there are nearly 100 natural gas hubs (including the benchmark
Henry Hub located in Louisiana), and approximately 15 power
hubs. Market participants can trade contracts for natural gas or
power based on any of these hubs, whose prices are determined by
transportation costs and supply and demand at each hub. An
example of a leading regional power contract is the PJM
financial power contract, which is based on power generated in
the Pennsylvania, New Jersey and Maryland region. Further,
natural gas market participants often enter into basis swaps
that hedge the difference in cost between delivery to the
benchmark Henry Hub and another hub that may be closer to the
participants&#146; preferred point of delivery. The diagrams
below illustrate the locations of some of the major North
American natural gas and power hubs.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Major North American Natural Gas Hubs</B>
</DIV>

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<B>Major North American Power Hubs</B>
</DIV>

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<IMG src="y06540y0654015.gif" alt="LOGO">
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    <TD width="93%"></TD>
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    <TD>Source:&nbsp;</TD>
    <TD align="left">
    Energy Information Association (EIA); Intelligence Press Inc.</TD>
</TR>

</TABLE>

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    <TD></TD>
    <TD>
    <B><I>Derivatives and Physical Commodities Contracts</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition to being characterized by an underlying commodity or
component asset, derivative contracts are further characterized
by physical delivery or financial settlement, as well as the
term of the contract. The contracts with the greatest liquidity
are those that have settlement or expiry dates within the
following one or two months, called the prompt or front months.
Contracts that have settlement dates one year out or longer,
referred to as the back months, tend to be less actively traded.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Participants in the markets for energy commodities trading
include industrial firms that produce or use energy products and
financial institutions, among others. These market participants
pursue a range of trading strategies for a variety of reasons,
including:
</DIV>

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    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
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    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Risk Management:</I> Firms that produce or consume
    commodities may use physical or derivative contracts to hedge
    their exposure to future price movements.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Asset Allocation:</I> Derivative contracts allow market
    participants to gain market exposure to the returns or
    diversification offered by a particular commodity or group of
    commodities without investing in the underlying physical asset.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Speculation:</I> Market participants that have a specific
    view on the direction of commodity prices may buy or sell
    derivative contracts in anticipation of benefiting from a
    commodity&#146;s directional price movement, whether rising or
    falling.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Arbitrage:</I> Market participants may buy or sell derivative
    contracts in an attempt to profit from perceived value
    differences among related commodities, or correlated asset
    classes, or between the derivatives and physical markets.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Physical delivery:</I> Firms that consume or are under
    contractual obligations to deliver or purchase energy
    commodities in physical form, such as a natural gas distribution
    company, may enter into a contract that will give them the right
    to receive or sell a specified quantity of the underlying
    commodity at a specified time and location in the future.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
There are two types of market structures within the energy
commodities trading sector&nbsp;&#151; the futures market and
the OTC market. These market structures are distinguished by
their unique regulatory, participatory, reporting and
operational requirements.
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<B>The Futures Market</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
According to the Futures Industry Association, the broader
futures market is comprised of more than
50&nbsp;government-regulated exchanges located in
29&nbsp;countries, including 11&nbsp;exchanges located in the
United States. Until the early 1970s, futures markets were
restricted to commodities (<I>e.g.</I>, wheat, copper, sugar).
Since that time, futures markets have expanded to incorporate
additional market sectors, including: currencies, interest rate
instruments and stock indices. Futures exchanges that trade
energy commodities include, among others, NYMEX (which
principally trades in futures on energy and precious metals) and
The Tokyo Commodity Exchange (which principally trades futures
on gold, silver, platinum, crude oil, gasoline, kerosene and
rubber) and, to a lesser extent, the Chicago Mercantile
Exchange, or CME (which principally trades futures on interest
rates, stock indices, foreign currencies and agricultural
commodities) and the Chicago Board of Trade, or the CBOT (which
principally trades futures on financial instruments,
agricultural commodities, precious metals and equity indices).
In addition to offering trading of standardized contracts,
futures exchanges provide access to a centralized clearing
system. Commodity futures exchanges are regulated in the United
States by the CFTC and are required to publish certain
information, such as prices and participant information.
Commodity futures exchanges are regulated in the United Kingdom
by the FSA.
</DIV>

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A futures exchange typically operates as an auction market,
where trading is conducted either on an open-outcry trading
floor or on an electronic platform. In an auction market, prices
are established publicly either on the floor or on a screen by
participants posting bids, or buying indications, and offers, or
indications to sell. In a typical futures market, participants
can trade two types of instruments:
</DIV>

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    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Futures:</I> A future is the most common exchange-traded
    commodity contract. It is a standardized contract to buy or sell
    a specified quantity of an underlying asset during a particular
    month (an exact delivery date is not specified). Delivery
    amounts are standardized and differ by commodity. For example,
    the IPE Brent Crude futures contract has a contract quantity of
    1,000&nbsp;net barrels, or 42,000 U.S.&nbsp;gallons. The price
    of the futures contract is determined through the auction
    process on the exchange. These contracts are settled through
    either physical delivery or cash settlement.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Options:</I> An option is a contract that conveys to the
    buyer the right, but not the obligation, to call (buy) or put
    (sell) an underlying futures contract at a price determined at
    the time of the execution of the option.</TD>
</TR>

</TABLE>

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Historically, trading in futures contracts took place
exclusively through face-to-face interaction on a physical
trading floor of an exchange, also known as a &#147;pit&#148;,
through an auction process known as &#147;open-outcry&#148;. In
an open-outcry market, the matching of buyers and sellers is
achieved by traders in the pit locating other traders in the pit
who have an opposite trading interest. As the name implies,
traders &#147;cry out&#148; their bids and offers, often in
combination with a system of hand signals, with the objective of
finding a counterparty with whom to trade.
</DIV>

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The trading floor imposes physical limitations on the number of
traders who can trade or observe the market at any one time.
Therefore, exchanges generally restrict direct access to their
trading floor to a limited number of exchange members. This
limited access may drive up the price of membership on the
exchange, and requires non-members to execute trades through
intermediaries, such as brokers known as futures commission
merchants, or FCM&#146;s, who are members of the exchange. As a
result of these physical limitations, the open-outcry model is
inefficient in certain respects, including the high cost of
operating and accessing a physical trading floor, the relatively
slow speed of execution, the inefficiencies inherent in
requiring participants to use multiple intermediaries to
complete transactions, and the increased risk of error arising
from miscommunication. These inefficiencies have caused many
futures exchanges to develop electronic trade execution
facilities over the last decade, thereby reducing the access
limitations and inefficiencies of open-outcry trading.
</DIV>

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All futures contracts and options on futures contracts are
cleared through a central clearinghouse. Clearing is the
procedure by which each futures and options contract traded on
an exchange is novated, or replaced, with a contract with the
clearinghouse. In this process, the clearinghouse is interposed
between the trading parties and becomes the buyer to each member
firm that is a seller, and the seller to each member firm that
is a buyer. By interposing itself between the member firm
parties of every trade, the clearinghouse guarantees each member
firm party&#146;s performance, and eliminates the need to
evaluate counterparty credit
</DIV>

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<DIV align="left" style="font-size: 10pt;">
risk. FCMs function, in turn, as intermediaries between market
participants and a clearinghouse. From the participant&#146;s
perspective, the FCM is the counterparty to a cleared trade, as
the contract is cleared by the clearinghouse in the name of the
FCM. From the clearinghouse&#146;s perspective, the FCM is the
counterparty to the trade. In effect, the clearinghouse takes on
the counterparty credit risk of the FCM, and the FCM assumes the
credit risk of each counterparty, which is partially offset by
capital held by the FCM with respect to each counterparty.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Some futures exchanges, such as NYMEX, CME and Eurex, own and
operate their own clearinghouse. Other exchanges contract for
their clearing services with a third party. For example, we
clear our futures contracts through LCH.Clearnet and the CBOT
clears its contracts through the clearinghouse operated by CME.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>The OTC Market</B>
</DIV>

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Over-the-counter, or OTC, is a term used to describe trading
activity that does not take place on a regulated exchange.
According to the Bank for International Settlements, 84% of the
volume of all derivative contracts traded in 2004 took place in
the OTC market. In this market, commercial market participants
have historically entered into negotiated, bilateral contracts,
although in recent years participants have begun to take
advantage of cleared OTC contracts that, like futures contracts,
are standardized and cleared through a central clearinghouse.
</DIV>

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In contrast to the limited range of futures contracts available
for trading on regulated exchanges, participants in the OTC
markets have the ability to trade an unlimited number of
customized contracts, which may specify contract terms, such as
the underlying commodity, delivery date and location, term and
contract size. Furthermore, while exchanges typically limit
their hours of operation and restrict direct trading access to a
limited number of exchange members, OTC markets operate
virtually around the clock and do not impose membership
requirements.
</DIV>

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Financially settled OTC contracts are classified as
derivatives&nbsp;&#151; meaning that the contract is settled
through cash payments based on the value of the underlying
commodity, rather than through physical delivery of the
commodity. Physical contracts provide for settlement through
physical delivery of the underlying commodity. Physical
contracts may be entered into for either immediate delivery of a
commodity, in the cash or &#147;spot&#148; market, or for
delivery of a commodity at a specified time in the future, in
the &#147;forward&#148; market. Forward contract prices are
generally based on the spot market prices of the underlying
commodity, since long-term contracts evolve into short-term
contracts over time.
</DIV>

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Several types of contracts are typically traded in the OTC
market:
</DIV>

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    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
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    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Forwards and Swaps:</I> A forward contract is an agreement
    between two parties to deliver a specified quantity of an
    underlying asset, on a specified date, and at a specified
    location. Unlike futures contracts discussed above, forward
    contracts are not standardized, but can be negotiated on an
    individual basis between counterparties. Swaps generally are
    contracts between the holders of two different assets with
    differing risk and performance profiles in which the risk or
    performance characteristics are exchanged. Swaps may be settled
    against the future price of a single commodity or against an
    index of commodity prices.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Differentials and Spreads:</I> Differentials, or basis swaps,
    are contracts that allow counterparties to &#147;swap&#148;
    delivery (or the financial equivalent of delivery) of a
    commodity between two different delivery points. For example,
    trading parties may enter into a basis swap for natural gas by
    swapping delivery of natural gas at the benchmark Henry Hub for
    delivery at any one of the nearly 100 other hubs in North
    America. This type of contract allows market participants to
    hedge or speculate on forward natural gas prices in various
    markets. The price of a basis swap contract is based on the cost
    differential between delivery at each hub. Spreads are the
    simultaneous purchase and sale of forward contracts for
    different months, different commodities or different grades of
    the same commodity.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Options:</I> Options are contracts that convey to the buyer
    the right, but not the obligation, to require the seller to make
    or take delivery of a stated quantity of a specified commodity
    at a specified price.</TD>
</TR>

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    <TD width="1%"></TD>
    <TD width="96%"></TD>
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    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left">
    Options may also be cash settled, based on the difference
    between the market price of the underlying commodity and the
    price of the commodity specified in the option.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As a general matter, OTC transactions may be entered into
directly between two counterparties, or they may be entered into
through a broker. Trading in the OTC commodities markets has
traditionally been carried out through brokers who conduct
trades with their customers over the telephone, commonly
referred to as &#147;voice brokers&#148;. Upon receiving an
order from a customer, a broker attempts to find a counterparty
for the proposed trade. Once the broker has matched a firm bid
with a firm offer and completes the deal telephonically, the
seller must send a confirmation fax or similar documentation to
the buyer to confirm the trade. Each counterparty then enters
the details of the trade into its respective internal risk
management system. This traditional method of OTC commodities
trading tends to be relatively slow, prone to errors and can
involve relatively high transaction costs.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Since participants in the OTC commodities markets have
traditionally entered into individually negotiated bilateral
contracts, the OTC markets have traditionally been characterized
by fragmented liquidity and a lack of price transparency.
Without a centralized, comprehensive source of pricing data and
an observable, real-time market for a specific contract, it was
often difficult for market participants to determine the best
price available for their trade.
</DIV>

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Because bilateral OTC contracts are entered into and settled on
a principal-to-principal basis, each party is exposed to
counterparty credit risk. Therefore, traditionally, OTC market
participants have relied heavily on their internal risk
management systems to monitor and mitigate counterparty credit
and performance risk. In recent years, a growing number of
markets, including ours, have begun to offer clearing for some
of the more commonly traded OTC contracts to address the risks
associated with entering into bilateral agreements. Participants
who choose to trade cleared OTC products must have an account
with a FCM.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A key structural difference between futures and cleared OTC
forward markets on the one hand and equity markets on the other
hand is the need for a trader in the futures or OTC forward
markets to close out a long or short position through the same
exchange on which the original position was established. This
has the benefit of retaining the open interest at that exchange.
In contrast, traders in equity markets can execute any trade on
any exchange with quality and cost of execution being the only
considerations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Industry Size and Growth</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The volume of energy derivative contracts traded for any
specific commodity tends to be a multiple of the physical
production of that commodity. For example, the equivalent of
approximately 310&nbsp;million barrels of crude oil was traded
on the IPE and NYMEX on average each day during 2004, or 3.75
times physical consumption and production during the same
period. In the natural gas market, the volume of
financially-settled contracts traded in North America during the
first nine months of 2004 represented 172&nbsp;trillion cubic
feet, or approximately 8.4&nbsp;times the 20.4&nbsp;trillion
cubic feet consumed during the same period, according to the
International Energy Agency, or IEA.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The global growth in consumption of physical energy commodities
is largely tied to global GDP growth. According to the
International Energy Agency, or IEA, global consumption and
production of crude oil in 2004 totaled 83&nbsp;million barrels
per day. By 2025, the Energy Information Administration, a
division of the U.S.&nbsp;Department of Energy, or EIA-DOE,
expects global oil demand to increase to 120&nbsp;million
barrels per day. Natural gas consumption in 2003 (the most
recent year for which data is available) by the 30 nations
comprising the OECD was 49&nbsp;trillion cubic feet.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Energy commodities as an investable asset class have experienced
tremendous growth in recent years. For example, in 1996,
$2.0&nbsp;billion was invested in funds tracking the Goldman
Sachs Commodity Index, 70% of which is allocated to energy
products. By the end of 2004, that amount had risen ten-fold, to
more than $25.0&nbsp;billion, implying a 37% compound annual
increase. Additionally, according to the Futures Industry
Association, the number of energy futures contracts traded in
2004 was 243.5&nbsp;million, up from 68.7&nbsp;million contracts
traded in 1995, a growth rate of 15%&nbsp;per annum.
</DIV>

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The following chart illustrates the growth in the volume of
energy futures contracts traded from 1995 through 2004.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Global Energy Futures Industry
Volume<SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<IMG src="y06540y0654003.gif" alt="LOGO">
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Industry Trends</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We believe that the increasing interest in energy derivatives
trading is being driven primarily by the following key factors:
</DIV>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Growth in Electronic Trading</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Innovations in technology have increased the speed of
communications and the availability of information, which have
enabled market participants to access and participate in the
commodities markets more easily and quickly and less
expensively. During the last decade, the use of electronic
trading has become increasingly prevalent, and offers a number
of advantages relative to floor-based trading, including:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    direct market access and the elimination of physical trading
    barriers;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the ability to trade multiple products on multiple exchanges
    simultaneously;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    improved speed and quality of trade execution;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    significant reduction of direct and indirect transaction costs;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    ease of direct integration with internal risk management systems;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    greater transparency for market participants and observers;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    extended trading hours and the availability of cross-border
    trade execution;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    improved regulatory oversight and ease of complete and accurate
    record-keeping.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
These advantages are encouraging an increasing number of market
participants to transition to electronic energy trading. In
addition, a number of market participants only trade
electronically. Because energy commodity futures have
historically traded on open-outcry exchanges, these market
participants, including several proprietary trading firms and
hedge funds, have been unable or unwilling to trade these
products in the past.
</DIV>

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The shift toward electronic trading is evident in both futures
and OTC markets. Celent estimates that 17% of U.S. energy
commodities trading is conducted electronically, and expects
this figure to increase to 29% by 2008. In the futures market,
the growth in trading volumes on electronic exchanges such as
Eurex and LIFFE in Europe, and hybrid markets with both floor
and significant electronic operations such as CME, has
significantly outpaced the volume growth on historically
floor-based exchanges such as the IPE, NYMEX, and the CBOT
during the last five years.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The figure below illustrates the volume growth of six major
global futures exchanges, indexed from 1999 to 2004.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<IMG src="y06540y0654004.gif" alt="LOGO">
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Lower Barriers to Entry for Market Participants</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The barriers to entry for trading in energy derivatives have
traditionally been significant, which has limited the ability of
many traders to participate in this market. In recent years, a
considerable erosion of these barriers has occurred largely due
to the availability of electronic trading. In addition to
electronic trading, other changes in market structure
contributing to lower barriers to entry include:
</DIV>

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    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Declining exchange membership fees:</I> Growing competition
    among exchanges has resulted in some futures exchanges reducing
    the cost of exchange membership.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Use of independent software vendors:</I> ISVs are firms that
    develop and market software that provides direct access to
    various electronic markets. ISVs allow participants to access
    multiple exchanges through a single interface and are typically
    well integrated with participants&#146; internal risk management
    systems. For example, proprietary trading firms frequently use
    ISVs to connect to multiple exchanges. ISVs have significantly
    expanded market access, including at multiple locations that are
    great distances from major market centers, which has in turn
    increased the number of active traders in the market.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Introduction of cleared OTC contracts:</I> As described
    above, trading in the OTC markets traditionally has required
    participants to assume counterparty credit risk. However, energy
    markets now feature cleared OTC contracts, beginning with the
    introduction of these contracts in our markets in 2002. Cleared
    OTC contracts allow participants to limit counterparty credit
    risk and lower the amount of capital required to trade.</TD>
</TR>

</TABLE>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Increasing Adoption of Energy Commodities as an Investable
    Asset Class</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Investors&#146; interest in energy commodities as an asset class
has experienced significant growth in recent years. A number of
attributes inherent to energy commodities have contributed to
this growth including:
</DIV>

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    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Higher Volatility:</I> Energy commodities generally
    experience greater price volatility than other asset classes,
    such as stocks or bonds, because their prices are impacted by a
    greater array of risks, including weather, geopolitical events,
    OPEC quotas and supply interruptions. Volatility increases the
    need to hedge contractual price risk and creates opportunities
    for speculative trading and arbitrage.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;&nbsp;</TD>
    <TD align="left">
    The following table illustrates the historical volatility of
    natural gas and crude oil, compared to that of stocks and bonds.</TD>
</TR>

</TABLE>

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<IMG src="y06540y0654014.gif" alt="LOGO">
</DIV>

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    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Geopolitical Risk:</I> The price level and volatility of
    energy commodities, and oil in particular, tend to reflect
    events in the geopolitical environment. Therefore, market
    participants seeking exposure to, or a hedge against, global
    events in their investment portfolio, or seeking to speculate on
    the directional movement of a price in response to a particular
    event, may find energy commodity derivatives attractive.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Low/Negative Correlation with Other Asset Classes:</I>
    According to a study conducted by the National Bureau of
    Economic Research in June 2004, the correlation between price
    movements in energy derivatives and those in stock indices and
    bonds has historically been negative for holding periods of
    greater than one month&nbsp;&#151; meaning that prices in the
    energy derivatives markets generally move in the opposite
    direction of price movements in the stock and bond markets. For
    shorter holding periods (<I>i.e.</I>, one month or less), this
    correlation has historically been insignificant. This
    low/negative correlation has made energy derivatives an
    attractive way to hedge and improve the overall risk profile of
    an investment portfolio.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Asset Diversification:</I> As investors seek to increase
    investment yield while minimizing portfolio risk, investment
    professionals have sought to diversify into additional asset
    classes. As a result of this trend, use of derivative contracts
    related to the energy sector has grown, and with the increased
    availability and accessibility of electronic trading we believe
    it will continue to grow, as a component of investors&#146;
    portfolios.</TD>
</TR>

</TABLE>

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    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Attractive Investment Returns:</I> Competition for
    above-market returns has been driving an increasing number of
    money managers to search for, and invest in, new asset classes.
    We believe the strong historical performance of commodities
    relative to other asset classes is an important factor that has
    led to their increasing attractiveness as an investment option.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following diagram illustrates the performance of selected
energy commodities compared to selected traditional asset
classes over a ten-year period.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>10-Year Indexed Performance of Energy Commodities vs.
Traditional Assets</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<IMG src="y06540y0654006.gif" alt="LOGO">
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    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>New Market Participants</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Recent growth in energy derivatives trading has been driven in
part by increased participation in energy markets by the
following categories of market participants:
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Financial institutions:</I> Financial institutions are
    expanding their capabilities and resources in energy commodities
    trading, attempting to capitalize on increased energy market
    volatility as well as to leverage their deep client
    relationships, strong credit ratings, and sophisticated risk
    management controls. For example, some financial institutions in
    recent years have become owners of utilities and other energy
    production facilities, increasing their participation in these
    markets for hedging purposes. In addition, many independent
    utility operators, which are exposed to market price risk, are
    outsourcing their hedging activity to financial institutions.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Hedge funds:</I> Hedge funds have committed significant
    capital in recent years to trading in energy commodities in
    search of above-market, uncorrelated investment returns, and
    today play a role in providing liquidity in certain energy
    markets. Global macro funds (the most-employed hedge fund
    strategy in terms of invested capital) are actively increasing
    their exposure to energy commodities, and it is estimated that
    as many as 300 new energy-focused funds may launch in 2005,
    according to Investment Dealers&#146; Digest.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Proprietary trading firms:</I> The number of proprietary
    trading firms has increased in conjunction with the migration
    toward electronic trading. Definitive data on the number of
    these firms, the number of</TD>
</TR>

</TABLE>

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    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

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    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left">
    traders they employ, or their contribution to current daily
    trading volume is not readily available, although we believe
    that their ability to provide liquidity is and will continue to
    be significant. Given that the barriers to entry for traders
    working at these types of firms are relatively low&nbsp;&#151;
    requiring at a minimum a &#147;screen&#148;, a nominal amount of
    their own capital, a credit line and access to execution
    services&nbsp;&#151; we expect that the number of these market
    participants will continue to increase.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Institutional investors:</I> Institutional investors, such as
    pension funds, are increasingly allocating a growing percentage
    of their funds to commodities to maximize the benefits of
    diversification. According to Celent, pension funds currently
    allocate an estimated three to five percent of their overall
    portfolio to commodities. Additionally, Celent notes that
    insurance companies, foundations and endowments have begun to
    show interest in the commodities sector.</TD>
</TR>

</TABLE>

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<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>BUSINESS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Overview</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We operate the leading global futures and over-the-counter, or
OTC, marketplace for trading a broad array of energy products.
Our marketplace brings together buyers and sellers of
derivatives and physical energy commodities contracts through
our leading, Internet-based electronic trading platform. Our
electronic platform increases the accessibility and transparency
of the energy commodities markets and enhances the speed and
quality of trade execution. The open architecture of our
business model&nbsp;&#151; meaning our ability to offer
centralized access to trading in futures and OTC contracts on a
cleared or bilateral basis through multiple
interfaces&nbsp;&#151; allows our participants to optimize their
trading operations and strategies. We conduct our OTC business
directly, and our futures business through our wholly-owned
subsidiary, the International Petroleum Exchange, or the IPE.
The IPE is the largest energy futures exchange in Europe, as
measured by 2004 traded contract volumes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
During 2004, 35.5&nbsp;million contracts were traded in our
futures markets both on our electronic platform and on our
open-outcry trading floor and 31.0&nbsp;million contracts were
traded in our OTC markets, up 6.6% from 33.3&nbsp;million
futures contracts traded in 2003 and up 27.6% from
24.3&nbsp;million OTC contracts traded in 2003. Our revenues
consist primarily of transaction fees, trading access fees and
market data fees. On a consolidated basis, we generated
$108.4&nbsp;million in revenues in 2004, a 15.6% increase
compared to $93.7&nbsp;million in 2003, and $21.9&nbsp;million
in net income in 2004, a 64.1% increase compared to
$13.4&nbsp;million in 2003. We recorded consolidated net cash
provided from operations of $40.2&nbsp;million in 2004, a 48.2%
increase compared to $27.1&nbsp;million in 2003.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Our History</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 1997, Jeffrey C. Sprecher, our founder, chairman and chief
executive officer, acquired Continental Power Exchange, Inc., or
CPEX, our predecessor company, to develop a platform to provide
a more transparent and efficient market structure for OTC energy
commodities trading. In May 2000, our company was formed, and
CPEX contributed to us all of its assets, which consisted
principally of electronic trading technology, and its
liabilities, in return for a minority equity interest in our
company. In connection with our formation, seven leading
wholesale commodities market participants, which we refer to as
our Initial Shareholders, acquired equity interests in our
company and entered into order flow agreements with us. In
November 2000, six leading natural gas and power companies,
which we refer to as the Gas and Power Firms, acquired equity
interests in our business, entered into order flow agreements
with us and made a $30&nbsp;million cash payment to us. The
order flow agreements, which committed the Initial Shareholders
and the Gas and Power Firms to execute minimum annual volumes of
transactions on our electronic platform, expired between 2002
and 2003. We currently have no order flow agreements in effect
with any market participant.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In June 2001, we expanded our business into futures trading by
acquiring IPE Holdings Plc, the owner of the IPE, which, at the
time, was operated predominantly as a floor-based, open-outcry
exchange. The IPE had been seeking to expand its electronic
trading capabilities since the late 1990s following the
emergence of the industry trend toward electronic trade
execution. At the time, we were seeking to expand our product
offerings and to gain access to clearing and settlement
services. Based on the complementary nature of our businesses,
we decided to acquire the IPE to develop a leading platform for
energy commodities trading that would offer liquidity in both
the futures and OTC markets. The IPE, as a regulated futures
exchange, had both established liquidity and a recognizable
brand name in global energy markets. Prior to our acquisition of
the IPE, we conducted trading only in OTC markets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We believe that we have achieved many strategic benefits through
the successful integration of futures markets into our business.
For example, we have been able to expand our product offerings
through the introduction of the industry&#146;s first cleared
OTC products, which we were able to offer in conjunction with
the IPE&#146;s third-party clearing provider, LCH.Clearnet. Our
acquisition of the IPE included a futures market data business,
which, together with the market data generated by trading
activity in our OTC markets, has given us access to a broad and
valuable range of data related to the energy commodities
markets. We have developed, and intend to continue to develop,
these market data services to increase and diversify our
revenues.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Our Business</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our marketplace is globally accessible, promotes price discovery
and offers participants the opportunity to trade a variety of
energy products. Our key products include contracts based on
crude or refined oil, natural gas and power. Our derivative and
physical products provide participants with a means for managing
risks associated with changes in the prices of these
commodities, asset allocation, ensuring physical delivery of
select commodity products, speculation and arbitrage. The
majority of our trading volume is financially settled, meaning
that settlement is made through cash payments based on the value
of the underlying commodity, rather than through physical
delivery of the commodity itself.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We operate our business in two distinct markets: futures markets
and OTC markets. Futures markets offer trading in standardized
derivative contracts on a regulated exchange and OTC markets
offer trading in over-the-counter derivative contracts,
including contracts that provide for the physical delivery of an
underlying commodity and contracts that provide for financial
settlement based on the prices of underlying commodities. All
futures and cleared OTC contracts are cleared through a central
clearinghouse. We offer OTC contracts that can be traded on a
bilateral basis and certain OTC contracts that can be traded on
a cleared basis. Bilateral contracts are settled between
counterparties, while cleared contracts are novated to a third
party clearinghouse, where they are marked to market and
margined daily before final settlement at expiration.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We operate our futures markets through our subsidiary, the IPE,
a Recognized Investment&nbsp;Exchange, or RIE, based in London,
and currently offer trading both on our electronic platform and
on our open-outcry trading floor. We operate our OTC markets
exclusively on our electronic platform. In addition to trade
execution, our electronic platform offers a comprehensive suite
of trading-related services, including electronic trade
confirmation, access to clearing services and risk management
functionality. Our trading-related services are designed to
support the trading operations of our participants. Through our
electronic platform, we are able to facilitate straight-through
processing of trades, and to provide seamless integration of
front-, back- and mid-office trading activities. We also offer a
variety of market data services for both the futures and OTC
markets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
To take advantage of the increasing acceptance and adoption of
electronic trading, and to maintain and enhance our competitive
position, we recently announced our intention to close our
open-outcry trading floor in London on April&nbsp;7, 2005.
Thereafter, all futures trading will be conducted exclusively on
our electronic platform. For a discussion of this announcement
and the strategic and financial benefits we expect to achieve,
see &#147;&#151;&nbsp;Recent Developments&#148;.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following diagram illustrates the range of services we are
able to offer through our electronic platform:
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<IMG src="y06540y0654007.gif" alt="LOGO">
</DIV>

<P align="center" style="font-size: 10pt;">87

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<DIV style="margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Futures Business</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We conduct our futures business through our subsidiary, the IPE.
The IPE operates as an RIE in the United Kingdom, where it is
regulated by the FSA. The IPE was founded in 1980 as a
traditional open-outcry auction market by a group of leading
energy and trading companies. Only exchange members may execute
trades in our futures markets, for their own or others&#146;
account. Our members and their participants include many of the
world&#146;s largest energy companies and leading financial
institutions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In our futures markets, we offer trading in the IPE Brent Crude
futures contract, a benchmark contract relied upon by certain
large oil producing nations to price their oil production. This
contract is the leading benchmark for pricing crude oil produced
and traded outside of the United States, and for pricing a
majority of the world&#146;s traded oil products. We believe
that market participants are increasingly relying on the IPE
Brent Crude contract for their hedging and risk management
activities, as evidenced by steady increases in traded volumes
over the past several years. In 2004, the average daily volume
in our futures markets in Brent Crude was approximately
100&nbsp;million barrels of oil with an average daily notional
value of over $3.7&nbsp;billion.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We earn fees from both parties to each futures contract (or
option on a futures contract) traded in our markets, based on
the number of contracts traded. Exchange fees earned from
contracts traded in our futures markets were $45.5&nbsp;million
in 2004, representing 42.0% of our consolidated revenues, and
$40.0&nbsp;million in 2003, representing 42.6% of our
consolidated revenues. We derived revenues from the provision of
market data services of $6.3&nbsp;million, or 5.8% of our
consolidated revenues for 2004, and $6.3&nbsp;million, or 6.7%
of our consolidated revenues in 2003. In 2004, over
35.5&nbsp;million contracts were traded in our futures markets,
representing a 6.6% increase as compared to 33.3&nbsp;million
contracts traded in 2003. For the period from November&nbsp;1,
2004 through February&nbsp;28, 2005, 26.9% of our futures
trading volume in the IPE Brent Crude futures contract was
executed electronically.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>OTC Business</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In our OTC business, we operate OTC markets through our globally
accessible electronic platform. We offer trading in thousands of
OTC contracts, which cover a broad range of energy products and
contract types. These products include derivative contracts as
well as contracts that provide for physical delivery of the
underlying commodity, in each case principally relating to
natural gas, power and oil. We are able to offer a wide
selection of derivative contracts in our OTC markets due to the
availability of various combinations of commodities, product
types, &#147;hub&#148; locations and term or settlement dates
for a given contract.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our participants, representing many of the world&#146;s largest
energy companies and leading financial institutions, as well as
proprietary trading firms, natural gas distribution companies
and utilities, rely on our platform for price discovery, hedging
and risk management. As of February&nbsp;28, 2005, we had over
4,900&nbsp;active screens at over 890&nbsp;OTC participant
firms, and on a typical trading day, over 3,600 individual
screen users connect to our platform for trading, risk
management and price discovery.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In order to provide participants with access to centralized
clearing and settlement, we launched the industry&#146;s first
cleared natural gas and oil OTC products in March 2002, and
introduced our first cleared OTC power contracts in November
2003. Our most liquid OTC markets include contracts that can be
traded bilaterally or cleared. In 2004, 31.0&nbsp;million
contracts were traded in our OTC markets with an aggregate
notional value of $536.8&nbsp;billion, of which
18.1&nbsp;million contracts were cleared, representing
$300.7&nbsp;billion in notional value.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Revenues in our OTC business are generated primarily through
commission fees earned for trades executed on our platform and
for the provision of OTC market data and electronic trade
confirmation services. While we charge a monthly minimum
commission fee for access to our platform, we derive a
substantial portion of our OTC revenues from commission fees
paid for trade execution in excess of the monthly minimum volume
requirements. Our OTC commission rates vary by product and
contract, and we charge a fixed commission rate based on the
volume of commodity underlying the contract traded. For example,
power is traded in units of megawatt hours&nbsp;&#151; on
average, one megawatt hour would supply power to approximately
1,000&nbsp;homes for approximately one hour. Commission fees are
payable by both parties to a contract and, for
</DIV>

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<DIV align="left" style="font-size: 10pt;">
bilateral trades, are due generally within 30&nbsp;days of the
invoice date. For cleared OTC contracts, LCH.Clearnet collects
our commission fees as they are incurred and pays us monthly. We
do not risk our own capital in transactions or extend credit to
market participants.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We derived commission fees for OTC trades executed on our
electronic platform of $43.5&nbsp;million in 2004, or 40.2% of
our consolidated revenues, and $34.2&nbsp;million in 2003,
representing 36.5% of our consolidated revenues. We derived
revenues from the provision of market data services of
$3.4&nbsp;million, representing 3.1% of our consolidated
revenues in 2004, and $1.4&nbsp;million, or 1.5% of our
consolidated revenues in 2003.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have significantly broadened and diversified our participant
base since our inception. In the past, our Initial Shareholders
and the Gas and Power Firms were both our principal shareholders
and the principal users of our electronic platform. The total
commission fee revenues earned from these firms and our other
shareholders accounted for 25.1%, 40.4% and 61.2% of our total
OTC&nbsp;commission fee revenues, in 2004, 2003 and 2002,
respectively.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Our Competitive Strengths</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have established ourselves as the leading marketplace for
global futures and OTC energy commodities trading by leveraging
a number of key strengths, including:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    highly liquid global markets and benchmark contracts;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    leading electronic energy trading platform;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    integrated access to futures and OTC markets;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    highly scalable, proven technology infrastructure;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    transparency and independence;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    strong value proposition;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    strong management team.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Highly Liquid Global Markets and Benchmark
    Contracts</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We offer liquid markets in a number of the most actively traded
global energy commodities products. We operate the leading
market for trading in Brent Crude futures. The IPE Brent Crude
futures contract is the leading benchmark for pricing crude oil
produced and consumed outside of the United States, and for
pricing a majority of the world&#146;s traded oil products. We
also operate the leading market for trading in cleared OTC Henry
Hub natural gas contracts, with 17.0&nbsp;million contracts
traded in 2004. Henry Hub natural gas markets are the most
liquid natural gas markets in North America. We believe that our
introduction of cleared OTC products has enabled us to attract
significant liquidity in the OTC markets we operate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table shows the notional value and number of
commodities futures contracts traded in our futures markets (for
both open-outcry and electronic trading). The notional value of
contracts represents the aggregate value of the underlying
commodities covered by the contracts.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="35%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="14" align="center" nowrap><B>Year Ended December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="14" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2003</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Number of</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Number of</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Contracts</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Notional Value</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Contracts</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Notional Value</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(in thousands)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(in billions)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(in thousands)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(in billions)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    IPE Brent Crude futures</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25,458</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>955.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24,013</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>665.7</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    IPE Gas Oil futures</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,356</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>318.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,430</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>208.2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    IPE Natural Gas futures</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>649</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>815</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>27.2</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;">89

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table shows the notional value and number of OTC
commodities contracts traded on our electronic platform in our
most significant OTC markets:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="35%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="14" align="center" nowrap><B>Year Ended December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="14" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2003</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Number of</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Number of</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Contracts</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Notional Value</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Contracts</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Notional Value</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(in thousands)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(in billions)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(in thousands)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(in billions)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    North American natural gas</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25,574</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>388.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,703</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>186.4</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    North American power</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,700</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>62.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>848</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26.7</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Global oil</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,580</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>62.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,636</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>71.3</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Leading Electronic Energy Trading Platform</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our leading electronic trading platform provides centralized and
direct access to trade execution and real-time price discovery.
We operate our OTC markets exclusively on our electronic
platform and have accelerated full transition of our futures
markets to electronic trading. Our electronic platform has
enabled us to attract significant liquidity from traditional
market participants as well as new market entrants seeking the
efficiencies and ease of execution offered by electronic
trading. We have developed a significant global presence with
approximately 4,900&nbsp;active trading screens at over
890&nbsp;OTC participant firms and over 140&nbsp;futures
participant firms as of February&nbsp;28, 2005.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Integrated Access to Futures and OTC Markets</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We attribute the growth in our business in part to our ability
to offer market participants integrated access to futures and
OTC markets. Our integrated and electronic business model allows
us to respond rapidly to our participants&#146; needs, changing
market conditions and evolving trends in the markets for energy
commodities trading. We believe that our demonstrated ability to
develop and launch new products for both the futures and OTC
markets provides us with several competitive advantages,
including:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Multi-Product Trading:</I> We operate a globally accessible
    platform that offers a seamless interface between trading in
    futures products and options on those products, as well as a
    broad range of OTC products. By offering trading in multiple
    markets and products we provide our participants with maximum
    flexibility to implement their trading and risk management
    strategies.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Multiple Access Options:</I> Our participants can access our
    marketplace through a variety of means, including through our
    Internet-based electronic trading platform, proprietary
    front-end systems, ISVs, and brokerage firms. ISVs allow market
    participants to access multiple exchanges through a single
    interface, which is integrated with the participants&#146; risk
    management systems.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Cleared and Bilateral OTC Trading:</I> In March 2002, we were
    the first market to introduce cleared OTC energy contracts. We
    believe that the introduction of cleared energy contracts in the
    OTC markets we operate has attracted new participants to our
    markets by reducing bilateral credit risk and administrative
    burdens and by improving capital efficiency. Today, our
    participants can trade bilateral and cleared contracts
    side-by-side on our platform.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Highly Scalable, Proven Technology Infrastructure</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our Internet-based electronic trading platform provides rapid
trade execution and is, we believe, one of the world&#146;s most
flexible, efficient and secure systems for commodities trading.
We have designed our platform to be highly scalable, meaning
that we can expand capacity and add new products and
functionality efficiently, at relatively low cost and without
disruption to our markets. Trades on our platform are executed
on average in 250 milliseconds, or one quarter of a second,
compared to up to a minute or more for execution of an order
through a traditional voice broker. Our platform can also be
adapted and leveraged for use in other markets, as demonstrated
by the decision of the Chicago Climate Exchange, or CCX, to
operate its emissions-trading
</DIV>

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<DIV align="left" style="font-size: 10pt;">
market on our platform. We believe that our commitment to using
technology to develop our platform will continue to contribute
to the growth and development of our business.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Transparency and Independence</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We offer market participants price transparency, meaning a
complete view of the depth and liquidity of our markets, through
our electronic platform. This is in contrast to the lack of
transparency of many open-outcry exchanges and voice-brokered
markets. All participant orders placed on our platform are
executed in the order in which they are received, ensuring that
all orders receive equal execution priority. In addition, the
transparency of our platform facilitates market regulation
through increased market visibility and the generation of
complete records of all transactions executed in our markets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In contrast to many of our competitors, our company is governed
independently and impartially and in a manner intended to
promote shareholder value and the operation of fair and
efficient markets. We believe that this governance structure
provides us with greater flexibility to launch new products and
services, and evaluate and pursue growth opportunities while
ensuring impartial treatment for our participants. In addition,
we do not participate as a principal in any trading activities,
which allows us to avoid potential conflicts of interest that
could arise from engaging in trading activities while operating
our marketplace.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Strong Value Proposition</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We believe that, by using our electronic platform, market
participants can achieve price improvement over alternate means
of trading. Electronic trade execution offers cost efficiencies
by providing firm posted prices and reducing trade-processing
errors and back office overhead, and allows us to accelerate the
introduction of new products on our platform. The combination of
electronic trade execution and integrated trading and market
data services facilitates automation by our participants of all
phases of trade execution and processing from front-office to
back-office, and ranging from trading and risk management to
settlement. In addition, in our futures business, we offer
substantially lower membership fees than those required to join
other exchanges. For example, as of March 2005, the price of
membership, or a seat, on NYMEX was $1.82&nbsp;million, while
the prevailing price of a CBOT membership was
$1.36&nbsp;million. In contrast, members of our futures exchange
are only required to pay membership fees of up to a maximum of
&#163;6,000&nbsp;per annum, or approximately $11,500.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Strong Management Team</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our management team has on average over 19&nbsp;years of
experience in the energy and financial services sectors. Our
founding management team includes Jeffrey C. Sprecher, our
chairman and chief executive officer, Charles A. Vice, our chief
operating officer, and Edwin Marcial, our chief technology
officer. We enhanced our management team with additional
noteworthy professionals, including Richard V. Spencer, our
chief financial officer, and David S. Goone, our head of
business development and sales. We later integrated the
managerial talent of Dr.&nbsp;Richard Ward, the IPE&#146;s chief
executive officer, following our acquisition of the IPE. Our
management team has successfully developed and deployed our
electronic platform, integrated the IPE into our business,
developed and launched our electronic trade confirmation system
and introduced the industry&#146;s first cleared OTC energy
contracts. We believe that the proven strength and experience of
our management team will continue to provide us with a
competitive advantage in executing our business strategy.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Our Growth Strategy</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We seek to advance our leadership position by focusing our
efforts on the following key strategies for growth:
</DIV>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    attract new market participants;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    increase connectivity to our marketplace;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    expand our market data business;</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">91
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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    develop new trading products and services;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    pursue select strategic opportunities.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Attract New Market Participants</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In recent years, our customer base has expanded and diversified
due to the emergence of new participants in the energy
commodities markets. These new participants include financial
services companies, such as investment banks, hedge funds,
proprietary trading firms and asset managers, as well as
industrial businesses that are increasingly engaging in hedging,
trading and risk management strategies. Many of these
participants have been attracted to the energy markets in part
due to the availability of electronic trading, primarily through
our platform. We intend to continue to expand our participant
base by targeting these and other new market participants and by
offering electronic trade execution and processing capabilities
that appeal to a broad range of market participants.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Increase Connectivity to Our Marketplace</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our participants may access our electronic platform for trading
in our futures markets through our own Internet-based front-end
or through the front-end systems developed by any of seven ISVs.
These represent a substantial portion of the ISVs that serve the
commodities futures markets. Furthermore, participants in our
futures markets can access our platform directly through their
own proprietary interfaces or through a number of brokerage
firms. Participants may access our OTC markets through our
Internet-based front-end or, in the case of some of our most
liquid markets, through a leading ISV. We intend to extend our
initiatives in this area by continuing to establish multiple
points of access with our existing and prospective market
participants.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Expand Our Market Data Business</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We will continue to leverage the value of the market data
derived from our trade execution, clearing and confirmation
system by developing enhancements to our existing information
services and creating new market data products. For example, in
2004, we introduced our Market Price Validation, or MPV,
service, an information service that provides a means for
subscribers to mark to market their month-end portfolios. We
also publish daily transaction-based indices for the North
American spot natural gas and power markets based on data
collected from trading activity on our platform. In addition, we
sell real-time and historical futures quotes and other futures
market data through 43 data vendors that distribute this
information, directly and through various sub-vendors, to
approximately 19,000 subscribers. We believe that the database
of information generated by our platform serves as the single
largest repository of energy market data in North America. As a
result of the breadth of our global data offerings, we believe
that we are well positioned to meet the growing demand for
increased availability of energy market data.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Develop New Trading Products and Services</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We continually develop and launch new products designed to meet
market demand and the needs of our participants. In 2004, we
launched two new electronically-traded futures contracts for
U.K. power, and we, together with the European Climate Exchange,
or ECX, plan to launch a futures contract on our platform in
2005 based on allowances issued under a government-sponsored
program designed to control and reduce greenhouse gas emissions.
During the past three years, we successfully launched over
25&nbsp;new cleared OTC contracts, and we currently plan to
introduce new products at a similar rate going forward. In
particular, we believe there is an opportunity to increase
electronic trading in oil contracts, since historically only a
small percentage of all OTC oil trades have been executed
electronically. We also intend to continue to introduce
bilateral OTC contracts in less liquid, or niche, markets to
satisfy the specific needs of our participants as they arise. We
may also seek to license our platform to other exchanges for the
operation of their market on our platform, as we have with ECX
and CCX.
</DIV>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Pursue Select Strategic Opportunities</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We intend to pursue strategic acquisitions and alliances that
will enable us to supplement our internal growth, expand our
trading products and related services, advance our technology
and take advantage of new developments in the markets for energy
commodities trading. We focus on these key evaluation criteria
when identifying and assessing potential strategic transactions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Recent Developments</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On March&nbsp;7, 2005, we announced our intention to close our
open-outcry trading floor in London, effective April&nbsp;7,
2005. Thereafter, all futures trading will be conducted
exclusively on our electronic platform. Our decision was made to
take advantage of the increasing acceptance and adoption of
electronic trading and to maintain and enhance our competitive
position in our futures markets. Since 2002, we have
progressively transitioned our futures markets to electronic
trading, and in November 2004 we closed the morning session for
floor-based trading in the IPE Brent Crude futures contract and
began offering trading in that contract during that session
exclusively on our electronic platform. The full transition of
all futures trading to our platform represents an acceleration
of our strategy to develop an integrated electronic marketplace
for side-by-side trading in both futures and OTC markets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We believe that electronic trading offers substantial benefits
to our market participants. By using our electronic platform, in
contrast to alternate means of trade execution, market
participants are able to achieve price improvement and cost
efficiencies through greater transparency and firm posted
prices, reduced trading errors and the elimination of market
intermediaries. In addition to these benefits, electronic
trading offers operational, technological and regulatory
benefits that we believe will make our markets more attractive
to market participants. For a more detailed discussion of the
advantages of electronic trading, please refer to &#147;Industry
Overview&nbsp;&#151; Industry Trends&nbsp;&#151; Growth in
Electronic Trading&#148;.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We expect to achieve cost savings ranging from $6.0&nbsp;million
to $9.0&nbsp;million per annum on an ongoing basis in connection
with our decision to close the trading floor, although in the
near term any cost savings will be offset by a charge we expect
to take primarily in the second quarter of 2005 ranging from
$6.0&nbsp;million to $8.0&nbsp;million. Furthermore, because our
electronic platform can accommodate substantially greater
trading volumes, and the cost of operating our platform is
largely fixed, we expect to benefit from increased operating
leverage in our futures business.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Our Products and Services</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We seek to provide our participants with centralized and direct
access to the futures and OTC&nbsp;markets for energy
commodities and derivatives trading as well as access to
services that support their trading activities. The primary
services we provide are electronic price discovery, trade
execution and trade processing. We also offer a broad range of
market data services for the futures and OTC markets.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Futures Trading</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We offer trading in futures contracts and options on those
contracts through our subsidiary, the IPE. These include the IPE
Brent Crude futures contract, the IPE&nbsp;Gas Oil futures
contract, the Natural Gas futures contract, UK&nbsp;Power
futures contracts, and options based on the IPE&nbsp;Brent Crude
and Gas Oil futures contracts. The IPE&nbsp;Brent Crude futures
contract is based on forward delivery of the Brent grade of
crude oil and is used as a benchmark to price a majority of the
world&#146;s traded oil products. The IPE&nbsp;Gas Oil futures
contract is a European heating oil contract and serves as a
significant pricing benchmark for refined oil products in Europe
and Asia.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our futures markets are highly regulated. As an RIE, the IPE is
responsible for carrying out certain regulatory and surveillance
functions. The IPE has its own regulatory, compliance and market
supervision functions, as well as a framework for disciplining
market participants who do not comply with exchange rules. Any
information that the IPE obtains in its regulatory capacity is
confidential. Trading in our futures markets
</DIV>

<P align="center" style="font-size: 10pt;">93
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<DIV align="left" style="font-size: 10pt;">
is segregated on our platform from our OTC markets, and access
requirements make clear the distinction between our futures and
OTC markets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We offer electronic trading in each of the products offered in
our futures markets and will offer electronic trading
exclusively in our futures business following the closure of the
open-outcry floor. The percentage of trades in our IPE Brent
Crude futures contract executed on our electronic platform
increased to an average of 26.9% of the total IPE Brent Crude
volumes traded from November&nbsp;1, 2004 through
February&nbsp;28, 2005 as the result of the introduction of an
exclusive electronic morning session on November&nbsp;1, 2004.
We provide access to trading in our futures contracts and
options on futures contracts on our electronic platform from
2:00&nbsp;a.m. on Monday until 10:00&nbsp;p.m. on Thursday, and
from 2:00&nbsp;a.m. until 8:30&nbsp;p.m. on Friday (GMT).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Electronic trading of our futures products is available to
members and their participants. The electronic membership in our
futures business runs in parallel to the membership structure
for floor trading, and is discussed in more detail under
&#147;&#151;&nbsp;Our Participant Base&nbsp;&#151; Futures
Business Participant Base&nbsp;&#151; IPE Membership&#148;.
Following the migration of our remaining open-outcry futures
trading activity to our electronic platform and the closure of
the exchange floor, our futures membership structure will
consist solely of members eligible to trade electronically.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Members may access our trading platform directly via the
Internet or an ISV. Customers of our members may obtain
order-routing access to our markets through members. Once trades
are executed on our platform, they are matched and forwarded to
a trade registration system that routes them to LCH.Clearnet for
clearing and settlement. Electronic trading allows some
participants who might traditionally have transmitted orders by
telephone to a broker to execute their orders electronically.
However, participants may also continue to use the services of a
broker.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have taken a number of steps to increase the accessibility
and connectivity of our electronic platform, including opening
our electronic platform to ISVs. Futures traders use either our
platform, or a front-end system provided by an ISV or an IPE
member for the purpose of accessing our futures markets.
ISVs&#146; systems are linked to our electronic platform via our
open application programming interfaces, or APIs. Our
participants can currently access our platform using seven ISVs.
We do not depend on the services of any one ISV for access to a
significant portion of our participant base.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have made a number of additions to the functionality of our
electronic platform in order to facilitate trading in futures
contracts, including spread functionality, which allows trades
of certain types to imply prices from one contract month to
another, and the development of administrative and monitoring
tools for use by our staff.
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>OTC Trading</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our electronic platform offers real-time access to, and
transparency of, the liquidity in our OTC markets&nbsp;&#151;
that is the complete range of bids, offers and volumes posted on
our electronic platform. Our platform displays a live ticker for
all contracts traded in our OTC markets and provides information
relating to each trade, such as the cumulative weighted average
price and transacted volumes by contract. We offer fast, secure
and anonymous trade execution services, which we believe
generally are offered at a lower cost compared with traditional
means of execution.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our electronic platform provides trade execution on the basis of
extensive, real-time price data where trades are processed
accurately, rapidly and at minimal cost. We have designed our
electronic platform to ensure the secure, high-speed flow of
data from trading desks through the various stages of trade
processing. We believe that the broad availability of real-time
OTC energy market access and data, together with the
availability of cleared OTC contracts at the same price as
bilateral products, has allowed us to achieve a critical mass of
liquidity in our OTC markets.
</DIV>

<P align="center" style="font-size: 10pt;">94

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<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following diagram illustrates the processing of an OTC trade
from order entry to recording in a company&#146;s risk
management system. This process typically occurs within a matter
of seconds.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<IMG src="y06540y0654008.gif" alt="(FLOW CHART)">
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I>OTC Products Overview.</I></B> We offer market
participants a wide selection of derivative contracts, as well
as contracts for physical delivery of commodities, to satisfy
their trading objectives, whether they relate to risk
management, asset allocation, physical consumption or
production, speculation or arbitrage. We offer trading in over
13,600 unique contracts as a result of the availability of
various combinations of products, locations and
strips&nbsp;&#151; meaning the duration or settlement date of
the contract. Excluding the strip element, over 740 unique
contracts based on products and hub locations were traded in our
OTC market in 2004. A substantial portion of the trading volume
in our OTC markets relates to approximately 15-20&nbsp;highly
liquid contracts in natural gas, power and oil. For these
contracts, the highest degree of market liquidity resides in the
prompt, or front month, contracts, whereas that liquidity is
reduced for contracts with settlement dates further out, or the
&#147;back months&#148;.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, we offer trading in a wide range of complementary
niche contracts. The scalability and flexible structure of our
electronic trading platform makes the introduction of these
contracts quick, efficient and relatively low cost. Our platform
also allows us to offer the high degree of customization that
the OTC participant demands to satisfy requirements and
preferences.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We characterize the range of instruments that participants may
trade in our markets in this prospectus by reference to type of
commodity (such as global oil, North American power, North
American gas, etc.), products (such as forwards and swaps,
differentials and spreads, and OTC options) and contracts
(meaning products specified by delivery dates). For a discussion
of these instruments generally, see &#147;Industry
Overview&#148;. The OTC products available for trading in our
markets fall into the following general contract types:
</DIV>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Forwards and Swaps:</I> We offer forward contracts on
    products in the following commodities: North American power,
    European power and global precious metals. We offer swaps in the
    following commodities: global oil, North American power, North
    American gas, European gas and European power.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Differentials and Spreads:</I> We offer basis trades in
    various natural gas markets, such as the Chicago pipeline basis
    swap (settled against the NGI index). We offer spreads in the
    following commodities markets: global oil, and North American
    natural gas and power.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>OTC Options: </I>We offer options on contracts in the
    following commodities: oil and North American gas.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">95

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table indicates the number of unique commodities,
products and contracts traded in our OTC business for the
periods presented:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="71%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Year Ended December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2002</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Commodities markets traded(1)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Products traded</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>742</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>721</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>731</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Contracts traded</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,654</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,812</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23,669</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    There is currently little to no liquidity in the commodities
    markets for physical global oil, physical and financial North
    American coal, North American emissions, North American weather
    and physical and financial North American natural gas liquids on
    our platform.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I>Cleared OTC Contracts.</I></B> We developed the concept of
cleared OTC energy contracts, which provide participants with
access to centralized clearing and settlement arrangements
through LCH.Clearnet. We launched the first cleared OTC natural
gas and oil contracts in March 2002 and our first cleared OTC
power contracts in November 2003. As of February 2005, we listed
7 cleared natural gas contracts, 15 cleared power contracts and
5 cleared oil contracts, all of which are financially settled.
Transaction fees derived from trade execution in cleared OTC
contracts represented 44.5% of our total OTC revenues in 2004,
net of intersegment fees.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<IMG src="y06540y0654009.gif" alt="(GRAPHIC)">
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The introduction of cleared OTC contracts has reduced the amount
of capital our participants are required to post on each OTC
trade, as well as the resources required to enter into multiple
negotiated bilateral settlement agreements to enable trading
with other counterparties. In addition, the availability of
clearing through LCH.Clearnet for both OTC and futures contracts
traded in our markets enables our participants to cross-margin
their futures and OTC positions&nbsp;&#151; meaning that a
participant&#146;s position in its futures or OTC trades can be
offset against each other, thereby reducing the total amount of
capital the participant must deposit with the FCM clearing
member of LCH.Clearnet.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
OTC contracts are available for trading on the same screen and
are traded in the same price stream, and are charged the same
commission rate, as bilaterally traded contracts. In a cleared
OTC transaction, LCH.Clearnet acts as the counterparty for each
side to the trade, thereby reducing counterparty credit risk in
the traditional principal-to-principal OTC markets. However,
participants to cleared trades also pay a clearing fee directly
to LCH.Clearnet and to an FCM. There are currently 24 FCMs
clearing transactions for approximately 960 screens active in
our cleared OTC markets. Participants have the option to trade
on a
</DIV>

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bilateral basis with the counterparty to avoid paying fees to
LCH.Clearnet and an FCM subject to the availability of bilateral
credit with the counterparty. While we derive no revenue
directly from providing access to these clearing services, we
believe the availability of clearing services and attendant
improved capital efficiency has attracted new participants to
the markets for energy commodities trading.
</DIV>

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We extended the availability of our cleared OTC contracts to
voice brokers in our industry through our block trading
facility, which was launched in March 2004. Block trades are
those trades executed in the voice broker market, typically over
the telephone, and then transmitted to us electronically for
clearing. We charge 50% of our standard commission fee for block
trades. We believe that our block trading facility is a growing
part of our cleared business as it serves to expand our open
interest. As of February&nbsp;28, 2005, open interest in our
cleared OTC contracts was 1.3&nbsp;million contracts in North
American natural gas and power and global oil. Open interest
refers to the total number of contracts that are currently
open&nbsp;&#151; in other words, contracts that have been traded
but not yet liquidated by either an offsetting trade, exercise,
expiration or assignment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following tables present:
</DIV>

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    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
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    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the number of cleared OTC Henry Hub natural gas contracts traded
    for the periods presented on our electronic platform compared
    with NYMEX-ClearPort; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the number of cleared PJM financial power contracts traded for
    the periods presented on our electronic platform compared with
    NYMEX-ClearPort.</TD>
</TR>

</TABLE>

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    <TD width="50%"></TD>
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    <TD align="left"><IMG src="y06540y0654010.gif" alt="(GRAPHIC)"></TD>
    <TD align="right"><IMG src="y06540y0654011.gif" alt="(GRAPHIC)"></TD>
</TR>

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    <TD width="97%"></TD>
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    <TD></TD>
    <TD>
    <B><I>OTC Trade Execution Services</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We offer a broad range of automated OTC trade execution
services, including straight-through trade processing, risk
management functionality and electronic trade confirmation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I>Automated Trade Execution Services&nbsp;&#151;
Straight-Through Trade Processing.</I></B> Our electronic
platform offers the following features:
</DIV>

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    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Viewing Live Markets: </I>Traders may view all live, firm
    quotes posted by other traders in our markets. These quotes are
    arranged on the screen first by price and then, if two quotes
    are posted at the same price, by their time of entry. All
    participants are able to view the same market information,
    although individual participants may also customize the
    presentation of this information.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Counterparty Credit Screening: </I>Quotes visible to a
    participant&#146;s traders on the screen are color-coded. One
    color indicates that quotes have originated from parties other
    than that participant. Another color indicates whether or not
    particular quotes meet the credit criteria established by the
    participant&#146;s risk management personnel.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Instant Messaging: </I>Our instant messaging service allows
    participants to communicate directly with others in our markets
    on a secure, anonymous and real-time basis. For example,
    participants may use instant messaging to seek additional
    capacity from a party offering a product that they need.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Simple Click Execution: </I>Traders may act on a bid or an
    offer with one or more clicks of a mouse or use of a shortcut
    key programmable set-up. Our electronic platform also
    facilitates the implementation</TD>
</TR>

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    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

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    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left">
    of sophisticated, multi-target trading techniques. Traders may
    sweep the market, or conduct a broad yet targeted search, for
    quotes of a certain price or quantity. This enables them to act
    on multiple bids or offers at one time. In addition, traders may
    link two orders, arranging, for example, to cancel a second
    order automatically when the first is executed.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Order Matching: </I>Once an order is placed by a
    participant&#146;s trader, it is automatically matched with a
    quote meeting the participant&#146;s credit criteria at the best
    available price. If there are two quotes at the same price,
    priority goes to the one that was entered first. Orders are
    matched on an anonymous basis.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Application Programming Interfaces: </I>Our application
    programming interfaces, or APIs, allow participants to build
    their own customized front office trading systems, which can be
    linked to our platform, thereby enabling high speed data flow to
    their trading desk and back through to their risk management,
    settlement and accounting systems.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Automated Spreadsheet Trading:</I> Participants may send
    orders to, and execute trades on, our platform using their own
    proprietary formulas and strategies without the use of our APIs
    or any code level programming.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Trade Reporting: </I>A confirmation is automatically
    transmitted to each party to a trade. Traders may elect to have
    these confirmations automatically printed. They may also elect
    to send the confirmations automatically to a computer file,
    enabling direct, paperless communication between a
    participant&#146;s front and back offices.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Order Monitoring and Deal Surveys:</I> Traders are able to
    monitor and manage the status of all bids and offers that they
    have entered on our platform. Traders and others at a
    participant company are also able to view and print
    comprehensive survey reports of trades executed by a trader or
    by all traders within their company. This facilitates
    communication between a participant&#146;s front and mid-offices.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Electronic Invoicing: </I>Our platform generates electronic
    invoices detailing the fees and trading commissions due from
    each participant. Participants can choose to view and receive
    invoice data at any time of the month. This reduces paper
    handling and the risk of human error. It also affords our
    participants greater flexibility in storing and using this
    information and promotes greater back office efficiency.</TD>
</TR>

</TABLE>

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<B><I>Electronic Trade Confirmation Services.</I></B> Our
electronic trade confirmation system is accessible through our
website or through our APIs and offers market participants a
reliable, low-cost automated alternative to manual trade
verification and confirmation. When trading on a traditional
exchange or through OTC voice brokers, market participants
typically manually prepare and exchange paper confirmations
evidencing a trade following execution in order to create a
legal record of the trade. Both participants and third parties
may use this service to confirm trades in products commonly
traded in the energy and metals markets. Our electronic trade
confirmation service accepts data from trades executed on our
platform, through other exchanges or trading facilities or
through OTC voice brokers.
</DIV>

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We believe that this process tends to result in increased back
office costs, delay and risk of human error. Our electronic
trade confirmation service reviews electronic trade data
received from individual traders, screens and matches this data
electronically, then highlights any discrepancies in a report to
the traders&#146; respective back offices. This allows back
office personnel to focus primarily on those trades that require
correction and verification, rather than also reviewing the
larger percentage of trades without discrepancies. If
discrepancies arise, they may be resolved between the
counterparties, after which an electronic confirmation of the
trade is issued. Where no discrepancies are reported, use of
this service eliminates the need for telephonic verification of
trade data. Participants using this service may elect to use
this confirmation as the official record of the transaction in
place of the fax or telex traditionally generated by
participants&#146; back offices.
</DIV>

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We believe that the convenience and cost savings offered by our
electronic trade confirmation service could attract new
participants to our platform, increasing the revenues that we
derive from transaction fees.
</DIV>

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<B><I>OTC Risk Management Functionality.</I></B> One of the
features of our platform is its risk management functionality.
Trades in the OTC commodities markets have historically been
executed as bilateral contracts in
</DIV>

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which each counterparty bears the credit and/or delivery risk of
the other and typically requires that an existing bilateral
Master Agreement be in place with the other counterparty.
Participants may pre-approve trading counterparties and
establish parameters for trading with each counterparty in
advance of doing so, thereby enforcing internal risk management
policies. Participants may set firm-wide limits on tenor
(duration) and the total daily value of trades that its traders
may conduct with a particular counterparty, in a particular
market. In addition, participants are offered a limited view of
the parameters established for that participant by other market
participants and may negotiate in real-time with potential
counterparties through our instant messaging service. We do not
assess the creditworthiness of, or determine trading parameters
for, any participant that trades on our platform and we do not
derive revenues directly from our credit management tools.
</DIV>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
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    <TD></TD>
    <TD>
    <B><I>OTC and Futures Market Data</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The 10x Group, or 10x, is our market data subsidiary. We
established 10x in 2002 in response to growing demand for
objective, transparent and verifiable energy market data.
Through 10x, we generate market information and indices based
solely upon auditable transaction data derived from data on
actual OTC trades executed in our markets. Therefore, this
information is not affected by subjective estimation or
selective polling, the methodologies that currently prevail in
the OTC markets. Each trading day, we deliver proprietary energy
market data directly from our OTC market to the desktops of
thousands of market participants. More specifically, we offer
the following data products and services:
</DIV>

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    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>ICE Daily Indices:</I> 10x publishes ICE Daily Indices for
    our spot natural gas and power markets with respect to over 60
    of the most active gas hubs and 15 of the most active power hubs
    in North America. These indices are calculated based on the
    volume-weighted average price at each delivery point of all
    qualifying trades executed on our platform in accordance with
    guidelines we have set to provide for transparency in our index
    methodology. In contrast to other survey-based indices, all
    trades included in our indices can be observed by our
    participants, including regulators, as they occur. The ability
    to view the real-time creation of market indices encourages the
    use of the platform for trade execution for inclusion in the
    indices. 10x was recently recognized by FERC as the only
    publisher of natural gas and power indices to fully comply with
    all of the natural gas and power index publishing standards
    identified in the FERC Policy Statement on Price Indices. 10x
    transmits the ICE Daily Indices via e-mail to 7,500 energy
    industry participants on a complimentary basis each trading day.
    In the future, we may begin charging recipients for what we
    believe is increasingly valuable data.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>View Only:</I> We offer view only access to market
    participants who are not active traders, but who still require
    access to real-time prices of physical and financial energy
    derivative contracts. Typical view only access subscribers
    include marketers, industrial end-users, utilities, analysts,
    municipalities and regulatory agencies.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>End of Day Report:</I> The 10x End of Day Report, or EOD
    Report, is a comprehensive electronic summary of trading
    activity in our OTC markets. The report is published daily at
    3:00&nbsp;p.m. EST and features indicative price statistics,
    such as last price, high price, low price, total volume, volume
    weighted average price, best bid, best offer, closing bid and
    closing offer, for all natural gas and power contracts that are
    traded or quoted on our platform. The EOD Report also provides a
    summary of every transaction, which includes the price, the
    timestamp and an indication of whether a bid was hit or an offer
    was lifted.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Market Price Validation Service:</I> 10x Market Price
    Validation service, or MPV, provides independent, consensus
    forward curve and option values for long-dated (5-20&nbsp;years)
    global energy contracts on a monthly basis. On the last business
    day of each month, MPV participant companies, representing the
    world&#146;s largest energy commodities trading entities, submit
    their month-end forward curve and option prices for over 200
    widely held global energy contracts, such as Henry Hub Natural
    Gas, Brent Crude, AECO Gas Basis, WTI Crude, Cinergy Peak Power
    and SP-15 Peak Power. We audit and average these submissions to
    create consensus forward curve and option values that are then
    published for the benefit of MPV participants. MPV participants
    use these consensus values to validate internal forward curves
    and mark-to-market their month-end portfolios in accordance with
    FASB and IAS recommendations concerning the treatment and
    valuation of energy derivative contracts.</TD>
</TR>

</TABLE>

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We also sell real-time and historical futures quotes and other
futures market data derived from trading in our futures markets
through 43 data vendors. These vendors in turn distribute this
information, directly and through various sub-vendors, to
approximately 19,000 subscriber terminals. These vendors and
sub-vendors include Bloomberg, Reuters and Comstock. Through the
IPE&#146;s website, data related to our futures markets is also
available to subscribers of our EnergyLive service, and
historical market data is also available to subscribers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our operations generate an increasingly broad range of market
data, which we distribute on a real-time and historical basis.
In view of the automated way in which our electronic platform
gathers data from actual transactions, we believe that our data
is more precise, comprehensive and unbiased than most existing
sources of OTC commodities data. Subject to confidentiality
provisions, we generally retain all trade data collected through
our trade-execution, electronic trade confirmation and clearing
services. We believe that market participants value the depth
and precision of our market data and that this value is likely
to increase if our liquidity continues to grow. We are currently
exploring ways to realize the value of this raw data. We believe
our electronic platform comprises the single largest repository
in the world for energy commodities market data.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Our Participant Base</B>
</DIV>

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    <TD></TD>
    <TD>
    <B><I>Futures Business Participant Base</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Participants currently trade in our futures markets, either
directly as members or through a member. The participant base in
our futures business is globally dispersed, although we believe
a significant proportion of our participants are concentrated in
major financial centers in North America, the United Kingdom,
Continental Europe and Asia. We have obtained regulatory
clearance or received legal advice confirming that there is no
legal or regulatory impediment for the location of screens for
electronic trading in our futures markets in 28&nbsp;countries,
including the United States, Singapore, Japan and most of the
member countries of the European Union. Memberships in our
futures markets increased by 13.0% in 2004 in response to the
addition of exclusive electronic trading hours and demand for an
electronically traded crude oil benchmark, our IPE Brent Crude
futures contract.
</DIV>

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Like our OTC participant base, our participant base in our
futures business has grown significantly since we acquired the
IPE in 2001. The five most active clearing members of the IPE,
which handle cleared trades for their own accounts and on behalf
of their participants, accounted for 39.5%, 39.1% and 38.4% of
our futures business revenues, net of intersegment fees, in
2004, 2003 and 2002, respectively. One member accounted for
13.0%, 15.1% and 13.4% of our futures business revenues, net of
intersegment fees, in 2004, 2003 and 2002, respectively. No
other member accounted for more than 10% of our futures business
revenues for that period.
</DIV>

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<B><I>IPE Membership.</I></B> Trades in our futures markets may
only be executed in the name of an IPE member for its own or
others&#146; accounts. Although we announced recently that we
will close our open-outcry trading floor, we currently maintain
parallel membership structures with respect to the simultaneous
operation of the physical exchange floor and our electronic
platform for trading in our futures markets. In order to become
an IPE member, an applicant must complete an application form,
undergo a due diligence review and execute an agreement stating
that it agrees to be bound by IPE regulations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Members trading on the exchange floor fall into two categories:
floor members and local floor members. Floor members may trade
on the exchange floor on behalf of both members and non-members,
so long as the member firm is authorized by the FSA. Local
members may trade only for their own account or for the accounts
of other local or floor members. Participants who are members of
LCH.Clearnet may clear trades. Only floor members may clear
trades in their own name. Any member that does not clear its own
business must have a clearing arrangement with a member who is a
member of LCH.Clearnet and is able to clear trades.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
All futures trades executed on our electronic platform are
overseen by or attributable to &#147;responsible
individuals&#148;, or RIs. Each electronic member may register
one or more RIs, who are responsible for trading activities of
both the member and its customers, and who are accountable to
the IPE for the conduct of trades executed in the member&#146;s
name. There are currently 650&nbsp;RIs registered in our futures
market.
</DIV>

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    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>OTC Business Participant Base</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our OTC participants include some of the world&#146;s largest
energy companies, financial institutions and other active
contributors to trading volume in global commodities markets.
They include oil and gas producers and refiners, power stations
and utilities, chemical companies, transportation companies,
banks, hedge funds and other energy industry participants. Our
participant base is global in breadth, with traders located in
22&nbsp;countries. The five most active trading participants
together accounted for 21.4%, 25.1% and 38.1% of revenues
derived from our OTC business for 2004, 2003 and 2002,
respectively. Revenues from one participant that is active in
the OTC&nbsp;North American natural gas and power commodities
market accounted for 14.2% of revenues derived from our OTC
business for 2002. No participant accounted for more than 10% of
our OTC business revenues during 2004 or 2003.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Trading in our OTC markets is not restricted to members, as with
a traditional exchange. Rather, we generally accept as a
participant any party that qualifies as an exempt commercial
entity, or ECE. ECEs must satisfy certain asset-holding and
other criteria and include entities that, in connection with
their business, incur risks relating to a particular commodity
or have a demonstrable ability to make or take delivery of that
commodity, as well as financial institutions that provide
risk-management or hedging services to those entities. In
January 2003, we received approval from the CFTC that allows
registered traders and locals with floor or electronic trading
privileges on any regulated U.S.&nbsp;futures exchange to
qualify as ECEs and therefore to execute OTC transactions on our
platform. We also received approval in October 2004 from the
CFTC permitting the IPE&#146;s registered brokers and local
traders to transact in the OTC markets for their own accounts.
This has allowed IPE members and traders access to both the
futures markets and the OTC markets on one screen.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We require each participant to execute a participant agreement,
which governs the terms and conditions of our relationship with
each participant and grants the participant a non-exclusive,
non-transferable, revocable license to access our platform.
While, we generally establish the same contractual terms for all
of our users, in connection with our entry into new commodities
markets, we have from time to time agreed to minor modifications
to the terms of our participant agreement for trading in new
products. We expect that any future services that we may
introduce will also be covered by our participant agreement, as
we generally have a unilateral right to amend its terms with
advance notice. As the OTC markets mature and conventions
change, our participant agreement provides us with considerable
flexibility to manage our relationship with our participants on
an ongoing basis.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The data in the table below reflects the growth of our OTC
business participant base. This table indicates (i)&nbsp;the
total number of participants that have signed participant
agreements with us through the end of the periods presented,
(ii)&nbsp;the number of participants who have actually traded
during the periods presented, and (iii)&nbsp;the number of
desktop screens which logged onto our platform during the month
of December 2004. We believe that there are two main reasons why
some participants access our platform but do not participate in
trading. First, after participants register to use our
electronic platform, they cannot trade until they have
established either a clearing account or bilateral credit with
other participants. Second, we believe that some non-trading
participants use our platform to gain real-time, comprehensive
information regarding the commodities markets as well as to gain
reliable, accurate and full price discovery in these markets. We
regard these non-trading users of our platform as a valuable
potential source of revenues for our business both because such
users may choose to subscribe to other of our market data
services and because such users may in the future trade on our
platform.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 3pt; ">

<TR style="font-size: 1pt;">
    <TD width="72%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>As of and for the Year</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Ended December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2002</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    All participant firms (end of year)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>861</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>774</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>776</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Trading participant firms (end of year)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>661</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>589</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>671</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    View Only participant firms (end of year)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>185</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>105</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Participant firms that executed a trade during the year</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>539</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>487</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>442</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Active screen/user&nbsp;ID&#146;s (end of year)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,812</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,575</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,228</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;">101

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left" style="font-size: 10pt; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Product Development</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We leverage both our technology infrastructure and software
development capabilities to diversify our products and services.
We are continually developing, evaluating and testing new
products for introduction in our futures and OTC businesses. Our
goal is to create innovative solutions in anticipation of, or in
response to, changing conditions in the markets for energy
commodities trading to better serve our expanding participant
base. We also seek to leverage our existing product base by
developing new applications for their use. In support of our
product development goals, we rely on the input of our product
development, clearing, technology and sales teams, who we
believe are positioned to discern and anticipate our
participants&#146; needs. Where appropriate, we seek to protect
our intellectual property through patents and other forms of
intellectual property protection.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In the second half of 2005, we plan to introduce trading in
futures and spot contracts linked to E.U. Emissions Allowances
issued under the European Union&#146;s mandatory Emissions
Trading Scheme. These contracts will be offered in conjunction
with the European Climate Exchange, a subsidiary of CCX.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
While we have historically developed all of our products and
services internally, we also periodically evaluate our strategic
relationships to try to identify whether any opportunities to
develop meaningful new products and services exist in
conjunction with third parties. If we believe our success will
be enhanced by collaboration with a third party, we will enter
into a licensing arrangement or other strategic relationship.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Technology</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Technology is a key component of our overall strategy, and we
regard it as crucial to our success. Our operation of electronic
trading facilities for both futures and OTC markets has
influenced the design and implementation of the technologies
that support our operations. We currently employ a team of over
68&nbsp;experienced technology specialists, including project
managers, system architects, software developers, performance
engineers, systems and quality analysts, database administrators
and website designers. We have established a track record of
operating a successful electronic trading platform by developing
and integrating multiple, evolving technologies that support
substantial trading volume. The integrated suite of technologies
that we employ has been designed to support a significant
expansion of our current business and provides us with the
ability to leverage our technology base into new markets and to
develop new products and services rapidly and reliably.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As trading activity has increased, we have continued to improve
matching engine performance and to add functionality as
appropriate as we make available to our participants trading in
new markets and product types. We have adopted a modular
approach to technology development and have engineered an
integrated set of solutions that support multiple specialized
markets. Significant investments in production planning, quality
assurance and certification processes have enhanced our ability
to expedite the delivery of the system enhancements that we
develop for our participants. Our electronic platform is
accessible from anywhere in the world via the Internet. We also
develop and operate other software components used to support
mid and back office services such as clearing, market data and
electronic confirmations. Our clearing infrastructure is
designed to be easily extendable to support integration with
additional clearing interfaces. We currently support clearing
integration to LCH.Clearnet, as well as to The Clearing
Corporation for the purposes of clearing and settling CCX
markets as part of our provision of services to CCX.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Speed, reliability, scalability, and capacity are critical
performance criteria for electronic trading platforms. Our
electronic platform was designed from the outset to be highly
scalable, enabling us to meet anticipated user growth as demand
increases. Currently, the average trading transaction time is
approximately 250&nbsp;milliseconds, or one-quarter of a second.
A substantial portion of our operating budget is dedicated to
system design, development and operations in order to achieve
high levels of overall system performance. We continually
monitor and upgrade our capacity requirements and have
configured our systems to handle approximately twice our peak
transactions in our highest volume products. Approximately 3,200
participants currently access our platform simultaneously during
peak hours. We believe our electronic platform, which is
currently configured to support more than 5,000 simultaneous
users, will be sufficient to meet anticipated demand for the
foreseeable future.
</DIV>

<P align="center" style="font-size: 10pt;">102

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The technology systems supporting our trading operations can be
divided into four major categories:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="49%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="48%">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <I>Distribution</I></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Technologies that support the ability of our participants to
    access our marketplace via the Internet or a direct connection
    to our platform.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <I>Front-end functionality</I></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Technologies that provide a robust graphical user interface, or
    GUI, APIs, and enable the delivery of other front-end tools.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <I>Electronic trade matching</I></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Technologies that aggregate orders and match buy and sell orders
    when their trade conditions are met.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <I>Security and redundancy</I></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Technologies that maximize and maintain the security of our
    markets, as well as provide for the transition to a redundant
    operating environment in the case of system failure caused by
    internal or external events.</TD>
</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Distribution</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The accessibility of our platform via the Internet
differentiates our markets and serves to attract liquidity and
trading volume to our markets. As of February&nbsp;28, 2005,
approximately 4,900&nbsp;participants have active connections
directly to our platform, with further connections available
through seven ISVs. Most of these participants access our
electronic platform through high-speed Internet connections,
which are readily available and widely distributed throughout
North America, Europe and Asia. Over the past two years, as part
of our efforts to provide additional access choices to
participants, we implemented a program to connect conforming
ISVs to our platform. As a result, we now have the potential to
attract thousands of additional potential participants to our
platform through these ISVs.
</DIV>

<DIV style="margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Front-End Functionality</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We provide secure access to our electronic platform via a GUI
known as WebICE. The WebICE GUI serves as a customizable,
feature rich front-end to our platform. Participants can access
our platform globally via the Internet by clicking on a link on
our website. Our platform can be accessed using a number of
operating systems, including Microsoft Windows 2000/XP, Linux
and Mac OS.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We selectively offer our participants use of APIs that allow
users to create customized applications and services around our
electronic platform to suit their specific needs. Participants
using APIs are able to link their internal computer systems to
our platform and enable high-speed data flow to their front
office trading systems, as well as their risk management, data
feed, settlement, and accounting systems. Our APIs also enable
ISVs to adapt their products to our platform, thereby offering
our participants a wide variety of front-end choices in addition
to our own user interface.
</DIV>

<DIV style="margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Electronic Trade Matching</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Order matching constitutes the core of our electronic platform.
Our platform supports functionality for trading in bilateral
OTC, cleared OTC and futures and options contracts. Our core
functionality is available on a single platform for all of the
products that we offer, rendering it highly flexible and
relatively easy to maintain. As a result, enhancements made for
one product are also easily made for other products. Our order
matching functionality is designed based on a combination of
internal and external software and technology. Clustered Windows
2000 and Linux messaging servers act as a communications gateway
for our participants. Large scale enterprise servers provide the
processing capacity for the matching engine which captures price
requests by our participants and matches trades instantaneously
based on the order and price at which trades were entered.
</DIV>

<P align="center" style="font-size: 10pt;">103

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<DIV style="margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Security and Disaster Recovery</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Physical and digital security are each critical to the operation
of our platform. At both our corporate offices as well as at all
of our data centers, physical access controls have been
instituted to restrict access to sensitive areas. We also employ
what we believe are state-of-the-art digital security technology
and processes, including high level encryption technology,
complex passwords, multiple firewalls, network level virus
detection, intrusion detection systems and secured servers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We use a multi-tiered firewall scheme to control access to our
network. We have also incorporated several protective features
into our electronic platform at the application layers to ensure
the integrity of participant data and connectivity. For example,
we use access control profiles to prevent a given participant
from accessing data affiliated with another participant. We are
also able to restrict the functions that a particular user can
perform with any company data within a given application. Our
electronic platform monitors the connection with each user
connected to the platform. If a connection to a particular
participant can no longer be detected, certain outstanding
orders entered by that participant are automatically withdrawn
and held at the exchange. Users have the option to allow orders
to remain in the market after logging out or disconnecting from
our platform. In addition, even though our electronic platform
is globally accessible over the Internet, we are able to
restrict platform access to designated IP addresses, if so
desired by a participant.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In July 2002, we established a remote data center to provide a
point of redundancy for our trading technology. Our back-up
facility fully replicates our primary data center and is
designed to ensure the uninterrupted operation of our electronic
platform&#146;s functionality in the face of external threats,
unforeseen disasters or internal failures. In the event of an
emergency, participants connecting to our electronic platform
would be rerouted automatically to the back-up facility. Our
primary data center continuously collects and saves all trade
information and periodically transmits it to our back-up
facility. For that reason, we expect that our disaster recovery
system would have current, and in most cases real-time,
information in the event of a platform outage. In the event that
we were required to complete a changeover to our back-up
disaster facility, we anticipate that our platform would
experience approximately 60&nbsp;minutes of down time.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have received third-party assurances regarding the adequacy
and effectiveness of controls surrounding the platform&#146;s
operations and security. The examination, a Statement on
Auditing Standards No.&nbsp;70 (SAS&nbsp;70) Type&nbsp;II,
covers our trading platform and eConfirm trade confirmation
service. The SAS 70 examination standard was established by the
American Institute of Certified Public Accountants and is
internationally recognized as an in-depth examination of a
company&#146;s description of controls, their suitability of
design, and their operating effectiveness, which generally
include controls over information technology and processes. The
most recent Type&nbsp;II examination was performed by
PricewaterhouseCoopers LLP (to whom we outsource our internal
audit functions) and required the testing of our controls for
the period from April&nbsp;1, 2004 through September&nbsp;30,
2004. We also performed a Type&nbsp;II examination in 2003 and a
Type&nbsp;I and Type&nbsp;II examination in 2002, all of which
were performed by our independent registered public accounting
firm, Ernst&nbsp;&#38; Young LLP.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The SAS 70 Type&nbsp;II examinations required testing of our
controls to provide reasonable assurance that system security
and other stated control objectives were satisfied. The subject
of the examination was our system and software controls,
including computer equipment, storage media, internal
documentation, physical and environmental protection measures,
and access to systems and data. In addition to reviewing
physical and logical security, the examination covered critical
management functions and procedures.
</DIV>

<DIV style="margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Support Services</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
All of our participants have access via e-mail and telephone to
our specialized help desk, which provides support with respect
to general technical, business and administrative questions, and
is staffed 24&nbsp;hours a day from Sunday at 6:00&nbsp;p.m.
until Friday at 6:00&nbsp;p.m. At all other times, support
personnel are available to assist our participants via mobile
phone and e-mail. We utilize a third party system that tracks
inbound calls and e-mails to centralize issue reporting and
resolution tracking. Each week a summary of reported issues is
compiled and sent to operations management for review. In
addition, our participants may access training materials and
user guides which are available on our website.
</DIV>

<P align="center" style="font-size: 10pt;">104

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Technology Partners, Vendors and Suppliers</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We maintain relationships with a range of technology partners,
vendors and suppliers in respect of clearing services, software
licensing, server leases, hosting facilities and electronic
trade routing.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If any of our contracts with our key technology partners, vendor
or suppliers were terminated, we believe that we would be able
to gain access on a timely basis to products and services of
comparable quality, on comparable terms.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Internally Developed Software</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The current focus of our internal software development is in the
following areas:
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    enhancement of our existing platform to increase connectivity,
    functionality and performance in support of our plan to increase
    trading volumes in our markets and for the development of new
    products;</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    development of functional enhancements and performance
    improvements to our electronic trade confirmation
    service;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    development of technology infrastructure to support the emerging
    data sales component of our OTC business.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Competition</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The markets in which we operate are highly competitive and we
expect competition to intensify in the future. We face
competition in all aspects of our business from a number of
different enterprises, both domestic and international,
including electronic platforms, traditional exchanges and voice
brokers. We compete on the basis of a number of factors,
including:
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    depth and liquidity of markets;</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    price transparency;</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    reliability and speed of trade execution and processing;</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    technological capabilities and innovation;</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    breadth of product range;</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    rate and quality of new product developments;</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    quality of service;</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    connectivity;</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    mid- and back- office service offerings, including
    differentiated and value-added services;</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    transaction costs;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    reputation.</TD>
</TR>

</TABLE>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Our Principal Competitors</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Currently, our principal competitor is NYMEX. NYMEX is a
predominantly open-outcry commodities exchange for the trading
of energy futures contracts and options on futures contracts.
Among its primary products, NYMEX offers trading in its WTI
light sweet crude oil futures contract NYMEX has recently
developed a number of initiatives that compete with us, directly
or indirectly, including the following:
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    NYMEX has launched an open-outcry futures exchange located in
    Dublin, Ireland for the trading of a competing Brent Crude
    futures contract. According to NYMEX, this launch was a direct
    response to our decision to reduce the open-outcry trading hours
    for our IPE Brent Crude futures contract starting on
    November&nbsp;1, 2004. As of February&nbsp;28, 2005, open
    interest in the NYMEX Brent Crude futures contract was 15,893
    contracts, and during the month of February 2005, 30,716
    contracts were traded. This compares with open interest of
    351,673 contracts in respect of our IPE Brent Crude futures
    contract as of February&nbsp;28, 2005 and traded volume in the
    month of February 2005 of 1,986,936&nbsp;contracts.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">105

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<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    NYMEX has announced its intention to establish a London-based
    open-outcry futures exchange during 2005 that would replace its
    Dublin operations and compete directly with our futures
    business. If NYMEX opens a London floor, it may expand its
    product offering beyond Brent Crude futures contracts to Brent
    options contracts and Gas Oil futures contracts and options on
    futures contracts, thereby directly competing with most of the
    IPE&#146;s products.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    NYMEX amended its rules to permit traders on NYMEX to close
    positions in the IPE Brent Crude futures contract and
    simultaneously establish new positions in the NYMEX Brent Crude
    futures contract, without using either exchange&#146;s floor or
    electronic trading system. This effectively allows traders to
    transfer positions from us to NYMEX through a block transaction,
    which may promote the use of the NYMEX Brent Crude futures
    contract and increase the level of open interest in that
    contract to the detriment of open interest in the IPE Brent
    Crude futures contract.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    NYMEX established its NYMEX Access electronic trading platform
    for futures in 1983. Since May 2002, NYMEX has been offering
    clearing services for OTC&nbsp;contracts via a facility known as
    ClearPort since May 2002. While these contracts are ultimately
    converted to futures contracts, they were termed by NYMEX at the
    time of their introduction to be &#147;OTC products&#148; and
    are blocked into NYMEX by voice brokers. The availability of
    these contracts has reduced reliance on floor-based execution
    and has strengthened the competitive position of voice brokers.
    NYMEX has listed over 100&nbsp;contracts available for clearing
    through ClearPort.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, we currently compete with:
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    voice brokers active in the commodities markets, including
    Amerex, ICAP, Prebon Yamane and Tradition (North America);</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    other electronic trading energy platforms, such as NGX (a
    subsidiary of the Toronto Stock Exchange), HoustonStreet and
    Bloomberg PowerMatch;</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    energy futures exchanges, such as European Energy Derivatives
    Exchange, or Endex (formerly known as Amsterdam Power Exchange),
    and Powernext; and</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    market data vendors, such as Bloomberg, Reuters, Argus and
    Platts (a division of The McGraw-Hill Companies Inc.).</TD>
</TR>

</TABLE>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Competition with Our Futures Business</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In our futures business, we currently compete with NYMEX and
European natural gas and power exchanges. In the United States,
NYMEX lists the WTI crude oil futures contract, which competes
with the IPE Brent Crude futures contract as a benchmark for
worldwide trading in crude oil futures. There are also several
electronic exchanges in Europe that may, in the future, offer
trading in contracts that compete with ours. For example, both
CME and Euronext have stated publicly that they intend to enter
the markets for energy commodities trading.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, the recent consolidation of, and development of
alliances between, European exchanges and clearinghouses has
resulted in increasingly large and well-capitalized trading
services providers. For example, in January 2004 the London
Clearing House merged with Clearnet SA. Continued consolidation
among trading services providers would likely require us to
compete in both our futures and OTC businesses against a smaller
number of firms with considerable resources and significant
market shares.
</DIV>

<DIV style="margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Competition with Our OTC Business</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Other financial services or technology companies, in addition to
those named above, have entered the OTC electronic trading
services market. Additional joint ventures and consortia are
forming, or have been formed, to provide services similar to
those that we provide. Others may acquire the capacity to
compete with us through acquisitions. In particular, we expect
that existing, well-capitalized participants in the electronic
trading market for fixed income products and foreign exchange
products will seek out revenue opportunities in the commodities
markets. If we expand into new markets in the future, we could
face significant competition from other companies.
</DIV>

<P align="center" style="font-size: 10pt;">106
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    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B>Intellectual Property</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We rely on a wide range of intellectual property. We own or have
a license to use all of the software that is essential to the
operation of our electronic platform, much of which has been
internally-developed by our technology team since our inception.
In addition to our software, we regard certain business methods
and our brand names, marketing elements, logos and market data
to be valuable intellectual property. We protect this
intellectual property by means of patent, trademark, service
mark, copyright and trade secret laws, contractual restrictions
on disclosure and other methods.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We currently have licenses to use several U.S.&nbsp;patents only
one of which we presently use in the operations of our
electronic platform. The patent we use, known as the Wagner
patent, relates to the automated matching of bids and offers for
futures contracts traded in the United States. We have been
granted a non-exclusive license from eSpeed, Inc. to use the
Wagner patent for the trading of futures contracts where at
least one of the screens is located in the United States or
where the contract provides for delivery of the underlying
commodity in the United States. Under this license, which
expires on the expiration of the Wagner patent in February 2007,
we must pay eSpeed a minimum of $2&nbsp;million per year, plus a
royalty fee equal to the greater of 10 cents for each side to a
contract or generally 20 cents per contract. We paid eSpeed
$32,000 and $14,000 in royalty fees in 2004 and 2003,
respectively. For every 25&nbsp;million applicable contracts
executed on our electronic platform in a given year beyond the
first 25&nbsp;million contracts, we must pay eSpeed an
additional $2&nbsp;million (in addition to the per-contract
charge). In the event that the notional value of any contract
subject to the license exceeds $50,000 as of the date on which
such contract is first available for trading, then the number of
contracts used to calculate the payments described above will
equal the notional value divided by $50,000, with the result
rounded up to the next whole number. eSpeed has agreed that to
the extent it enters into more favorable licensing terms with
any third party, they will modify our license agreement to
incorporate those more favorable terms. We cannot guarantee that
the Wagner patent, or any patent that we may license or acquire
in the future, is or will be valid and enforceable. If the
Wagner patent is found to be invalid, our license will terminate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have several U.S. and foreign patent applications pending,
including with respect to our electronic trade confirmation
service, our method to allow a user to engage in program trading
while protecting their proprietary data and software (known as
ICEMaker), and our method for displaying both cleared OTC
products and bilateral OTC products in a single price stream in
connection with our OTC business. Our electronic trade
confirmation service and our OTC clearing service are also the
subject of applications pending in the European Patent Office
and the Canadian Patent Office. In addition, a Patent
Cooperation Treaty application has been filed with respect to
the ICEMaker system. Through the IPE, we are joint owners with
NYMEX of a patent application related to an implied market
trading system. We can provide no assurance that any of these
applications will result in the issuance of patents.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have received several federal registrations on trademarks
used in our business, including
&#147;IntercontinentalExchange&#148;, &#147;ICE&#148; and our
globe design. We have also received federal registrations on
other services or products we provide, including &#147;10x&#148;
and &#147;ICEMaker&#148;. We have been notified that our
applications for &#147;ICEBLOCK&#148; and
&#147;Interchange&#148; have been approved for publication,
although there is no guarantee that third parties will not
oppose this trademark or that we will prevail in any litigation
brought by a third party. In addition, we have several foreign
and U.S.&nbsp;applications pending for other marks used in our
business. We can provide no assurance that any of these
applications will mature into registered trademarks.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
This prospectus also contains additional trade names, trademarks
and service marks of ours and of other companies. We do not
intend our use or display of other parties&#146; trademarks,
trade names or service marks to imply, and this use or display
should not be construed to imply, our endorsement or sponsorship
of these other parties, their endorsement or sponsorship of us,
or any other relationship between us and these other parties.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Sales</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2004, we employed 19&nbsp;full-time
sales personnel. Our sales team is managed by a futures industry
sales and marketing professional and is comprised mainly of
former brokers and traders with extensive
</DIV>

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<DIV align="left" style="font-size: 10pt;">
experience and established relationships within the commodities
trading community. Since our futures business is highly
regulated, we also employ staff who understand the regulatory
constraints upon marketing in this field.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our marketing strategy is designed to expand relationships with
existing participants through the provision of value-added
products and services, as well as to attract new participants,
including those in markets and geographic areas where we do not
currently have a strong presence. We also seek to build brand
awareness and promote greater public understanding of our
business, including how our technology can improve current
approaches to price discovery and risk management in the energy
markets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 2004, we began to develop a cross-promotional marketing team
for our OTC and futures businesses. We believe this
repositioning of our marketing team is consistent with, and will
provide more effective support of, the underlying emphasis of
our business model&nbsp;&#151; an open architecture and
flexibility that allows us to anticipate and respond rapidly to
evolving trends in the markets for energy commodities trading.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We typically pursue our marketing goals through a combination of
on-line promotion through our website, third party websites,
e-mail, print advertising, one-on-one client relationship
management and participation in trade shows and conferences.
From time to time, we also provide commission rate discounts of
limited duration to support new product launches.
</DIV>

<DIV style="margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B>Property</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our most valuable property is our technology and the
infrastructure underlying it. Our intellectual property is
described above under the heading
&#147;&#151;&nbsp;Technology&#148;. In addition to our
intellectual property, our other primary assets include computer
equipment and real property.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We own and lease an array of computers and related equipment.
The net book value of our computer equipment, software and
internally developed software was $4.2&nbsp;million,
$1.6&nbsp;million and $7.5&nbsp;million, respectively, as of
December&nbsp;31, 2004.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our principal executive offices are located in Atlanta, Georgia.
We occupy 22,332&nbsp;square feet of office space under a lease
that expires in June 2008 and 3,080&nbsp;square feet under a
lease that expires in October 2005. We also lease an aggregate
of 36,634&nbsp;square feet of office space in Calgary, Chicago,
Houston, London, New York and Singapore. Our largest physical
presence outside of Atlanta is in London, England, where we have
leased 26,793&nbsp;square feet of office space. We believe that
our facilities are adequate for our current operations and that
we will be able to obtain additional space as and when it is
needed. The various leases covering these spaces generally
expire between 2008 and 2012. We also own property that houses
disaster recovery facilities for our open-outcry exchange floor.
The net book value of this property was $3.8&nbsp;million as of
December&nbsp;31, 2004.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B>Employees</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2004, we had 91 employees at our
headquarters in Atlanta, 95&nbsp;in London and a total of
14&nbsp;employees in our New York, Houston, Chicago, Singapore
and Calgary offices. None of our employees is subject to a
collective bargaining agreement. We have not experienced any
work stoppages, and we believe our relationship with our
employees is good.
</DIV>

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<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>REGULATION AND LEGAL PROCEEDINGS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We are subject to the jurisdiction of regulatory agencies in the
United States and the United Kingdom. We are also subject to a
number of legal proceedings.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Regulation of Our Business in the United States</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We operate our OTC electronic platform as an exempt commercial
market, or ECM, under the Commodity Exchange Act and regulations
of the Commodities Futures Trading Commission, or the CFTC. The
CFTC generally oversees, but does not substantively regulate,
the trading of OTC derivative contracts on our platform. All of
our participants must qualify as eligible commercial entities,
as defined by the Commodity Exchange Act, and each participant
must trade for its own account, as a principal. Eligible
commercial entities include entities with at least
$10&nbsp;million in assets that incur risks (other than price
risk) relating to a particular commodity or have a demonstrable
ability to make or take delivery of that commodity, as well as
entities that regularly purchase or sell commodities or related
contracts that are either (i)&nbsp;funds offered to specified
types of sophisticated investors that have (or are part of a
group of funds that collectively have) at least $1&nbsp;billion
in assets, or (ii)&nbsp;part of a group with at least
$100&nbsp;million in assets. We have also obtained orders from
the CFTC permitting us to treat floor brokers and floor traders
on U.S. and non-U.S.&nbsp;exchanges as eligible commercial
entities, subject to their meeting certain requirements. As an
ECM, we are required to comply with access, reporting and
record-keeping requirements of the CFTC. Both the CFTC and the
FERC have view only access to our trading screens on a real-time
basis. In addition, we are required to (i)&nbsp;report to the
CFTC certain information regarding transactions in products that
are subject to the CFTC&#146;s jurisdiction and that meet
certain specified trading volume levels, (ii)&nbsp;record and
report to the CFTC complaints that we receive of alleged fraud
or manipulative trading activity, and (iii)&nbsp;if it is
determined by the CFTC that any of our markets for products that
are subject to CFTC jurisdiction serve a significant price
discovery function (that is, a source for determining the best
price available in the market for a particular contract at any
given moment), publicly disseminate certain market and pricing
information free of charge on a daily basis. Presently, we do
not believe that any of our markets serve a significant price
discovery function. We are not permitted to represent to our
participants that we are regulated by the CFTC. Currently, our
OTC business is not otherwise subject to substantive regulation
by the CFTC or other U.S.&nbsp;regulatory authorities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
At various times in the last several years, legislative and
regulatory authorities at both the federal and state levels, as
well as media, political and consumer groups, have called for
increased regulation and monitoring of OTC commodities markets
in general, and the North American natural gas and power
commodities markets, our most important markets, in particular.
These calls have been associated, in part, with suggestions that
manipulative trading practices may have contributed to
unseasonably high prices in the wholesale power market in
California and other western states in the summer of 2000, the
collapse of Enron in 2001 and other events that have adversely
affected the operations and public image of participants in
energy markets. In May 2002, leading market participants in the
energy sector, including users of our electronic platform,
acknowledged that significant percentages of their trades in
recent periods did not generate a profit or a loss for either
trading party and instead were carried out to generate higher
trading volumes than would otherwise have been achieved by those
parties and for other non-bona fide reasons.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In light of these developments, Congress has, at various times
over the last several years, introduced legislation seeking to
restrict OTC derivatives trading of energy generally and to
bring electronic trading of OTC energy derivatives within the
direct scope of CFTC regulation. Legislation has recently been
introduced in Congress that would provide the CFTC with the
authority to require ECMs to comply with additional regulatory
requirements and to require some participants on ECMs to file
reports on their positions. If adopted, this legislation could
require us and our participants to incur additional costs in
order to comply with the additional regulations, and could deter
some participants from trading on our OTC platform. However, we
cannot predict whether this legislation will be adopted, which
could have an adverse effect on our business. Although these
legislative proposals have not been enacted, the same types of
legislation, or similar legislation, could be introduced in the
near future. If such legislation or other legislation were to be
enacted into law, it could have an adverse effect on our
business. In addition, in April 2002, the FERC adopted rules
requiring that all public utilities and power marketers file
quarterly reports about their power trading activities beginning
</DIV>

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<DIV align="left" style="font-size: 10pt;">
July&nbsp;31, 2002. These reports must contain, among other
data, transaction information on all power sales that the
reporting entity has affected during the quarter.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
At various times in recent history, regulators in some states,
including California and Texas, have publicly questioned whether
some form of regulation, including price controls, should be
reimposed in OTC commodities markets, particularly in states
where the power markets were recently deregulated. We or our
participants may, in the future, become subject to additional
legislative or regulatory measures. These could require us to
incur significant compliance costs or to modify our business
strategy. Any measures affecting our participants in connection
with their OTC commodities trading activities could potentially
discourage them from trading on our electronic platform and
adversely affect our competitive position.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Regulation of Our Business in the United Kingdom and
Europe</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Operating as an RIE in the United Kingdom, the IPE has
regulatory responsibility in its own right and is subject to
regulation by the FSA pursuant to the Financial Services and
Markets Act of 2000, or the FSMA. The IPE is required under the
FSMA to meet various regulatory requirements, including a
requirement to maintain sufficient financial resources, adequate
systems and controls and effective arrangements for monitoring
and disciplining its members. The IPE is also required to make
available adequate resources to ensure that it can continue to
perform its regulatory functions. Failure to comply with its
regulatory requirements could subject the IPE to significant
penalties, including termination of its ability to conduct our
regulated business.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The FSMA also contains provisions making it an offense to engage
in certain market behavior and prohibits market abuse through
the misuse of information, the giving of false or misleading
impressions or the creation of market distortions. Breaches of
those provisions give rise to the risk of criminal or civil
sanctions, including financial penalties. The E.U. Market Abuse
Directive, which was due to be adopted in each member state by
October&nbsp;12, 2004, supplements the provisions of the FSMA
regarding market abuse but will also introduce a specific
prohibition against insider dealing in commodity derivative
products. U.K. regulations designed to implement the E.U. Market
Abuse Directive are presently before Parliament. Under the FSMA,
the IPE enjoys statutory immunity in respect of any claims for
damages brought against it relating to any actions it has
undertaken (or in respect of any action or omission) in good
faith, in the discharge of its regulatory function.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In the United Kingdom, we also engage in a variety of activities
related to our OTC business through subsidiary entities that are
subject to FSA regulation. We engage in sales and marketing
activities through our subsidiary IntercontinentalExchange
Services (UK)&nbsp;Limited, or ICE Services UK, is authorized
and regulated by the FSA as an arranger of deals in investments
and as an agency broker, and is subject to the FSA&#146;s
Alternative Trading Systems regime. Under the Alternative
Trading Systems regime, ICE Services UK is subject to various
reporting, record keeping, and monitoring obligations with
respect to use by its participants of our electronic trading
platform.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Some jurisdictions in which our participants reside, in Europe
and elsewhere, have laws relating to commodities trading. We
have reviewed these laws and have concluded that our existing
business activities do not require us to obtain licenses in
those jurisdictions. However, the E.U.&#146;s Directive on
Investment Services in the securities field, or ISD, which
requires each member state of the E.U. to regulate and impose
licensing requirements on professional investment services
firms, is to be replaced by a new E.U. directive, the Markets in
Financial Instruments Directive, or MIFID, which will cover
participants in commodity derivatives markets. MIFID must come
into force in each E.U. member state by April 2007. Service
providers in the commodities markets do not currently fall
within the scope of the ISD. MIFID brings commodity derivatives
within the scope of the E.U. financial regulation and will
harmonize the regulatory approach to licensing services relating
to commodity derivatives across Europe. The proposals also
impose greater regulatory burdens on E.U.-based operators of
alternative trading systems through which instruments regulated
under the directive are traded and will potentially affect
non-E.U. based operators of alternative trading systems. The
finer details of MIFID are still being discussed&nbsp;&#151;
most notably in relation to the definition of commodity
</DIV>

<P align="center" style="font-size: 10pt;">110

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derivatives&nbsp;&#151; and, pending the outcome of this debate,
we may need to obtain licenses in various E.U.&nbsp;member
states in which our participants are based.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Legal Proceedings</B>
</DIV>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>NYMEX Claim of Infringement</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
NYMEX filed a complaint against us in Federal District Court in
the Southern District of New York on November&nbsp;20, 2002.
NYMEX&#146;s complaint asserts that we have infringed its
claimed copyrights by using NYMEX&#146;s publicly available
settlement prices, which it is obligated by CFTC regulation to
make available to the public, in connection with the clearing of
two of our OTC derivative contracts. NYMEX claims that we have
infringed and diluted its service marks by referring to the
terms &#147;NYMEX&#148; and &#147;New York Mercantile
Exchange&#148; to describe the source of the final settlement
price for certain of our OTC swap contract specifications.
Finally, NYMEX asserts that we have tortiously interfered with
NYMEX&#146;s contract with Global View Software Inc., the entity
from whom we have a license to obtain NYMEX&#146;s settlement
prices.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
NYMEX&#146;s settlement prices constitute the end-of-day market
values established by NYMEX in accordance with its
responsibilities as a designated contract market. NYMEX uses its
settlement prices to clear its futures contracts on a daily
basis and to settle at expiration each type of commodity futures
contract (and options on those contracts) traded on NYMEX. We
offer trading on our electronic platform in two cleared OTC swap
contracts, WTI crude oil and Henry Hub natural gas that are
settled at expiration on the basis of NYMEX settlement prices
and that are margined at the end of each trading day by
LCH.Clearnet based on prices determined by us based on trading
in our market, taking into account NYMEX daily settlement
prices. NYMEX has alleged in its complaint that the settlement
prices that it publishes are subject to copyright protection,
and that we are infringing on its rights by using or referring
to these settlement prices in our cleared business. NYMEX has
demanded that we stop these practices and seeks to permanently
enjoin us from using or referring to these settlement prices. We
believe that our offering of contracts settled at expiration
against NYMEX settlement prices, and margined each day based in
part on NYMEX daily settlement prices, as well as our references
to NYMEX when describing these contracts, do not infringe upon
any NYMEX intellectual property rights. Furthermore, we regard
our business practices in this respect as consistent with those
that have generally prevailed in the OTC markets for a
substantial period of time. However, we cannot assure you that
any litigation that might result from NYMEX&#146;s allegations
will be resolved in our favor.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On September&nbsp;2, 2004, we filed a motion for summary
judgment seeking judgment as a matter of law with respect to all
of NYMEX&#146;s claims. Our motion argues that NYMEX&#146;s
copyright claims should be dismissed on a number of grounds,
including that NYMEX&#146;s settlement prices are not the proper
subject matter of copyright; that the Commodity Exchange Act
impliedly repeals the copyright laws; that we have not in any
event infringed NYMEX&#146;s copyrights; that our use of
NYMEX&#146;s settlement prices constitutes &#147;fair use&#148;;
and that our use of these prices does not violate state law. On
November&nbsp;12, 2004, NYMEX filed a cross motion for summary
judgment with respect to the copyrightability of its settlement
prices and its tortuous interference with contract claim. Oral
argument on the cross motions was held on February&nbsp;18,
2005. To date, the court has not ruled on the parties&#146;
cross motions for summary judgment filed by us and NYMEX and no
date for a trial has been set. We are vigorously defending this
claim, but we cannot assure you that this litigation will be
resolved in our favor.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For more information regarding the potential impact on our
business, see &#147;Risk Factors&nbsp;&#151; Our principal
competitor, NYMEX, has filed claims of copyright and trademark
infringement against us, which, if determined adversely to us,
would have a material adverse effect on our business&#148;.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>EBS Dealing Resources Claim of Infringement</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On January&nbsp;29, 2004, EBS Dealing Resources, Inc., or EBS,
filed a complaint against us in Federal District Court in the
Southern District of New York alleging that we are infringing
two patents held by EBS relating to the way in which bids and
offers are displayed on an electronic system in a manner that
permits parties to act only on those bids and offers from
counterparties with whom the party has available credit. EBS
</DIV>

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<DIV align="left" style="font-size: 10pt;">
is a provider of foreign exchange and precious metals trading
and data solutions. EBS claims that the credit filter
functionality of our trading platform infringes EBS&#146;
patented systems and methods for displaying a so-called
&#147;dealable price&#148;. EBS has requested injunctive relief
and monetary damages for the alleged patent infringement. EBS
was denied a request for preliminary injunctive relief in an
April 2004 hearing before the court. A claim construction
hearing, in which the scope of EBS&#146; asserted patent claims
will be construed by the court, is scheduled for May 2005, and a
trial date is scheduled for February 2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We do not believe that our electronic trading system infringes
the EBS patents based upon differences in our system and the
system claimed in the patents. However, we cannot assure you
that this litigation will be resolved in our favor. For more
information regarding the potential impact on our business, see
&#147;Risk Factors&nbsp;&#151; We have been accused of patent
infringement by EBS Dealing Resources&#148;.
</DIV>

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<B>MANAGEMENT</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Directors and Executive Officers</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table provides information regarding our
directors, executive officers and significant employees:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="43%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="left" nowrap><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Age</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Title</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Jeffrey C. Sprecher</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Chairman of the Board and Chief Executive Officer</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Charles R. Crisp</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>57</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Director</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Jean-Marc Forneri</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>46</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Director</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Sir Robert Reid</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>70</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Director</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Frederic V. Salerno</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>61</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Director</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Richard L. Sandor, Ph.D.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>63</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Director</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Judith A. Sprieser</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>51</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Director</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Vincent Tese</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>62</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Director</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Charles A. Vice</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>41</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Chief Operating Officer and Senior Vice President</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Richard V. Spencer</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>51</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Chief Financial Officer and Senior Vice President</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    David S. Goone</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>44</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Senior Vice President, Business Development and Sales</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Edwin Marcial</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>37</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Chief Technology Officer and Senior Vice President</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Richard Ward,&nbsp;Ph.D.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>48</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Chief Executive Officer, the IPE</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Johnathan H. Short</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>39</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Senior Vice President, General Counsel and Corporate Secretary</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Directors</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I>Jeffrey C. Sprecher.</I></B> Mr.&nbsp;Sprecher has been a
director and our Chief Executive Officer since our inception and
has served as our Chairman of the Board since November 2002. As
our Chief Executive Officer, he is responsible for our strategic
direction, operation, and financial performance.
Mr.&nbsp;Sprecher purchased Continental Power Exchange, Inc.,
our predecessor company, in 1997. Prior to joining CPEX,
Mr.&nbsp;Sprecher held a number of positions, including
President, over a fourteen-year period with Western Power Group,
Inc., a developer, owner and operator of large central-station
power plants. While with Western Power, Mr.&nbsp;Sprecher was
responsible for a number of significant financings. In 2002,
Mr.&nbsp;Sprecher was recognized by <I>Business Week</I>
magazine as one of its Top Entrepreneurs. Mr.&nbsp;Sprecher
holds a B.S. degree in Chemical Engineering from the University
of Wisconsin and an MBA from Pepperdine University.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I>Charles R. Crisp.</I></B> Mr.&nbsp;Crisp, who has been a
director since November 2002, is the retired President and Chief
Executive Officer of Coral Energy, a Shell Oil affiliate
responsible for wholesale gas and power activities. He served in
this position from 1999 until his retirement in October 2000,
and was President and Chief Operating Officer from January 1998
through February 1999. Prior to that, Mr.&nbsp;Crisp served as
President of the power generation group of Houston Industries
and, between 1988 and 1996, served as President and Chief
Operating Officer of Tejas Gas Corporation. Mr.&nbsp;Crisp
currently serves as a director of EOG Resources, Inc., AGL
Resources, Inc. and Targa Resources, Inc.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I>Jean-Marc Forneri. </I></B>Mr.&nbsp;Forneri, who has been
a director since November 2002, is founder and senior partner of
Bucephale Finance, a boutique M&#38;A firm specializing in large
transactions for French corporations, foreign investors and
private equity firms. For the seven years prior to
Bucephale&#146;s founding, Mr.&nbsp;Forneri headed the
investment banking business of Credit Suisse First Boston in
Paris. He was Managing Director and
</DIV>

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<DIV align="left" style="font-size: 10pt;">
Head of Credit Suisse First Boston France S.A, and Vice
Chairman, Europe. Prior to that, Mr.&nbsp;Forneri was a Partner
of Demachy Worms&nbsp;&#38; Cie Finance from 1994 to 1996, where
he was in charge of investment banking activities of Group
Worms. Mr.&nbsp;Forneri is also a Director of Balmain SA, Banque
Lyonnaise Bonnasse, SAGEM, SNECMA and Friends of Paris Museum of
Modern Art.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I>Sir Robert Reid.</I></B> Sir Robert Reid, who has been a
director since June 2001, has served since 1997 as the Deputy
Governor of the Bank of Scotland and, since 1999, as the
Chairman of The International Petroleum Exchange of London. He
spent much of his career at Shell International Petroleum
Company Limited, and served as Chairman and Chief Executive of
Shell U.K. Limited from 1985 until 1990. He became Chairman of
the British Railways Board in 1990, and retired from that post
in 1995. From 1994 to 1997, he was Chairman of London
Electricity. He was Chairman of the Council of The Industrial
Society between 1993 and 1998 and Chairman of Sears plc from
1995 until 1999. He has been Chairman of Sondex Limited since
1999 and Chairman of Kings Cross Partnership since 2000. He has
also served as a Non-Executive Director on the boards of The
Merchants Trust since 1995, Avis Europe since 2002 (Chairman),
Sun Life Financial Services of Canada since 1997 and Siemens plc
since 1998. He received his Knighthood in Queen Elizabeth&#146;s
1990 Birthday Honours.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I>Frederic V. Salerno.</I></B> Mr.&nbsp;Salerno, who has
been a director since November 2002, is the former Vice Chairman
of Verizon Communications, Inc. Before the merger of Bell
Atlantic and GTE, Mr.&nbsp;Salerno was Senior Executive Vice
President, Chief Financial Officer and served in the Office of
the Chairman of Bell Atlantic from 1997 to 2001. Prior to
joining Bell Atlantic, he served as Executive Vice President and
Chief Operating Officer of New England Telephone from 1985 to
1987, President and Chief Executive Officer of New York
Telephone from 1987 to 1991 and Vice Chairman&nbsp;&#151;
Finance and Business Development at NYNEX from 1991 to 1997.
Mr.&nbsp;Salerno served on the boards of directors of Verizon
Communications, Inc. from 1991 to 2001, AVNET, Inc. from 1993 to
2003 and was Chairman of Orion Power from 1999 until its sale in
2001. He has served on the boards of directors of The Bear
Stearns Companies, Inc. since 1993, Viacom, Inc. since 1996,
Consolidated Edison, Inc. since 2002, Popular, Inc. since 2002,
Akamai Technologies, Inc. since 2002 and Gabelli Asset
Management since 2003.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I>Richard L. Sandor,&nbsp;Ph.D.</I></B> Dr.&nbsp;Sandor, who
has been a director since November 2002, is the Chairman and
Chief Executive Officer of the Chicago Climate Exchange, Inc.,
and has served as Chairman and Chief Executive Officer of
Environmental Financial Products, L.L.C. since 1998. Prior to
the creation of Environmental Financial, Dr.&nbsp;Sandor was a
senior financial markets executive with Kidder Peabody from 1991
to 1993, Banque Indosuez from 1990 to 1991 and Drexel Burnham
Lambert from 1982 to 1990. Dr.&nbsp;Sandor has served as a
Non-Resident Director of the CBOT, as the CBOT&#146;s Second
Vice-Chairman of Strategy and, for more than three years, as the
CBOT&#146;s Chief Economist. Dr.&nbsp;Sandor is currently a
director of Nasdaq Liffe Markets, American Electric Power, the
Zurich-based Sustainable Performance Group, Nextera Enterprises
Inc., Millenium Cell, Bear Stearns Financial Products, Inc. and
its subsidiary, Bear Stearns Trading Risk Management Inc. He is
also a member of the design committee of the Dow Jones
Sustainability Index. Dr.&nbsp;Sandor is currently a Research
Professor at the Kellogg Graduate School of Management at
Northwestern University and has been a faculty member of the
School of Business Administration at the University of
California, Berkeley and at Stanford University.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I>Judith A. Sprieser. </I></B>Ms.&nbsp;Sprieser, who has
been a director since April 2004, is the Chief Executive Officer
of Transora, Inc., a standards-based, B2B e-commerce software
and services company, which she helped found in 2000.
Ms.&nbsp;Spreiser will serve in that capacity until April 2005.
Ms.&nbsp;Sprieser was previously Executive Vice President of
Sara Lee Corporation, serving as Chief Executive of Sara
Lee&#146;s Food and Foodservice operations from 1999 to 2000.
Prior to assuming that post, she served as Chief Financial
Officer for Sara Lee Corporation, and in various other financial
and operating positions. Ms.&nbsp;Sprieser currently is a member
of the boards of directors of Allstate Insurance Company, USG
Corporation, Kohl&#146;s Corporation, Reckitt Benckiser, and is
a member of the American Institute of CPAs and Northwestern
University&#146;s Board of Trustees. She has a B.A. degree and
an MBA from Northwestern University.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I>Vincent Tese. </I></B>Mr.&nbsp;Tese, who has been a
director since April 2004, currently serves as Chairman of
Wireless Cable International, Inc., a position he has held since
1995. Previously, he served as New York State Superintendent of
Banks from 1983 to 1985, Chairman and Chief Executive Officer of
the Urban
</DIV>

<P align="center" style="font-size: 10pt;">114
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<DIV align="left" style="font-size: 10pt;">
Development Corporation from 1985 to 1994, Director of Economic
Development for New York State from 1987 to 1994, and
Commissioner and Vice Chairman of the Port Authority of New York
and New Jersey from 1991 to 1995. Mr.&nbsp;Tese also served as a
Partner in the law firm of Tese&nbsp;&#38; Tese from 1973 to
1977. He was a Partner in the Sinclair Group, a commodities
trading and investment management company from 1977 to 1982,
where he traded on the COMEX. He was also a co-founder of Cross
Country Cable TV. Mr.&nbsp;Tese is a member of the boards of
directors of The Bear Stearns Companies, Inc., Bowne&nbsp;&#38;
Co., Inc., Cablevision, Inc., Gabelli Asset Management and
National Wireless Holdings, Inc., and serves as a trustee of New
York University School of Law and New York Presbyterian
Hospital. Mr.&nbsp;Tese has a B.A. degree in accounting from
Pace University, a J.D. degree from Brooklyn Law School and a
LL.M. degree in taxation from New York University School of Law.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Executive Officers</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I>Jeffrey C. Sprecher.</I></B> See biography of
Mr.&nbsp;Sprecher under &#147;Directors&#148;.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I>Charles A. Vice.</I></B> Mr.&nbsp;Vice, who has been our
Chief Operating Officer since July 2001, oversees our
operations, including market development, customer support and
business development activities. Mr.&nbsp;Vice has over
15&nbsp;years of experience in applying information technology
in the energy industry. Mr.&nbsp;Vice joined CPEX as a Marketing
Director during its startup in 1994. Prior to joining CPEX,
Mr.&nbsp;Vice was a Principal with Energy Management Associates
for five years, providing consulting services to energy firms.
From 1985 to 1988, he was a Systems Analyst with Electronic Data
Systems. Mr.&nbsp;Vice holds a Bachelor&#146;s of Science degree
in Mechanical Engineering from the University of Alabama and an
MBA from Vanderbilt University.
</DIV>

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<B><I>Richard V. Spencer.</I></B> Mr.&nbsp;Spencer, who has been
our Chief Financial Officer since December 2001, is responsible
for all aspects of our finance and accounting functions,
including treasury, tax, cash management and investor relations.
Mr.&nbsp;Spencer joined us from Crossroads Investment Advisers,
L.P., a venture capital and strategic private equity investment
organization, where he served as President from 1998 to 2001.
Previously, he was a senior vice-president with the Private
Funds Group of Donaldson, Lufkin&nbsp;&#38; Jenrette, or DLJ.
Prior to joining DLJ, Mr.&nbsp;Spencer was a director with the
Private Equity Group of Merrill Lynch in Atlanta. From 1990 to
1994, he oversaw the Canadian operations of First Chicago. He
also worked in corporate finance, marketing and underwriting
roles for Bear, Stearns and Co., Inc. and Goldman,
Sachs&nbsp;&#38; Co. Mr.&nbsp;Spencer earned his Bachelor&#146;s
Degree in Economics from Rollins College. He has also completed
the Advanced Management Program at Duke University&#146;s Fuqua
School of Business.
</DIV>

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<B><I>David S. Goone.</I></B> Mr.&nbsp;Goone joined us in March
2001 and became our Senior Vice President, Business Development
and Sales in April 2004. He is responsible for the expansion of
our product line, including futures products and trading
capabilities for our electronic platform. Prior to joining us,
Mr.&nbsp;Goone served as the Managing Director, Product
Development and Sales at CME where he worked for nine years.
From 1989 through 1992, Mr.&nbsp;Goone was Vice President at
Indosuez Carr Futures, where he developed institutional and
corporate business. Prior to joining Indosuez, Mr.&nbsp;Goone
worked at Chase Manhattan Bank, where he developed and managed
their exchange-traded foreign currency options operation at the
CME. Mr.&nbsp;Goone holds a B.S. degree in Accountancy from the
University of Illinois at Urbana-Champaign.
</DIV>

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<B><I>Edwin Marcial.</I></B> Mr.&nbsp;Marcial, who has been our
Chief Technology Officer since February 2000, is responsible for
all systems development and our overall technology strategy. He
oversees the software design and development initiatives of our
information technology professionals in the areas of project
management, software development, quality assurance and
security. Mr.&nbsp;Marcial joined the software development team
at CPEX in 1996 and has 12&nbsp;years of IT experience building
large-scale systems in the energy industry. Prior to joining
CPEX, he led design and development teams at GE-Harris building
software applications for the company&#146;s energy management
systems. Mr.&nbsp;Marcial earned a B.S. degree in Computer
Science from the College of Engineering at the University of
Florida.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I>Richard Ward,&nbsp;Ph.D.</I></B> Dr.&nbsp;Ward, who has
been Chief Executive Officer of the IPE since 1999, is
responsible for the IPE&#146;s financial performance, technology
and market operations, human resources, business development and
regulation and risk management. Prior to assuming the role of
Chief Executive Officer of the IPE, Dr.&nbsp;Ward served as the
Executive Vice President of Business Development for the IPE,
responsible for
</DIV>

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<DIV align="left" style="font-size: 10pt;">
establishing networks between the IPE&#146;s board of directors
and members and key outside parties, implementing business
improvement programs and leading design and development of the
innovative futures gas market. Before joining the IPE in 1995,
Dr.&nbsp;Ward was Head of Marketing and Business Development for
energy derivatives worldwide at Tradition Financial Services and
was the Manager of Business Development for BP Oil Trading
International. Dr.&nbsp;Ward currently serves as a Non-Executive
Director of LCH.Clearnet Group Limited and served as a director
of the Futures and Options Association until January 2005.
Dr.&nbsp;Ward has a B.Sc. (1st&nbsp;Class&nbsp;Hons.) in
Chemistry and a Ph.D. in Physical Chemistry from Exeter
University.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I>Johnathan H. Short.</I></B> Mr.&nbsp;Short has been our
Senior Vice President, General Counsel and Corporate Secretary
since June 2004. In his role as General Counsel, he is
responsible for managing our legal and regulatory affairs. As
Corporate Secretary, he is also responsible for a variety of our
corporate governance matters. Prior to joining us,
Mr.&nbsp;Short was a partner at McKenna Long&nbsp;&#38; Aldridge
LLP, a national law firm with approximately 350 attorneys.
Mr.&nbsp;Short practiced in the corporate law group of McKenna,
Long&nbsp;&#38; Aldridge (and its predecessor firm, Long
Aldridge&nbsp;&#38; Norman LLP) from November 1994 until he
joined us in June 2004. From April 1991 until October 1994, he
practiced in the commercial litigation department of Long
Aldridge&nbsp;&#38; Norman LLP. Mr.&nbsp;Short holds a J.D. from
the University of Florida, College of Law, and a B.S. in
Accounting from the University of Florida, Fisher School of
Accounting.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Board of Directors</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our board of directors consists of eight members. Our board of
directors is elected annually, and each director holds office
for a one-year term.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Board Committees</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our board of directors has an audit committee and a compensation
committee. Prior to the completion of this offering, our board
will also establish a nominating and corporate governance
committee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I>Audit Committee.</I></B> Our audit committee consists of
Messrs.&nbsp;Salerno, Forneri and Crisp. Mr.&nbsp;Salerno serves
as the chair of the audit committee. Mr.&nbsp;Salerno will be
our audit committee financial expert under SEC rules and
regulations. We believe that the composition of our audit
committee meets the requirements for independence under current
rules and regulations of the SEC and the New York Stock
Exchange, and we intend to comply with future requirements to
the extent they become applicable to us. Our audit committee
will, among other things, oversee the engagement of our
independent public accountants, review our financial statements
and the scope of annual external and internal audits and
consider matters relating to accounting policies and internal
controls. The audit committee will be governed by a charter that
complies with the rules of the SEC and the New York Stock
Exchange.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I>Compensation Committee.</I></B> Our compensation committee
consists of Ms.&nbsp;Sprieser and Messrs.&nbsp;Tese and Forneri.
Ms.&nbsp;Sprieser serves as the chair of our compensation
committee. We believe that the composition of our compensation
committee meets the requirements for independence under, and the
functioning of our compensation committee complies with, current
rules and regulations of the SEC and the New York Stock
Exchange. We intend to comply with future requirements to the
extent they become applicable to us. The compensation committee
will, among other things, review, approve and make
recommendations to our board of directors concerning our
compensation practices, policies and procedures for our
executive officers. The compensation committee will be governed
by a charter that complies with the rules of the SEC and the New
York Stock Exchange.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I>Nominating and Corporate Governance Committee.</I></B>
Prior to the completion of this offering, our board of directors
will establish a nominating and corporate governance committee.
The nominating and corporate governance committee will, among
other things, identify, nominate and recommend individuals to
the board of directors and develop and recommend to the board of
directors standards of corporate governance principles. The
nominating and corporate governance committee will be governed
by a charter that complies with the rules of the New York Stock
Exchange.
</DIV>

<P align="center" style="font-size: 10pt;">116

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The nominating and corporate governance committee will also be
responsible for developing and recommending to the board of
directors a set of corporate governance guidelines and
principles applicable to us.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Compensation Committee Interlocks and Insider
    Participation</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
None of the members of our compensation committee has at any
time been one of our officers or employees. None of our
executive officers currently serves, or in the past year has
served, as a member of the board of directors or compensation
committee of any entity that has one or more executive officers
serving on our board of directors or compensation committee.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Director Compensation</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Directors who are also our employees do not receive additional
compensation for serving as directors. Non-employee directors
are paid an annual retainer of $30,000, which amount may be
taken as restricted shares of our common stock that vest over
three years under our 2003 Restricted Stock Deferral Plan for
Outside Directors. Non-employee directors receive a fee of
$1,500 for attendance at each meeting of the board of directors
and each committee meeting. Members of the audit committee
receive a fee of $3,000 for attendance at each meeting of the
audit committee. Both of these meeting fees may be taken in the
form of restricted shares of our common stock that vest over
three years under our 2003 Restricted Stock Deferral Plan for
Outside Directors. Non-employee directors are also reimbursed
for out-of-pocket expenses incurred in attending meetings of our
board of directors. Directors are eligible for grants of stock
options under the 2000 Stock Option Plan and grants of
restricted stock under our 2004 Restricted Stock Plan, in each
case in an amount determined from time to time by our board of
directors.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>IPE Board of Directors</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
At the time of our acquisition of the IPE, we committed to
maintain an appropriate corporate governance structure for the
IPE to ensure its compliance with the obligations imposed by
U.K. law and the regulations applicable to it as an RIE. We
agreed that the IPE&#146;s board of directors should continue to
have primary responsibility for ensuring this compliance, and
the IPE agreed that it would retain at least two independent
non-executive directors. We may accept nominations of possible
candidates for the IPE&#146;s board from a nominations committee
of the IPE&#146;s board of directors, comprised of its
chairperson, chief executive officer, one of its non-executive,
independent directors and one of its directors representative of
its members. In addition, we are able to nominate and elect the
board of IPE Holdings Plc, and thereby, indirectly, to control
the management of the IPE. The IPE&#146;s board of directors
operates in accordance with a code of practice that the IPE
adopted in April 2000. The code of practice, which is not
legally binding, provides for consultation with market
participants on various matters.
</DIV>

<P align="center" style="font-size: 10pt;">117

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left" style="font-size: 10pt; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Executive Compensation</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table sets forth all compensation paid by us for
each of the years ended December&nbsp;31, 2004, 2003 and 2002 to
our chief executive officer and our five most highly compensated
executive officers other than our chief executive officer who
were serving as executive officers at the end of the last fiscal
year. We refer to these individuals as the named executive
officers elsewhere in this prospectus.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Summary Compensation Table</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 9pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="21%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>


<TR style="font-size: 7pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="14" align="center" nowrap><B>Annual Compensation</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Long-Term Compensation</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="14" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>


<TR style="font-size: 7pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="15">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Awards(1)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Payouts</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="15">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 7pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="15">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Securities</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 7pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="15">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Restricted</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Underlying</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>LTIP</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>All Other</B></TD><TD></TD>
</TR>

<TR style="font-size: 7pt;">
    <TD colspan="2" align="left" nowrap><B>Name and Principal</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="11">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Other Annual</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Stock Unit</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Options/</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Payouts</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Compen-</B></TD><TD></TD>
</TR>

<TR style="font-size: 7pt;">
    <TD colspan="2" align="left" nowrap><B>Position</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Year</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Salary ($)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Bonus ($)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Compensation ($)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Awards&nbsp;($)(7)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>SARs (#)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>($)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>sation ($)</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR bgcolor="#C1BF0A">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Jeffrey C. Sprecher</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>603,750</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>431,681</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>421,498</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,533,400</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21,236</TD>
    <TD>&nbsp;</TD>
</TR>

<TR bgcolor="#C1BF0A">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Chairman and Chief</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>603,750</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>333,572</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>246,749</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>900,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21,268</TD>
    <TD>&nbsp;</TD>
</TR>

<TR bgcolor="#C1BF0A">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Executive Officer(2)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2002</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>500,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>560,625</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>309,664</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20,991</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Charles A. Vice</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>420,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>231,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,500,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,949</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SVP, Chief Operating</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>420,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>178,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>432,200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Officer(3)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2002</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>366,667</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>300,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR bgcolor="#C1BF0A">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Richard V. Spencer</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>420,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>231,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,500,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,263</TD>
    <TD>&nbsp;</TD>
</TR>

<TR bgcolor="#C1BF0A">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SVP, Chief Financial</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>420,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>178,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>432,200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR bgcolor="#C1BF0A">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Officer(4)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2002</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>304,615</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>500,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Dr. Richard Ward</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>448,252</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>190,507</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>670,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>89,650</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Chief Executive</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>400,355</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>170,151</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>231,350</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>80,071</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Officer, IPE(5)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2002</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>354,169</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>141,667</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>70,834</TD>
    <TD>&nbsp;</TD>
</TR>

<TR bgcolor="#C1BF0A">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    David S. Goone</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>338,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>185,900</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>930,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,152</TD>
    <TD>&nbsp;</TD>
</TR>

<TR bgcolor="#C1BF0A">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SVP, Business</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>338,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>143,650</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>330,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR bgcolor="#C1BF0A">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Development &#38; Sales(6)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2002</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>314,230</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>243,750</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Edwin D. Marcial</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>350,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>192,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,250,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,621</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SVP, Chief</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>350,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>148,750</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>330,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Technology Officer(7)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2002</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>300,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>243,750</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,000</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    The long-term compensation awards will be adjusted for the
    recapitalization at the completion of this offering by giving
    effect to
    the &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;for
    1 reverse stock split of the Class&nbsp;A common stock.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    Effective as of January&nbsp;1, 2005, Mr.&nbsp;Sprecher&#146;s
    annual salary was increased from $603,750 to $675,750 in
    conjunction with the elimination of his $72,000 annual housing/
    travel allowance. Other annual compensation includes loan
    forgiveness and related gross up of tax allowance amount (CPEX
    portion of LLC tax liability) of $349,498 in 2004 ($201,136 plus
    gross up of $148,362), $174,749 in 2003 ($100,568 plus gross up
    of $74,181) and $185,664 in 2002 ($100,568 plus gross up of
    $85,096) and payment of an Atlanta housing and travel allowance
    ($72,000 in 2004, $72,000 in 2003 and $124,000 in 2002). All
    other compensation includes payment of an individual disability
    income policy ($8,988 in 2004, $9,478 in 2003 and $9,201 in
    2002), payment of a term life insurance policy ($1,998 in 2004,
    $1,790 in 2003 and $1,790 in 2002) and the employer match in our
    401(k) plan ($10,250 in 2004, $10,000 in 2003 and $10,000 in
    2002).</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(3)&nbsp;</TD>
    <TD align="left">
    All other compensation for Mr.&nbsp;Vice includes the employer
    match in our 401(k) plan ($10,250 in 2004, $10,000 in 2003 and
    $10,000 in 2002), payment of an individual disability income
    policy ($5,822 in 2004) and payment of a term life insurance
    policy ($877 in 2004).</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(4)&nbsp;</TD>
    <TD align="left">
    Mr.&nbsp;Spencer&#146;s 2002 bonus is comprised of a signing
    bonus ($200,000) and a year-end performance bonus ($300,000).
    All other compensation includes the employer match in our 401(k)
    plan ($10,250 in 2004, $10,000 in 2003 and $10,000 in 2002),
    payment of an individual disability income policy ($6,134 in
    2004) and payment of a term life insurance policy ($1,879 in
    2004).</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(5)&nbsp;</TD>
    <TD align="left">
    All figures for Dr.&nbsp;Ward have been converted to
    U.S.&nbsp;dollars using the average exchange rate of pounds
    sterling per U.S.&nbsp;dollar in each year (1.8296 pounds
    sterling per U.S.&nbsp;dollar in 2004, 1.6341 in 2003 and 1.5071
    in 2002). All other compensation includes a pension contribution
    of 20% of salary.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">118

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>(6)&nbsp;</TD>
    <TD align="left">
    In March 2005, the compensation committee approved a salary
    increase for Mr.&nbsp;Goone from $338,000 to $400,000 per year,
    effective as of January&nbsp;1, 2005. All other compensation for
    Mr.&nbsp;Goone includes the employer match in our 401(k) plan
    ($10,250 in 2004, $10,000 in 2003 and $10,000 in 2002), payment
    of an individual disability income policy ($5,072 in 2004) and
    payment of a term life insurance policy ($830 in 2004).</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(7)&nbsp;</TD>
    <TD align="left">
    All other compensation for Mr.&nbsp;Marcial includes the
    employer match in our 401(k) plan ($10,250 in 2004, $10,000 in
    2003 and $10,000 in 2002), payment of an individual disability
    income policy ($3,946 in 2004) and payment of a term life
    insurance policy ($425 in 2004).</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(8)&nbsp;</TD>
    <TD align="left">
    2004 Restricted Stock Awards are the only grants to the named
    executive officers between 2002 and 2004, and were granted at a
    fair market value of $2.00 per share as determined by the
    company&#146;s board of directors primarily based on a valuation
    performed by an independent third party. 50% of the shares are
    time-vesting shares that vest over four years (25% after one
    year and the balance vesting ratably over the remaining
    36&nbsp;months); and 50% of the shares are performance-vesting
    shares and vest based on the achievement of cumulative EBITDA
    performance vs. pre-established targets between 2005 and 2007.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Employment Agreements and Benefit Plans</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have entered into employment agreements with each of
Messrs.&nbsp;Sprecher, Spencer, Vice, Marcial, Goone and Short
and Dr.&nbsp;Ward. Below are summaries of the material
provisions of these agreements, which are qualified in their
entirety by reference to the respective agreements.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Term of Employment</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Each agreement (other than Dr.&nbsp;Ward&#146;s) provides for an
initial employment term of two or three years, depending on the
employee. The term of each agreement will be automatically
extended every six months unless either we or the employee,
prior to the date of extension, give written notice to the other
that there will be no extension. The extension will be for a
term equal to the initial term&nbsp;&#151; that is, two or three
years, depending on the employee. The effect of this provision
is to ensure that the term remaining under any of these
agreements is never more than six months less than the initial
term. The initial term is three years for Messrs.&nbsp;Sprecher,
Spencer and Vice, and two years for Messrs.&nbsp;Goone, Marcial
and Short. Dr.&nbsp;Ward&#146;s agreement provides for a rolling
one year employment, terminable upon 12&nbsp;months&#146; notice
by either party.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Compensation</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Each employment agreement provides for an initial annual base
salary. See &#147;&#151;&nbsp;Executive Compensation&#148;
above. Each of these employees is also eligible to receive an
annual bonus and to receive from time to time grants of awards
under our 2000 Stock Option Plan and 2004 Restricted Stock Plan,
in each case as set by the compensation committee of our board
of directors or by our board of directors as a whole.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Termination</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If we terminate an employee for &#147;cause&#148; or &#147;gross
misconduct&#148; or any such employee resigns other than for
&#147;good reason&#148;, as each term is defined in the
applicable employment agreement, we must pay the employee, among
other benefits, all accrued but unpaid salary, annual bonus, if
any, and unreimbursed expenses. In the event that we terminate
any employee other than for cause or the employee resigns for
good reason, we must compensate the employee as follows:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I>Termination Following a Change in Control.</I></B> If the
termination occurs after the effective date of a change in
control of us, we must pay the employee a lump sum amount of
cash equal to a multiple of his salary and bonus. This multiple
is three for Messrs.&nbsp;Sprecher, Spencer and Vice, and two
for Messrs.&nbsp;Goone, Marcial and Short. In these
circumstances, the applicable bonus amount will be the greater
of the employee&#146;s last annual bonus and the employee&#146;s
target bonus, as previously determined by the board, for the
year in which the employee is terminated. We will also provide
gross up payments to the terminated employee as necessary to
compensate him for liability for certain excise taxes that may
become due as a result of payments called for
</DIV>

<P align="center" style="font-size: 10pt;">119

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<DIV align="left" style="font-size: 10pt;">
under the employment agreement. Dr.&nbsp;Ward&#146;s agreement
provides for a mutual notice period of one year in order to
terminate the agreement without cause.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A U.S.&nbsp;executive terminated following, or as a result of, a
change in control will be entitled to exercise his stock options
that had been granted after entering into the employment
agreement for the same period as if the employee had continued
in employment through the remainder of his term. All of
employee&#146;s stock options granted after the date of the
employment agreement will become exercisable upon the
executive&#146;s termination. For a U.K. executive terminated
following, or as a result of, a change in control, all options
will become exercisable and all restricted stock will vest upon
such executive&#146;s termination, pursuant to agreements
entered into under the 2000 Stock Option Plan and 2004
Restricted Stock Plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I>Termination Unrelated to a Change in Control.</I></B> If
the termination of a U.S.&nbsp;executive is unrelated to a
change in control, we must continue to pay his salary and bonus
for the remainder of the employment term, over time as it would
normally be paid, with the bonus so paid equal to the greater of
the last annual bonus paid to him prior to termination and his
target bonus for the applicable year. In addition, any stock
options granted after the date of the applicable employment
agreement will become exercisable upon the employee&#146;s
termination.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Other Provisions</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Dr.&nbsp;Ward&#146;s employment agreement contains provisions
relating to confidentiality and exclusivity of services. Each of
the other employees named above is subject to customary
confidentiality, non-competition and non-solicitation provisions
during the term of employment and for a specified period after
termination, and each must not use or disclose any of our trade
secrets for as long as they remain trade secrets.
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Benefit Plans</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our U.S.&nbsp;employees are eligible to participate in our
401(k) and Profit Sharing Plan, which was implemented on
October&nbsp;1, 2001. We offer to match 100% of the first 5% of
the eligible employee&#146;s compensation contributed to the
plan, subject to plan and statutory limits. Total matching
contributions under our plans in 2004, 2003 and 2002 were
$617,000, $556,000 and $473,000, respectively. No discretionary
or profit sharing contributions were made in 2004, 2003 or 2002.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our U.K.-based subsidiaries have a defined contribution pension
plan for eligible employees. We contribute a percentage of the
employee&#146;s base salary to the plan each month and employees
are able to make additional voluntary contributions, subject to
plan and statutory limits. Our contributions range from 10% to
20% of an employee&#146;s base salary. Total pension
contributions made by us under this plan in 2004, 2003 and 2002
were $789,000, $750,000 and $617,000, respectively.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>2000 Stock Option Plan</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We adopted the 2000 Stock Option Plan for the purposes of
attracting, retaining and rewarding our employees and directors.
Prior to the completion of this offering, our compensation
committee will amend the plan to take into account the
recapitalization by giving effect to
the&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;for&nbsp;1
reverse stock split of the Class&nbsp;A common stock (and
related adjustments) and the substitution of new common stock
for Class&nbsp;A2 common stock authorized for issuance under the
plan. The 2000 Stock Option Plan authorizes the issuance of up
to 21,000,000&nbsp;shares of Class&nbsp;A2 common stock upon the
exercise of options under the plan. Following the
recapitalization and the amendment of the
plan, &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of the new common stock will be authorized for issuance. Both
incentive and nonqualified options may be granted under and
generally vest over four years. Options may be exercised up to
ten years after the date of grant, but generally expire
14&nbsp;days after termination of employment or service as a
director.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In the event of any increase or decrease in the number of issued
shares resulting from a subdivision or consolidation of shares
or the payment of a stock dividend or any other increase or
decrease in the number of issued shares effected without
consideration received by us, the compensation committee will
conclusively determine the adjustment to the number of shares
covered by the 2000 Stock Option Plan, the number of shares
covered by each outstanding option and the exercise price of
each option.
</DIV>

<P align="center" style="font-size: 10pt;">120

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In connection with our June 2001 reorganization, our board of
directors effected a 2.841 to 1 split of the options outstanding
under our stock option plan on June&nbsp;15, 2001. All
references to the number of shares and stock options have been
adjusted to reflect the stock split on a retroactive basis.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Eligibility.</I> Options may be granted to any individual
employed by us, within the meaning of Section&nbsp;3401 of the
Internal Revenue Code of 1986, or to any of our directors, as
the compensation committee may determine.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Administration.</I> The compensation committee administers
the 2000 Stock Option Plan. The compensation committee has the
authority to interpret and construe the plan, grant options and
determine who will receive options and the number of shares to
be granted subject to exercise of options issued under the plan.
All determinations of the compensation committee with respect to
the interpretation and construction of the 2000 Stock Option
Plan are final.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Nonassignability.</I> Options may be exercised only by the
grantee and may not be assigned or transferred during the
grantee&#146;s lifetime.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Restrictions on Shares Acquired.</I> In connection with an
underwritten registered offering of any of our securities, we
may require that optionees not sell, dispose of, transfer, make
any short sale of, grant any option for the purchase of, or
enter into any hedging or similar transaction having the same
economic effect as a sale with respect to any shares or other
securities of our company held by the optionee, for a period of
time specified by the underwriters (not to exceed
12&nbsp;months) following the effective date of registration.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Amendment; Termination.</I> The board of directors may
terminate or amend the 2000 Stock Option Plan, except that no
such termination or amendment may increase the number of shares
subject to the 2000 Stock Option Plan or change the class of
individuals eligible to receive options without the approval of
our shareholders. In addition, no amendment may, without the
grantee&#146;s consent, materially adversely affect a previously
granted option.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>2003 Restricted Stock Deferral Plan for Outside
    Directors</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We adopted the 2003 Restricted Stock Deferral Plan for Outside
Directors, or the 2003&nbsp;Directors Plan, for the purpose of
attracting and retaining outside directors. Under the
2003&nbsp;Directors Plan, members of the board of directors can
elect to receive up to 100% of their retainer and meeting fees
in restricted stock or restricted stock units. Shares of
restricted stock will be issued, or restricted stock units will
be credited, as of the end of each calendar quarter with respect
to retainer and meeting fees otherwise payable in that quarter.
The restricted stock or restricted stock units generally vest
over a three-year period, and one-third of the shares will vest
each year on the anniversary of the end of the calendar quarter
when fees were payable.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Reservation of shares.</I> The compensation committee will
reserve a number of our shares sufficient to cover our
obligations under the 2003&nbsp;Directors Plan for issuance to
eligible grantees in lieu of fees otherwise payable in cash.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In the event of any increase or decrease in the number of issued
shares resulting from a subdivision or consolidation of shares
or the payment of a stock dividend or any other increase or
decrease in the number of issued shares effected without
consideration received by us, the compensation committee will
conclusively determine the adjustment to the number of unissued
shares of restricted stock or the number of restricted stock
units. Prior to the completion of this offering, our
compensation committee will amend the plan to take into account
the recapitalization by giving effect to
the &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;for&nbsp;1 reverse stock
split of the Class&nbsp;A common stock (and related adjustments)
and the substitution of new common stock for Class&nbsp;A2
common stock.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Eligibility.</I> Restricted stock may be issued, or
restricted units credited, to any member of the board of
directors who is not a full-time employee of our company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Administration.</I> The compensation committee administers
the 2003&nbsp;Directors Plan. The compensation committee has the
authority to interpret and construe the 2003&nbsp;Directors
Plan, and all such determinations are final.
</DIV>

<P align="center" style="font-size: 10pt;">121

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Nonassignability.</I> Restricted stock issued under the
2003&nbsp;Directors Plan is not transferable and may not be
sold, exchanged, transferred, pledged, hypothecated or otherwise
disposed of at any time prior to the vesting of such shares. The
right to receive payments with respect to restricted stock units
is generally not assignable or transferable.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Restrictions on Shares Issued.</I> In connection with an
underwritten registered offering of any of our securities, we
may require that eligible directors not sell, dispose of,
transfer, make any short sale of, grant any option for the
purchase of, or enter into any hedging or similar transaction
having the same economic effect as a sale with respect to any
shares or other securities of our company held by the director,
for a period of time specified by the underwriters (not to
exceed 12&nbsp;months) following the effective date of
registration.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Amendment; Termination.</I> The board of directors may at any
time terminate or amend the 2003&nbsp;Directors Plan. No such
termination or amendment may adversely affect any outstanding
restricted stock or restricted stock units.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>2004 Restricted Stock Plan</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In September 2004, we adopted the 2004 Restricted Stock Plan.
The purpose of the 2004 Restricted Stock Plan is to attract,
retain and reward individuals performing services for us.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Type of Awards.</I> The 2004 Restricted Stock Plan allows us
to issue awards of restricted stock or units that convert into
shares of our stock. Prior to the completion of this offering,
our compensation committee will amend the plan to take into
account the recapitalization by giving effect to
the &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;for&nbsp;1 reverse stock
split of the Class&nbsp;A common stock (and related adjustments)
and the substitution of new common stock for Class&nbsp;A2
common stock.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In the event of any increase or decrease in the number of issued
shares resulting from a subdivision or consolidation of shares
or the payment of a stock dividend or any other increase or
decrease in the number of issued shares effected without
consideration received by us, the compensation committee will
conclusively determine the adjustment to the number of shares
covered by each outstanding award.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Eligibility.</I> Awards may be made at the sole discretion of
the compensation committee to any of our employees that are
members of a select group of management or highly compensated
employees within the meaning of Sections&nbsp;201(1), 301(a)(3)
and 401(a)(1) of the Employee Retirement Income Security Act of
1974, or to any of our directors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Vesting may be time-based or performance-based. Vesting may be
accelerated by events such as a change in control, an initial
public offering, or a sale of our company or of substantially
all of our assets, but may not be deferred for more than ten
years.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Administration.</I> The compensation committee administers
the 2004 Restricted Stock Plan. The compensation committee has
the authority to interpret and construe the plan, grant awards
and determine who will receive awards and in what amounts. The
determination of the compensation committee with respect to the
interpretation and construction of the 2004 Restricted Stock
Plan is final.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Nonassignability.</I> Awards under the 2004 Restricted Stock
Plan are not assignable or transferable during the lifetime of
the grantee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Restrictions on Shares Issued.</I> In connection with an
underwritten registered offering of any of our securities, we
may require that eligible directors not sell, dispose of,
transfer, make any short sale of, grant any option for the
purchase of, or enter into any hedging or similar transaction
having the same economic effect as a sale with respect to any
shares or other securities of our company held by the grantee,
for a period of time specified by the underwriters (not to
exceed 12&nbsp;months) following the effective date of
registration.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Amendment; Termination.</I> The board of directors may, with
respect to shares at the time not subject to awards, terminate
or amend the plan. No such termination or amendment may, without
the grantee&#146;s consent, materially adversely affect a
previously granted award.
</DIV>

<P align="center" style="font-size: 10pt;">122

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Option Grants in the Last Fiscal Year</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
There were no options to purchase our stock granted to our named
executive officers during the year ended December&nbsp;31, 2004.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Aggregated Option Exercises in the Last Fiscal Year and
    Fiscal Year End Option Values</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table contains information with respect to options
exercised during the year ended December&nbsp;31, 2004 and the
value of unexercised options held by our named executive
officers as of December&nbsp;31, 2004.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Aggregated Option Exercises in 2004</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>and 2004&nbsp;Year End Option Values</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="28%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Number of Securities</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Number of</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Underlying Unexercised</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Value of Unexercised</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Shares</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Options at</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>In-the-Money Options at</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Acquired on</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Value</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Fiscal Year-End(1)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Fiscal Year-End(1)</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Exercise</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Realized</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="center" nowrap><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Exercisable</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Unexercisable</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Exercisable</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Unexercisable</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Jeffrey C. Sprecher(2)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>651,150</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>675,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>404,843</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Charles A. Vice(3)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>250,100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>324,150</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>134,948</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Richard V. Spencer</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>108,050</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>324,150</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Dr. Richard Ward</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>57,838</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>173,513</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    David S. Goone</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>215,797</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>256,753</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>31,961</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>2,131</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Edwin D. Marcial(4)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>224,675</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>247,875</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>134,948</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    The number of securities underlying unexercised options will be
    adjusted for the recapitalization at the completion of this
    offering by giving effect to
    the &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;for
    1 reverse stock split of the Class&nbsp;A common stock.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    The value of unexercised in-the-money options at fiscal year-end
    was calculated by multiplying the number of securities
    underlying unexercised options at fiscal year-end by the
    difference between $2.00 (the fair value as of December&nbsp;31,
    2004 as determined by the board of directors) and the strike
    price (between $1.05 and $2.00) of the option.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(3)&nbsp;</TD>
    <TD align="left">
    Mr.&nbsp;Sprecher is the controlling shareholder of CPEX, which
    holds 9,961,298 of our common shares. Pursuant to the CPEX Stock
    Option Plan, CPEX granted options on shares owned by CPEX to
    eight employees, two of whom (Messrs.&nbsp;Vice and Marcial) are
    current executive officers of our company. As of
    December&nbsp;31, 2004, there were options on
    1,170,046&nbsp;shares of our stock owned by CPEX under the CPEX
    Stock Option Plan. Based on the fair market value of $2.00 per
    share as of December&nbsp;31, 2004 as determined by our board of
    directors, the total value of CPEX&#146;s shares in our company
    is $19.9&nbsp;million, and the value of the unexercised
    in-the-money CPEX options (which are exercised against the
    outstanding CPEX shares) is $1.9&nbsp;million.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(4)&nbsp;</TD>
    <TD align="left">
    Mr.&nbsp;Vice also holds exercisable options for 576,889 of
    CPEX&#146;s equity interest in our business pursuant to the CPEX
    Stock Option Plan. Based on the fair market value of
    $2.00&nbsp;per share as of December&nbsp;31, 2004 as determined
    by our board of directors, the value of the unexercised
    in-the-money CPEX options (which are exercised against the
    outstanding CPEX shares) is $1.0&nbsp;million. These options may
    be exercised by payment of the exercise price to CPEX and will
    have no effect on the dilution of our common stock.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(5)&nbsp;</TD>
    <TD align="left">
    Mr.&nbsp;Marcial also holds exercisable options for 144,222 of
    CPEX&#146;s equity interest in our business pursuant to the CPEX
    Stock Option Plan. Based on the fair market value of $2.00 per
    share as of December&nbsp;31, 2004 as determined by our board of
    directors, the value of the unexercised in-the-money CPEX
    options (which are exercised against the outstanding CPEX
    shares) is $250,944. These options may be exercised by payment
    of the exercise price to CPEX and will have no effect on the
    dilution of our common stock.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">123

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Limitation of Liability and Indemnification of Officers and
Directors</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our charter generally provides that our directors will not be
liable to us or to our shareholders for breach of a fiduciary
duty. Our bylaws generally provide for indemnification against
all losses actually incurred by directors and senior officers in
connection with any action, suit or proceeding relating to their
position as a director or senior officer. These provisions of
our charter and bylaws are discussed further under the heading
&#147;Description of Capital Stock&nbsp;&#151; Limitation of
Liability and Indemnification Matters&#148;.
</DIV>

<P align="center" style="font-size: 10pt;">124

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Our Formation/Original Investment</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In May 2000, our Initial Shareholders entered into a limited
liability company operating agreement, which specified the
equity interests in our business of each Initial Shareholder,
MHC Investment Company and CPEX. The Initial Shareholders also
each agreed to enter into order flow agreements with us, as
discussed below. In consideration of its equity interest, CPEX
contributed all of its assets, including software, operational
know-how and intellectual property, and liabilities to us. Our
chief executive officer, Mr.&nbsp;Sprecher, owns substantially
all of the equity of CPEX, with the remaining equity owned by
members of Mr.&nbsp;Sprecher&#146;s family. MHC Investment
Company issued a perpetual, royalty-free license to use a patent
related to trading in electrical energy, and Morgan Stanley
Capital Group Inc. and The Goldman Sachs Group, Inc. agreed to
execute a term loan agreement, as discussed below.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In November 2000, the limited liability company operating
agreement was amended and restated to provide an additional
equity interest to the Gas and Power Firms, representing an
aggregate 32% interest in our business. In exchange for this
equity interest, the Gas and Power Firms agreed to make an
aggregate cash payment of $30&nbsp;million in three
installments: $10&nbsp;million upon issuance of the new equity
interests and two additional payments of $10&nbsp;million
payable when our electronic platform became substantially
operational with respect to North American natural gas and power
products. In April 2001, the Gas and Power Firms advanced the
remaining $20&nbsp;million to fulfill their agreement. The Gas
and Power Firms also entered into order flow agreements with us,
as discussed below.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Relationships with Our Initial Shareholders</B>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>CPEX Stock Option Plan</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Five of our executives and employees hold options that were
granted between 1998 and 2000 under the CPEX Stock Option Plan.
These option holders include our chief operating officer and our
chief technology officer. These options give the option holder
the right to purchase shares of our common stock from CPEX, and
are fully vested. The exercise price for these options ranges
from
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share. In total, there
are &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;options
outstanding under the CPEX plan, which could be exercised
against CPEX&#146;s total equity stake in our business
of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares.
This could result in
a &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
dilution of the equity stake in our business held by
Mr.&nbsp;Sprecher and certain family members through CPEX.
Because the shares of our common stock that will be issued upon
exercise of these options will be issued from the shares owned
by CPEX, and not our shares, the proceeds from the exercise of
these stock options will go directly to CPEX.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>CPEX Put Agreement</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As a part of the transactions surrounding our formation as
described in &#147;&#151;&nbsp;Our Formation/Original
Investment&#148;, we entered into an agreement with our
predecessor company, CPEX, on May&nbsp;11, 2000. Our chief
executive officer, Mr.&nbsp;Sprecher, owned then and continues
to own substantially all the equity interests in CPEX. Pursuant
to the agreement, CPEX conveyed all of its assets and
liabilities to us. These assets included intellectual property
that we used to develop our electronic platform. In return, we
issued to CPEX a 7.2% equity interest in our business and we
agreed to give CPEX a put option, by which CPEX could require us
to buy its equity interest in our business at the purchase price
described below, payable in cash. Upon the closing of this
offering, CPEX&#146;s equity interest in our business will
consist of
approximately &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
of our outstanding common stock. Under this put option, the
purchase price of the CPEX equity interest equals either its
fair market value or a specified minimum amount, whichever is
greater. If our securities are not publicly traded when the put
option is exercised, then fair market value is to be determined
by an investment banking firm selected by both parties. If our
securities are publicly traded, then fair market value equals
the average of bid prices for our publicly traded securities at
the close of trading on the 20 business days before the put
option is exercised. The minimum amount will equal
$5&nbsp;million unless Mr.&nbsp;Sprecher is terminated for cause
or terminates his employment agreement without good reason, in
which case the minimum amount will equal $4&nbsp;million. CPEX
owns &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of
our common shares and, based on an
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;estimated
fair market value
</DIV>

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<DIV align="left" style="font-size: 10pt;">
of these shares as of December&nbsp;31, 2004, the fair market
value of CPEX&#146;s shares is in excess of the $5&nbsp;million
threshold. Upon exercise of the put option, we can either pay
cash within 30&nbsp;days of the exercise or, in certain
circumstances, we can elect to issue a promissory note and defer
payment for one year, with interest accruing on the note at a
rate of LIBOR plus 1%. CPEX has agreed to terminate the CPEX put
option in connection with a revision of CPEX&#146;s registration
rights by the date of this prospectus.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Mr.&nbsp;Sprecher currently owns 92.5% of the equity interest in
CPEX and holds an irrevocable proxy enabling him to vote the
remaining 7.5%. CPEX currently has no assets other than its
equity interest in IntercontinentalExchange, Inc. and conducts
no operations.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Term Loan Agreement</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As part of the transactions surrounding our formation as
described in &#147;&#151;&nbsp;Our Formation/ Original
Investment&#148;, on May&nbsp;11, 2000 we entered into a term
loan agreement with Goldman Sachs Credit Partners L.P., an
affiliate of The Goldman Sachs Group, Inc., and Morgan Stanley
Capital Group Inc., two of our Initial Shareholders that are
affiliated with the lead underwriters of this offering. The
agreement provided that we could borrow an aggregate principal
amount of up to $20&nbsp;million or up to $10&nbsp;million from
each lender, in two term loans, with each lender advancing one
half of the amount borrowed under each loan. The first term loan
was to expire on May&nbsp;10, 2002 and the second term loan was
to expire on September&nbsp;8, 2002. On May&nbsp;8, 2002, we
amended the term loan agreement to provide that such loans would
mature on the earlier of November&nbsp;11, 2002, or the fifth
day after the closing of an initial public offering of our
stock. These loans bore interest at the one-month LIBOR rate,
with interest to be compounded monthly and paid on the maturity
date. We borrowed $16.1&nbsp;million under the term loan
agreement in 2000, and the entire amount, including accrued
interest, of $16.5&nbsp;million was paid off in 2002. The term
loan expired on November&nbsp;11, 2002, all liens associated
with the loans have been released and we have no obligations
outstanding with respect to these loans.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Other</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
From time to time, we have received investment banking services
from Morgan Stanley&nbsp;&#38; Co. Incorporated and Goldman,
Sachs&nbsp;&#38; Co., the lead underwriters of this offering and
each an affiliate of one of our Initial Shareholders. From time
to time, we have also received consulting services from Goldman,
Sachs&nbsp;&#38; Co. and have entered into several foreign
exchange forward contracts with Morgan Stanley Capital Group Inc.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In connection with our launch of our electronic trade
confirmation service in April 2002, we entered into promotional
services agreements with J. Aron&nbsp;&#38; Company, an
affiliate of The Goldman Sachs Group, Inc., and Morgan Stanley
Capital Group Inc., two of our Initial Shareholders that are
also affiliated with the lead underwriters of this offering, and
the Gas and Power Firms. These agreements provided that these
signatories receive discount rates for use of our electronic
trade confirmation service through November 2003, and have since
expired. No firm commitments to use this service were made in
these agreements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Relationships with Certain Shareholders</B>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Order Flow Agreements</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We were a party to the following order flow agreements with our
Initial Shareholders, the Gas and Power Firms and other market
participants:
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <B><I>Global Precious Metals</I></B>&nbsp;&#151; Under these
    order flow agreements, the following parties were each obligated
    to execute trades in global precious metals products on our
    electronic platform covering 15&nbsp;million gold ounce
    equivalents per year: Deutsche Bank Sharps Pixley Inc., The
    Goldman Sachs Group, Inc., Morgan Stanley Capital Group Inc. and
    Soci&#233;t&#233; G&#233;n&#233;rale Financial Corporation, each
    of which is one of our Initial Shareholders. The order flow
    commitments for global precious metals trading became effective
    in September 2000 and expired in August 2002. In 2002, these
    shareholders</TD>
</TR>

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<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left">
    in the aggregate made order flow shortfall payments to us of
    $32,000 pursuant to these order flow agreements in global
    precious metal.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <B><I>Global Oil</I></B>&nbsp;&#151; Under these order flow
    agreements, the following parties were each obligated to execute
    trades in contracts for crude oil and related products on our
    electronic platform covering 500&nbsp;million barrel equivalents
    per year: BP International Limited, Elf Trading S.A., The
    Goldman Sachs Group, Inc., Morgan Stanley Capital Group Inc.,
    Soci&#233;t&#233; G&#233;n&#233;rale Financial Corporation and S
    T Exchange Inc., each of which is one of our Initial
    Shareholders or an affiliate of one of our Initial Shareholders.
    The order flow agreements for global oil became effective in
    November 2000 and expired in October 2002. In 2002 and 2001,
    these shareholders in the aggregate made order flow shortfall
    payments to us of $2.2&nbsp;million and $2.3&nbsp;million,
    respectively, pursuant to these order flow agreements in global
    oil.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <B><I>North American Natural Gas and Power</I></B>&nbsp;&#151;
    Under this order flow agreement, the Gas and Power Firms, which
    are shareholders of our Company, were obligated as a group to
    execute trades in North American natural gas and power contracts
    on our electronic platform covering, in the aggregate,
    48&nbsp;billion million British Thermal Units per year. The
    order flow agreement for North American natural gas and power
    became effective in July 2001 and expired in June 2003. In 2002,
    these shareholders in the aggregate made order flow shortfall
    payments to us of $6.4&nbsp;million pursuant to the order flow
    agreement in North American natural gas and power.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <B><I>European Gas and Power</I></B>&nbsp;&#151; The following
    shareholder affiliates were each obligated to execute trades in
    European gas and power contracts on our electronic platform
    which would result in annual minimum commission payments of
    &#163;200,000 in commission revenues per year: BP Gas Marketing
    Limited, Shell Energy Trading Limited, Gaseyls (an affiliate of
    Soci&#233;t&#233; G&#233;n&#233;rale) and TotalFinaElf
    Gas&nbsp;&#38; Power Limited. Non-shareholding market
    participants were also parties to these agreements. The order
    flow agreements became effective in January 2002 with respect to
    European gas contracts, were amended in April and May of 2003 to
    include European power contracts, and expired in December 2004.
    The order flow agreements also provided for revenue sharing
    arrangements that survive the expiration of the agreements and
    continue annually through 2006. Pursuant to these arrangements,
    if an order flow provider meets a threshold for trading volumes
    generated in a given period, ranging from 1.5&nbsp;billion
    therms to 3.0&nbsp;billion therms, that provider is entitled to
    share in a pool of 20% of our total commission revenues derived
    from trading in European gas products for that period by all
    participants, including those that are not or were not parties
    to the order flow agreements. As of December&nbsp;31, 2003, none
    of the order flow providers qualified as eligible order flow
    providers in accordance with the threshold and we are no longer
    required to accrue or pay any revenue sharing amounts under
    these agreements. The order flow providers also received access
    to a specialized application programming interface, or API, that
    allows our participants to link their computer systems to our
    electronic platform. European gas order flow agreements were
    entered into with one Initial Shareholder, Morgan Stanley
    Capital Group Inc. and one affiliate of an Initial Shareholder,
    J. Aron&nbsp;&#38; Company, which was similar to the other
    European gas commitments, except that minimum commitments and
    shortfalls were determined monthly and these order flow
    providers did not participate in the revenue sharing
    arrangement. In 2004, 2003 and 2002, we recognized
    $1.1&nbsp;million, $703,000 and $1.1&nbsp;million, respectively,
    in order flow shortfall revenues, including $540,000, $409,000
    and $728,000, respectively, relating to our shareholders.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We received total consolidated revenues of $29.4&nbsp;million,
$34.0&nbsp;million and $63.5&nbsp;million during 2004, 2003 and
2002, respectively, from our Initial Shareholders, the Gas and
Power Firms, or affiliates of those entities. These revenues
were derived from all shareholders that own in excess of 1% of
our stock. Revenues from one of the Gas and Power Firms
comprised 10.0% of our total consolidated revenues during 2002.
No other shareholder accounted for more than 10% of total
consolidated revenues during 2004, 2003 or 2002.
</DIV>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Registration Rights</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In connection with this offering, we intend to enter into a
registration rights agreement with CPEX, which owns
approximately &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of our common stock outstanding, and substantially all of the
</DIV>

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equity interests in CPEX are owned by Mr.&nbsp;Sprecher, our
chief executive officer, and members of his family. Under this
agreement, CPEX, or Mr.&nbsp;Sprecher, will be entitled to
require us to register the common stock CPEX currently holds for
resale into the public market, but only if
Mr.&nbsp;Sprecher&#146;s employment has been terminated by us
without cause or by him for good reason.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, we intend to enter into a registration rights
agreement with designated shareholders who may acquire new
common stock upon the conversion of shares of their
Class&nbsp;A2 common stock. The agreement will provide for the
registration under the Securities Act and the offering of common
stock from time to time following this offering, and will
contain provisions relating to demand rights, piggy-back rights,
conversion rights and lock-ups, among others.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Shareholders&#146; Agreement</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On June&nbsp;14, 2001, the Initial Shareholders and Gas and
Power Firms entered into a Shareholders&#146; Agreement. This
agreement provides, among other things, that the Gas and Power
Firms as a group may nominate four directors to our board of
directors and each of BP Exploration&nbsp;&#38; Oil, Inc., CPEX,
Elf Trading Inc., The Goldman Sachs Group, Inc., Morgan Stanley
Capital Group Inc., Soci&#233;t&#233; G&#233;n&#233;rale
Financial Corporation and S T Exchange Inc., or the Nominating
Shareholders, may each nominate one director, and that all
parties to the agreement would vote their shares in favor of
each other&#146;s nominee. This agreement also provided that the
Nominating Shareholders would nominate and elect the chief
executive officer and the chairman of IPE Holdings Plc to our
board of directors as long as our Class&nbsp;B redeemable common
stock remained outstanding. Pursuant to this agreement, since
the elimination of our Class&nbsp;B redeemable common stock, the
Nominating Shareholders have been required to nominate either
the chief executive officer or the chairman of IPE Holdings Plc
to our board of directors, rather than both. This agreement also
provides for the Gas and Power Firms to receive shares from the
Initial Shareholders in order to ensure that the value of their
shares is not diluted. In addition, the agreement places
restrictions on the use of proxies and voting trusts with
unaffiliated entities. The Shareholders&#146; Agreement will
terminate upon the closing of this offering.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Loan to Mr.&nbsp;Sprecher</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In December 2001, our board of directors agreed to loan
Mr.&nbsp;Sprecher, our chief executive officer, an amount
corresponding to the income tax liability that accrued in CPEX
as a result of CPEX&#146;s ownership interest in our business
from the time of the formation of IntercontinentalExchange, LLC
until our assumption of corporate form on June&nbsp;15, 2001.
This loan was made pursuant to the requirements of the limited
liability company operating agreement of
IntercontinentalExchange, LLC, dated as of May&nbsp;11, 2000. As
of December 2001, CPEX had accrued a tax liability of $503,000.
The board of directors agreed to forgive this loan over a
five-year period, with the first installment (20% of the
$503,000 tax liability) forgiven in December 2001, and the
remaining amount forgiven in equal installments in December of
each of the four following years, provided that
Mr.&nbsp;Sprecher continued to serve as our chief executive
officer. The board also agreed to gross up
Mr.&nbsp;Sprecher&#146;s compensation for the tax liability
associated with this loan forgiveness. In December 2004, the
board accelerated forgiveness of the final two installments. As
a result, no balance remained outstanding with respect to this
loan as of December&nbsp;31, 2004. The amounts forgiven under
this arrangement and related gross ups are included in
Mr.&nbsp;Sprecher&#146;s compensation as described under the
heading &#147;Management&nbsp;&#151; Executive
Compensation&#148;.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Relationships with Our Directors</B>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>CCX Agreement</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
One of our directors, Richard L. Sandor, is also the Chairman,
Chief Executive Officer and principal owner of the Chicago
Climate Exchange, Inc., or CCX, which operates futures and OTC
markets for the trading of emissions. In July 2003, we entered
into an agreement with CCX to provide hosting services for the
trading of CCX emissions on our electronic platform. Under this
agreement, CCX is required to pay us an annual license fee of
$725,000 and an annual service fee of $500,000. CCX is also
required to pay us for certain technology development work at an
agreed upon rate. In 2004 and 2003, CCX paid us
$1.7&nbsp;million and
</DIV>

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$605,000, respectively, pursuant to this agreement. The initial
term of this agreement expires in December 2006. The terms of
this agreement provide for automatic renewal for additional one
year periods following the expiration of the initial term,
unless either party provides at least six months&#146; notice of
its intention not to renew.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In May 2004, we entered into a listing agreement with CCX under
which we agreed to allow CCX to make certain emissions contracts
available for trading in its emissions trading market, which we
host on our platform, and to delist such contracts from trading
on our platform. Pursuant to this agreement, CCX is obligated to
pay us 10% of the gross revenues earned by CCX in connection
with trading in these contracts.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In August 2004, we entered into a license agreement with CCX in
respect of certain CCX intellectual property relating to an
emission reduction trading system and method. Pursuant to our
agreement, CCX granted to us, our affiliates (including the IPE)
and any of our contractors, agents and service providers a
perpetual, non-exclusive, royalty-free license, including any
patents or related applications thereto, in relation to such
intellectual property. Pursuant to the terms of this agreement,
we also acknowledged CCX&#146;s ownership of the intellectual
property and agreed not to challenge the ownership, validity or
enforceability of the intellectual property.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, in August 2004, the IPE entered into a Cooperation
and Licensing Agreement with CCX. Pursuant to this agreement,
CCX and the IPE formed a cooperative relationship for the
purposes of promoting the development of a European emissions
trading market through, in particular, the trading of emissions
contracts on our electronic platform. The agreement provides for
CCX to fund IPE development and operating costs in relation to
the emissions contracts. CCX will then receive 75% of net
transaction fee income from the emissions contracts (after the
deduction of operating costs). In December 2004, the European
Climate Exchange, or ECX, which is a subsidiary of CCX, acceded
to the terms of the Cooperation and Licensing Agreement.
Emissions contracts refer to any cash or spot or futures
contract for European emissions allowances traded on our
platform pursuant to this agreement. Consistent with, and
subject to, its legal and regulatory obligations and the
provisions of this agreement, the IPE has agreed, among other
obligations, to:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    use commercially reasonable efforts to cooperate with CCX in the
    design and listing of the emissions contracts;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    manage, in cooperation with us, the process of modifying our
    electronic platform and other hardware and software as necessary
    to allow the trading of the emissions contracts;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    provide required market supervision, compliance and regulatory
    arrangements;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    obtain the necessary regulatory approvals to allow the trading
    of the emissions contracts from trading screens located in the
    United Kingdom, Germany, France, the Netherlands, Switzerland,
    Sweden, Norway, the United States, and such other countries as
    the IPE and CCX from time to time agree.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The initial term of this agreement concludes on the later of
December&nbsp;31, 2007 and the date on which Phase&nbsp;I of the
European Emissions Allowances Trading Scheme terminates, unless
sooner terminated pursuant to special termination provisions of
the agreement. The terms of this agreement provide for automatic
renewal periods of one year following the conclusion of the
initial term, unless terminated earlier by either party upon
written notice provided no later than twelve months prior to the
end of the initial term, or three months prior to the end of any
renewal period.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Financial Printing</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
One of our directors, Vincent Tese, is a member of the board of
directors of Bowne &#38;&nbsp;Co., Inc., a financial printer. We
have engaged the services of Bowne in connection with this
offering and expect to pay Bowne customary fees. We have not
made any payments under this arrangement to date.
</DIV>

<P align="center" style="font-size: 10pt;">129
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Intercompany Agreements</B>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>License and Services Agreements</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In May 2003, we entered into a Software License Agreement and an
Atlanta Services Agreement with our subsidiary, the IPE,
pursuant to which we provide the IPE with access to our
electronic platform. Pursuant to the Software License Agreement,
we have granted the IPE a license to use software related to our
electronic platform, which the IPE may sub-license to its
members and their participants. The Atlanta Services Agreement
requires us to provide hosting, helpdesk and other services to
the IPE. These agreements are designed to assist the IPE in
meeting certain of its regulatory obligations as an RIE. The IPE
is required to pay us for the license and related services
pursuant to the terms of the agreements, which have been set on
the same basis as we would negotiate with an unrelated third
party. Similar agreements exist between the IPE and two of our
other U.K.-based subsidiaries in respect of disaster recovery
services and U.K. helpdesk services.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Other</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Kelly&nbsp;L. Loeffler, a corporate officer and our vice
president, investor and public relations, is married to
Jeffrey&nbsp;C. Sprecher, our Chairman and Chief Executive
Officer. Since joining our company in September 2002,
Ms.&nbsp;Loeffler has reported directly to Richard&nbsp;V.
Spencer, our Chief Financial Officer. In 2004, Ms.&nbsp;Loeffler
received total cash compensation of approximately $200,000.
</DIV>

<P align="center" style="font-size: 10pt;">130

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>PRINCIPAL AND SELLING SHAREHOLDERS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The table below sets forth information regarding the beneficial
ownership of our common stock on an actual basis as of the date
of this prospectus (giving effect to
the &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;for
1 reverse stock split and assuming full conversion of all
outstanding Class&nbsp;A shares into shares of new common
stock), and as adjusted to reflect the sale of our common stock
in this offering with respect to:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    each person we know to be the beneficial owner of 5% or more of
    our outstanding shares of common stock;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    each of our executive officers named in the Summary Compensation
    Table above under the heading &#147;Management&#148;;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    each of our directors;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    all of our executive officers and directors as a group;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the selling shareholders.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The shares of common stock sold in the offering by the selling
shareholders will result from the conversion of Class&nbsp;A2
shares concurrently with the consummation of such sale. The
shareholders listed below will not own any shares of new common
stock until the first date designated for optional conversion.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Beneficial ownership is determined under the rules of the SEC
and generally includes voting or investment power over
securities. Except in cases where community property laws apply
or as indicated in the footnotes to this table, we believe that
each shareholder identified in the table possesses sole voting
and investment power over all shares of common stock shown as
beneficially owned by the shareholder. Percentage of beneficial
ownership is based
on &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of common stock outstanding as of the date of this prospectus.
Shares of common stock subject to options that are currently
exercisable or exercisable within 60&nbsp;days of the date of
this prospectus are considered outstanding and beneficially
owned by the person holding the options for the purpose of
computing the percentage ownership of that person but are not
treated as outstanding for the purpose of computing the
percentage ownership of any other person. This table does not
reflect &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
that the underwriters have an option to purchase from the
selling shareholders. As of the date of this prospectus, our
common stock was held by 115&nbsp;shareholders of record. Unless
indicated below, the address of each individual listed below is
2100 RiverEdge Parkway, Suite&nbsp;500, Atlanta, Georgia 30328.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="46%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Shares Beneficially Owned</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Shares Beneficially</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Before the Offering</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Owned After the</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Offering</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Class&nbsp;A</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Common Stock</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Shares</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Common Stock</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Being</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="left" nowrap><B>Name and Address of Beneficial Owner</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Shares</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Percentage</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Offered</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Shares</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Percentage</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Morgan Stanley Capital Group Inc.<BR>
    2000 Westchester Avenue, Floor&nbsp;1,<BR>
    Purchase, NY 10577</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14.85</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    The Goldman Sachs Group, Inc.<BR>
    85 Broad Street<BR>
    New York, NY 10004</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14.24</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total Investments USA Inc.<BR>
    1105 N. Market Street, Suite 1442,<BR>
    Wilmington, DE 19899</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9.44</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    BP Exploration and Oil Inc.<BR>
    28100 Torch Parkway<BR>
    Warrenville, IL 60555</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.84</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Soci&#233;t&#233; G&#233;n&#233;rale Financial Corporation<BR>
    Decc/Cot Tour Soci&#233;t&#233; G&#233;n&#233;rale<BR>
    17 Cours Valmy 92987<BR>
    Paris Le Defense Cedex France</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.27</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;">131

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="40%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Shares Beneficially Owned</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Shares Beneficially</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Before the Offering</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Owned After the</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Offering</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Class&nbsp;A</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Common Stock</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Shares</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Common Stock</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Being</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="3" align="left" nowrap><B>Name and Address of Beneficial Owner</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Shares</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Percentage</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Offered</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Shares</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Percentage</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    S T Exchange Inc.<BR>
    80 Strand<BR>
    London WC2R OZA<BR>
    United Kingdom</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6.80</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    AEP Energy Services<BR>
    1 Riverside Plaza<BR>
    Columbus, OH 43215-2373</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.60</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Mirant Americas Energy<BR>
    Marketing, LP<BR>
    1155 Perimeter Center, West Suite 130<BR>
    Atlanta, GA 30338</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,143,166</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.27</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Duke Energy Trading Exchange, LLC(1)<BR>
    5400 Westheimer<BR>
    Houston, TX 77056</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,648,094</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.04</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    CPEX(1)(2) C/O<BR>
    IntercontinentalExchange<BR>
    2100 RiverEdge Parkway, Suite&nbsp;500<BR>
    Atlanta, GA 30328</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,961,298</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.71</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    El&nbsp;Paso Merchant Energy North America Company(1)<BR>
    PO Box 2511,<BR>
    Houston, TX 77252-2511</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,791,122</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.63</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="23">&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Directors and Executive Officers</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Charles R. Crisp(6)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>*</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Jean-Marc Forneri(6)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>*</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    David S. Goone(3)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>*</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Edwin Marcial(3)(5)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>*</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Sir Robert Reid(6)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>*</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Frederic V. Salerno(6)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>*</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Richard L. Sandor(6)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>*</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Johnathan H. Short(3)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>*</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Richard V. Spencer(3)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>*</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Jeffrey C. Sprecher(2)(3)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>*</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Judith A. Sprieser(6)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>*</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Vincent Tese(6)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>*</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Charles A. Vice(3)(4)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>*</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Richard Ward(3)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    International House<BR>
    1 St Katherine&#146;s Way<BR>
    London E1W1UY<BR>
    United Kingdom</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>*</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    All directors and executive officers as a group (14 persons):</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Selling shareholders as a group</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="1%"></TD>
    <TD width="4%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>*</TD>
    <TD align="left">
    Represents less than 1%.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    Although these parties are not five percent shareholders, they
    are included in this table because they are part of a
    shareholders&#146; agreement with the five percent shareholders.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">132

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    CPEX figures
    include &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of
    our common shares held by CPEX,
    and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;stock
    options that are exercisable within 60&nbsp;days of the date of
    this prospectus. Pursuant to the CPEX Stock Option Plan, CPEX
    granted options on shares owned by CPEX to eight employees, two
    of whom are current executive officers of our company. As of the
    date of this prospectus, there are options
    on &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    of our stock owned by CPEX under the CPEX Stock Option Plan.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(3)&nbsp;</TD>
    <TD align="left">
    Executive officer beneficial ownership levels include stock
    options exercisable within 60&nbsp;days of the date of this
    prospectus under the 2000 Stock Option Plan, and restricted
    stock unit awards that vest within 60&nbsp;days of the date of
    this prospectus, under the 2004 Restricted Stock Plan.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(4)&nbsp;</TD>
    <TD align="left">
    Mr.&nbsp;Vice also holds exercisable options
    for &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of
    CPEX&#146;s equity interest in our business pursuant to the CPEX
    Stock Option Plan. These options may be exercised by payment to
    CPEX and will have no effect on the dilution of our common stock.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(5)&nbsp;</TD>
    <TD align="left">
    Mr.&nbsp;Marcial also holds exercisable options
    for &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of
    CPEX&#146;s equity interest in our business pursuant to the CPEX
    Stock Option Plan. These options may be exercised by payment to
    CPEX and will have no effect on the dilution of our common stock.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(6)&nbsp;</TD>
    <TD align="left">
    Director beneficial ownership levels include stock options
    exercisable within 60&nbsp;days of the date of this prospectus
    under the 2000 Stock Option Plan, restricted stock unit awards
    that vest within 60&nbsp;days of the date of this prospectus
    under the 2004 Restricted Stock Plan, and restricted stock unit
    awards that vest within 60&nbsp;days of the date of this
    prospectus under the 2003 Directors Plan.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">133

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<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>ORGANIZATION AND RECAPITALIZATION</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Formation of IntercontinentalExchange, Inc.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On May&nbsp;11, 2000, IntercontinentalExchange LLC, or the LLC,
our predecessor entity, was formed as a Delaware limited
liability company. Subsequent to its formation, the LLC created
a wholly-owned subsidiary, IntercontinentalExchange, Inc., a
Delaware corporation, to provide stock options to our employees.
The original members of the LLC were BP Exploration&nbsp;&#38;
Oil Inc., Continental Power Exchange, Inc., Deutsche Bank Sharps
Pixely Inc., Elf Trading Inc., The Goldman Sachs Group, Inc.,
MHC Investment Company, Morgan Stanley Capital Group Inc.,
Soci&#233;t&#233; G&#233;n&#233;rale Financial Corporation and S
T Exchange Inc. Upon the LLC&#146;s formation, CPEX, a company
owned by our founder, chairman and chief executive officer,
Jeffrey C. Sprecher, contributed to the LLC all of its assets
and liabilities. At the same time, MHC Investment Company
contributed intellectual property rights related to our
electronic platform, and our Initial Shareholders entered into
order flow agreements with us, providing for these Initial
Shareholders to execute a minimum annual volume of transactions
through our electronic platform.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In November 2000, the original members of the LLC amended and
restated the LLC agreement to provide for the issuance of
additional membership interests to the Gas and Power Firms. The
Gas and Power Firms that are currently shareholders are: AEP
Energy Services, Inc., Duke Energy Trading Exchange, LLC,
El&nbsp;Paso Merchant Energy North America Company and Mirant
Americas Energy Marketing, L.P. Two additional Gas and Power
Firms, Aquila Southwest Processing, L.P. and Reliant Energy
Trading Exchange, Inc., are no longer shareholders. The Gas and
Power Firms entered into an order flow agreement providing for
these members, in the aggregate, to execute a minimum annual
volume of transactions on our electronic platform and they made
a combined $30.0&nbsp;million cash payment. In connection with
their acquisition of an interest in the LLC, the LLC granted the
Gas and Power Firms warrants to purchase additional membership
interests representing an additional 10% profit-sharing and
voting interest in our business, subject to dilution. The
warrants expired unvested on September&nbsp;30, 2004.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On June&nbsp;15, 2001, in connection with our acquisition of the
IPE described below, the LLC merged into its subsidiary,
IntercontinentalExchange, Inc., which was the surviving entity.
Each of the members of the LLC exchanged its rights and
interests in the LLC for a proportionate number of shares of
Class&nbsp;A common stock, Series&nbsp;2 of
IntercontinentalExchange, Inc., which we refer to as our
Class&nbsp;A2&nbsp;shares, and the LLC was dissolved.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Acquisition of IPE Holdings Plc/ Subsequent Redemption of
Class&nbsp;B Redeemable Common Stock</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On June&nbsp;18, 2001, we acquired IPE Holdings Plc in a
share-for-share exchange. IPE Holdings Plc is the owner of the
IPE. In this exchange, each IPE Holdings Plc shareholder
received one share of Class&nbsp;B redeemable common stock,
which we refer to as our Class&nbsp;B shares, and one share of
our Class&nbsp;A common stock, Series&nbsp;1, which we refer to
as our Class&nbsp;A1&nbsp;shares, in exchange for each of their
IPE Holdings Plc shares. Under the terms of the Class&nbsp;B
shares, the holders would have the right to require us to redeem
their shares one year after the IPE&#146;s two principal futures
contracts traded exclusively on our electronic platform for a
ten consecutive day period. The Class&nbsp;B shares were
redeemable at a price of $5.895&nbsp;per share, or
$67.5&nbsp;million in the aggregate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In November 2004, although the conditions for a redemption
callable by the holders of the Class&nbsp;B shares had not yet
been met, we determined that it was advisable to undertake an
early redemption of the Class&nbsp;B shares. Pursuant to an
amendment to our charter approved by our shareholders, we
undertook an early redemption of the Class&nbsp;B shares on
November&nbsp;23, 2004. In connection with the early redemption,
we redeemed the Class&nbsp;B shares of all holders at a price of
$5.895&nbsp;per share, for an aggregate redemption price of
$67.5&nbsp;million. The Class&nbsp;B shares cannot be reissued,
and upon their redemption became undesignated shares of common
stock.
</DIV>

<P align="center" style="font-size: 10pt;">134

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<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Recapitalization</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our board of directors has approved a plan for the
recapitalization of our outstanding equity that will take effect
upon the closing of this offering. This plan, which we refer to
as the recapitalization, will simplify our capital structure
following this offering and will bring our corporate governance
procedures in line with those of other public companies. The
recapitalization will include the following events:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <B><I>Creation of a new class of common stock.</I></B> Our
    charter will be amended and restated to provide for a new class
    of common stock, par value $0.01&nbsp;per share, which we refer
    to as our new common stock, to be issued to investors who
    purchase shares in this offering.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <B><I>Addition of an optional conversion right to the
    outstanding Class&nbsp;A1&nbsp;shares and
    Class&nbsp;A2&nbsp;shares.</I></B> Our charter will also be
    amended to provide holders of our outstanding
    Class&nbsp;A1&nbsp;shares and Class&nbsp;A2&nbsp;shares a right
    to convert these shares into shares of our new common stock at
    the holder&#146;s option, subject to such conditions as our
    board of directors may deem appropriate. All other rights and
    restrictions on our Class&nbsp;A1&nbsp;shares and
    Class&nbsp;A2&nbsp;shares will remain intact unless and until
    these shares are converted. The optional conversion right may be
    exercised by any holder of Class&nbsp;A2 shares as necessary to
    enable it to sell shares of new common stock in this offering
    and otherwise at any time (i)&nbsp;by any holder of
    Class&nbsp;A1 shares (other than holders who also own
    Class&nbsp;A2 shares) beginning on the date 90&nbsp;days after
    the completion of this offering or (ii)&nbsp;by any holder of
    Class&nbsp;A2 shares beginning on the date 180&nbsp;days after
    the completion of this offering.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <B><I>Creation of a new class of undesignated preferred
    stock.</I></B> Our charter will be amended to create a class of
    undesignated preferred stock, the terms of which may be
    established by our board of directors from time to time.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <B><I>Modification of our corporate governance
    provisions.</I></B> Our charter and bylaws will be amended and
    restated to add, delete and change various provisions relating
    to the governance of our company to include provisions customary
    for public companies, such as customary anti-takeover provisions.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <B><I>Other changes.</I></B> Our charter and bylaws will also be
    amended and restated to make other minor changes, such as:</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="5%"></TD>
    <TD width="1%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    a reclassification, or reverse stock split, of our authorized
    and outstanding Class&nbsp;A1&nbsp;shares and
    Class&nbsp;A2&nbsp;shares based on a ratio
    of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;;
    and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the removal of references to the Class&nbsp;B shares from the
    charter.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We describe the material terms of the amended and restated
charter and bylaws as they will be in effect as of the closing
of this offering under the heading &#147;Description of Capital
Stock&#148;.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The recapitalization, including all the steps discussed above,
will take effect upon the closing of this offering. We need to
obtain the approval of at least 75% of our shareholders (voting
as a single class) to carry out various aspects of the
recapitalization, and we expect to obtain all necessary
approvals prior to the closing. Consequently, all information in
this prospectus assumes that the recapitalization has occurred,
including the &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;for&nbsp;1
reverse stock split of the Class&nbsp;A common stock, unless
otherwise specified.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In this prospectus, we refer to our Class&nbsp;A1&nbsp;shares
and our Class&nbsp;A2&nbsp;shares, collectively, as our
Class&nbsp;A common stock. We refer to our Class&nbsp;A common
stock and shares of our new common stock, collectively, as our
common stock. Any shares of common stock to be sold by the
selling shareholders in this offering will be
Class&nbsp;A2&nbsp;shares held by such holder that will be
converted into shares of new common stock concurrently with the
closing of this offering.
</DIV>

<P align="center" style="font-size: 10pt;">135
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<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>DESCRIPTION OF CAPITAL STOCK</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>The following descriptions are summaries of the material
terms of our amended and restated charter and bylaws as each
will be in effect upon the closing of this offering. They may
not contain all of the information that is important to you. To
understand them fully, you should read our amended and restated
charter and bylaws, copies of which are filed with the SEC as
exhibits to the registration statement of which this prospectus
is a part. The following descriptions are qualified in their
entirety by reference to the amended and restated charter and
bylaws and applicable law.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Pursuant to our amended and restated charter, our authorized
capital stock consists of 300,000,000&nbsp;shares, each with a
par value of $0.01&nbsp;per share, of which:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    25,000,000&nbsp;shares are designated as preferred
    stock;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    275,000,000&nbsp;shares are designated as common stock, divided
    into the following classes:</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="5%"></TD>
    <TD width="1%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    are designated as common stock, which we refer to as new common
    stock, &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    of which will be outstanding upon the completion of this
    offering;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    are designated as Class&nbsp;A common stock, divided into two
    series: Class&nbsp;A, Series 1 common stock and Class&nbsp;A,
    Series&nbsp;2 common stock, of
    which &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares,
    respectively, will be outstanding upon the completion of this
    offering.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In this prospectus, unless the context otherwise requires, we
refer to the new common stock and the Class&nbsp;A common stock,
collectively, as our common stock. All outstanding shares of
common stock are, and the shares of common stock offered hereby
will be, when issued and sold, validly issued, fully paid and
nonassessable.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Preferred Stock</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our authorized capital stock includes 25,000,000&nbsp;shares of
preferred stock. Our board of directors is authorized to divide
the preferred stock into series and, with respect to each
series, to determine the designations and the powers,
preferences and rights, and the qualifications, limitations and
restrictions thereof, including the dividend rights, conversion
or exchange rights, voting rights, redemption rights and terms,
liquidation preferences, sinking fund provisions and the number
of shares constituting the series. Our board of directors could,
without shareholder approval, issue preferred stock with voting
and other rights that could adversely affect the voting power of
the holders of common stock and which could have certain
anti-takeover effects.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Subject to the rights of the holders of any series of preferred
stock, the number of authorized shares of any series of
preferred stock may be increased or decreased (but not below the
number of shares thereof then outstanding) by resolution adopted
by our board of directors and approved by the affirmative vote
of the holders of a majority of the voting power of all
outstanding shares of capital stock entitled to vote on the
matter, voting together as a single class.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Common Stock</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Except for the conversion rights and restrictions on transfer
relating to our Class&nbsp;A1&nbsp;shares and our Class
A2&nbsp;shares and other matters described below, and subject to
the rights and preferences of the holders of preferred stock at
any time outstanding, our new common stock, our
Class&nbsp;A1&nbsp;shares and our Class&nbsp;A2&nbsp;shares have
the same rights and privileges and rank equally, share ratably
and are identical in respect as to all matters, including rights
in liquidation.
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Voting:</I> Each holder of shares of new common stock and
    Class&nbsp;A common stock is entitled to one vote for each share
    owned of record on all matters submitted to a vote of
    shareholders. Except as otherwise required by law or as
    described below, holders of shares of new common stock,
    Class&nbsp;A1&nbsp;shares and Class&nbsp;A2&nbsp;shares will
    vote together as a single class on all matters presented to the
    stockholders for their vote or approval, including the election
    of directors.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">136

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
 There are no cumulative voting rights. Accordingly, the holders
of a majority of the total shares of new common stock,
Class&nbsp;A1&nbsp;shares and Class&nbsp;A2&nbsp;shares voting
for the election of directors can elect all the directors if
they choose to do so, subject to the voting rights of holders of
any preferred stock to elect directors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
 In the event of a class or series vote to approve a change in
the rights or special powers of any class or series of
Class&nbsp;A common stock, two-thirds of the affected class or
series must approve the change, except that in the case of an
amendment to the rights or special powers of the
Class&nbsp;A1&nbsp;shares, the holders of
Class&nbsp;A1&nbsp;shares who also hold
Class&nbsp;A2&nbsp;shares and their affiliates are excluded.
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Dividends and distributions:</I> The holders of shares of new
    common stock and Class&nbsp;A common stock have an equal right
    to receive dividends and distributions, whether payable in cash
    or otherwise, as may be declared from time to time by our board
    of directors from legally available funds. If a dividend or
    distribution is payable on the Class&nbsp;A common stock, we
    must also make a pro rata and simultaneous dividend or
    distribution on the new common stock. Conversely, if a dividend
    or distribution is paid or payable on the new common stock, we
    must also make a pro rata and simultaneous dividend or
    distribution on the Class&nbsp;A common stock.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Liquidation, dissolution or winding-up:</I> In the event of
    our liquidation, dissolution or winding-up, holders of the
    shares of new common stock and Class&nbsp;A common stock are
    entitled to share equally, share-for-share, in the assets
    available for distribution after payment of all creditors and
    the liquidation preferences of our preferred stock.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Restrictions on transfer:</I> Our charter continues to
    restrict the transfer of shares of Class&nbsp;A common stock.
    Class&nbsp;A1&nbsp;shares may be transferred only with the
    board&#146;s consent, which may not be unreasonably withheld.
    Class&nbsp;A2&nbsp;shares may be transferred only in accordance
    with our bylaws or with the approval of our board of directors,
    in its sole discretion, other than transfers to an affiliate or
    to another holder of Class&nbsp;A2&nbsp;shares. Neither our
    charter nor our bylaws contain any restrictions on the transfer
    of shares of new common stock. In the case of any transfer of
    shares, there may be restrictions imposed by applicable
    securities laws. We describe these transfer restrictions under
    the heading &#147;Shares Eligible for Future Sale&#148;.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Redemption, conversion or preemptive rights:</I> Holders of
    shares of new common stock and Class&nbsp;A common stock have no
    redemption or conversion rights or preemptive rights to purchase
    or subscribe for our securities, except for holders of shares of
    our Class&nbsp;A common stock who have an optional conversion
    right to convert any shares of Class&nbsp;A common stock into
    shares of new common stock at a ratio of one-to-one, after
    giving effect to the reverse stock split. The board may specify
    any conditions to conversion the board deems to be appropriate
    and has determined that, other than shares of Class&nbsp;A
    common stock to be converted and sold by the selling
    shareholders in this offering, the holders of
    Class&nbsp;A1&nbsp;shares may only exercise the conversion right
    at any time or from time to time following the date 90&nbsp;days
    after the closing of this offering and the holders of
    Class&nbsp;A2&nbsp;shares may do so only following the date
    180&nbsp;days after the closing of this offering. Once
    authorized by the board, the shares of Class&nbsp;A common stock
    are convertible at the holder&#146;s option. Upon conversion,
    the shares of common stock would not be subject to restrictions
    on transfer that applied to the shares of Class&nbsp;A common
    stock prior to conversion, except to the extent such
    restrictions are imposed under applicable securities laws.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Other Provisions:</I> There are no redemption provisions or
    sinking fund provisions applicable to either the new common
    stock or the Class&nbsp;A common stock, nor is the new common
    stock or Class&nbsp;A common stock subject to calls or
    assessments by us.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The rights, preferences, and privileges of the holders of new
common stock and Class&nbsp;A common stock are subject to and
may be adversely affected by, the rights of the holders of any
series of preferred stock which we may designate and issue in
the future. As of the date of this prospectus, there are no
shares of preferred stock outstanding.
</DIV>

<P align="center" style="font-size: 10pt;">137

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<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Limitation of Liability and Indemnification Matters</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our charter provides that none of our directors will be liable
to us or our shareholders for monetary damages for breach of
fiduciary duty as a director, except in those cases in which
liability is mandated by the Delaware General Corporation Law,
or DGCL, and except for liability for breach of the
director&#146;s duty of loyalty, acts or omissions not in good
faith or involving intentional misconduct or a knowing violation
of law, or any transaction from which the director derived any
improper personal benefit. Our bylaws provide for
indemnification, to the fullest extent permitted by law, of any
person made or threatened to be made a party to any action, suit
or proceeding by reason of the fact that such person is or was
one of our directors or senior officers or, at our request,
serves or served as a director, officer, employee or agent of
any other enterprise, against all expenses, liabilities, losses
and claims actually incurred or suffered by such person in
connection with the action, suit or proceeding. Our bylaws also
provide that, to the extent authorized from time to time by our
board of directors, we may provide to any one or more other
persons rights of indemnification and rights to receive payment
or reimbursement of expenses, including attorneys&#146; fees.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Section&nbsp;203 of the Delaware General Corporation Law</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We are subject to the provisions of Section&nbsp;203 of the
DGCL. In general, Section&nbsp;203 prohibits a publicly held
Delaware corporation from engaging in a business combination
with an interested shareholder for a period of three years after
the date of the transaction in which the person became an
interested shareholder, unless the business combination is
approved in a prescribed manner. A business combination includes
a merger, asset sale or a transaction resulting in a financial
benefit to the interested shareholder. An interested shareholder
is a person who, together with affiliates and associates, owns
(or, in certain cases, within three years prior, did own) 15% or
more of the corporation&#146;s outstanding voting stock. Under
Section&nbsp;203, a business combination between us and an
interested shareholder is prohibited during the relevant
three-year period unless it satisfies one of the following
conditions:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    prior to the time the shareholder became an interested
    shareholder, our board of directors approved either the business
    combination or the transaction that resulted in the shareholder
    becoming an interested shareholder;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    on consummation of the transaction that resulted in the
    shareholder becoming an interested shareholder, the interested
    shareholder owned at least 85% of our voting stock outstanding
    at the time the transaction commenced (excluding, for purposes
    of determining the number of shares outstanding, shares owned by
    persons who are directors and officers);&nbsp;or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the business combination is approved by our board of directors
    and authorized at an annual or special meeting of the
    shareholders by the affirmative vote of at least
    66<FONT style="font-size: 70%"><SUP>2</SUP></FONT>/<FONT style="font-size: 60%">3</FONT>%
    of our outstanding voting stock that is not owned by the
    interested shareholder.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Certain Anti-Takeover Matters</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our charter and bylaws include a number of provisions that may
have the effect of encouraging persons considering unsolicited
tender offers or other unilateral takeover proposals to
negotiate with our board of directors rather than pursue
non-negotiated takeover attempts. These provisions include:
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Board of Directors</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Vacancies and newly created seats on our board may be filled
only by our board of directors. Only our board of directors may
determine the number of directors on our board. The inability of
shareholders to determine the number of directors or to fill
vacancies or newly created seats on the board makes it more
difficult to change the composition of our board of directors,
but these provisions promote a continuity of existing management.
</DIV>

<P align="center" style="font-size: 10pt;">138

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<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Advance Notice Requirements</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our bylaws establish advance notice procedures with regard to
shareholder proposals relating to the nomination of candidates
for election as directors or new business to be brought before
meetings of our shareholders. These procedures provide that
notice of such shareholder proposals must be timely given in
writing to our secretary prior to the meeting at which the
action is to be taken. Generally, to be timely, notice must be
received at our principal executive offices not less than
90&nbsp;days nor more than 120&nbsp;days prior to the first
anniversary date of the annual meeting for the preceding year.
The notice must contain certain information specified in the
bylaws.
</DIV>

<DIV style="margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Adjournment of Meetings of Shareholders Without a
    Shareholder Vote</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our bylaws permit the chairman of the meeting of shareholders,
who is appointed by the board of directors, to adjourn any
meeting of shareholders for a reasonable period of time without
a shareholder vote.
</DIV>

<DIV style="margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Special Meetings of Shareholders</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our bylaws provide that special meetings of the shareholders may
be called by the board of directors, the chairman of the board,
the chief executive officer, or at the request of holders of at
least 50% of the shares of common stock outstanding at the time.
</DIV>

<DIV style="margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>No Written Consent of Shareholders</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our charter requires all shareholder actions to be taken by a
vote of the shareholders at an annual or special meeting. Our
charter generally does not permit our shareholders to act by
written consent without a meeting, other than for certain class
votes by holders of the Class&nbsp;A common stock.
</DIV>

<DIV style="margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Amendment of Bylaws and Charter</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our charter requires the approval of not less than
66<FONT style="font-size: 70%"><SUP>2</SUP></FONT>/<FONT style="font-size: 60%">3</FONT>%
of the voting power of all outstanding shares of our capital
stock entitled to vote to amend any bylaw by shareholder action
or to amend the charter provisions described in this section.
This supermajority voting requirement makes it more difficult to
alter the anti-takeover provisions of our bylaws and our
charter. Our charter also authorizes the board of directors to
amend the bylaws at any time without shareholder action.
</DIV>

<DIV style="margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Blank Check Preferred Stock</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our charter provides for 25,000,000 authorized shares of
preferred stock. The existence of authorized but unissued shares
of preferred stock may enable the board of directors to render
more difficult or to discourage an attempt to obtain control of
us by means of a merger, tender offer, proxy contest or
otherwise. For example, if in the due exercise of its fiduciary
obligations, our board of directors were to determine that a
takeover proposal is not in our best interests, the board of
directors could cause shares of preferred stock to be issued
without shareholder approval in one or more private offerings or
other transactions that might dilute the voting or other rights
of the proposed acquirer or insurgent shareholder or shareholder
group. In this regard, the charter grants our board of directors
broad power to establish the rights and preferences of
authorized and unissued shares of preferred stock. The issuance
of shares of preferred stock could decrease the amount of
earnings and assets available for distribution to holders of
shares of common stock. The issuance may also adversely affect
the rights and powers, including voting rights, of such holders
and may have the effect of delaying, deterring or preventing a
change in control. The board of directors currently does not
intend to seek shareholder approval prior to any issuance of
shares of preferred stock, unless otherwise required by law.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Listing</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We will apply to have our common stock listed on the New York
Stock Exchange under the symbol &#147;ICE&#148;.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Transfer Agent</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The transfer agent for our common stock is Computershare
Investor Services.
</DIV>

<P align="center" style="font-size: 10pt;">139

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<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>SHARES ELIGIBLE FOR FUTURE SALE</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Prior to this offering, there has been no public market for our
common stock. Future sales of substantial amounts of common
stock (or Class&nbsp;A common stock prior to its conversion into
common stock) in the public market, or the perception that such
sales may occur, could adversely affect the market price of our
common stock.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Upon the completion of this offering, we will
have &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of common stock outstanding, which includes
the &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of new common stock sold by us in this
offering, &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class&nbsp;A1
shares
and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class&nbsp;A2
shares.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
All of the shares of our common stock to be sold in this
offering will be freely tradable without restriction or further
registration under the Securities Act of 1933, or the Securities
Act, except for any such shares that may be held or acquired by
our affiliates, as that term is defined in Rule&nbsp;144
promulgated under the Securities Act, which shares will be
subject to the volume limitations and other restrictions of
Rule&nbsp;144 described below.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Sales of Restricted Shares</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
An aggregate
of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of common stock
(representing &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class&nbsp;A1
shares
and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class&nbsp;A2
shares) held by our existing shareholders upon completion of
this offering will be &#147;restricted securities&#148;, as that
phrase is defined in Rule&nbsp;144. These shares may not be
resold in the absence of registration under the Securities Act
or pursuant to an exemption from such registration, including
among others, the exemptions provided by Rule&nbsp;144, 144(k)
or 701 under the Securities Act, which rules are summarized
below. Taking into account the lockup agreements described below
and the provisions of Rules&nbsp;144, 144(k) and
701, &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of Class&nbsp;A common stock will be available for sale in the
public market as follows:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class&nbsp;A1
    shares will be available for immediate sale on the date of this
    prospectus pursuant to Rule&nbsp;144(k); and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class&nbsp;A2
    shares will be available for sale after the date of this
    prospectus and the expiration date for the lockup agreements
    pursuant to Rule&nbsp;144(k).</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Assuming all outstanding Class&nbsp;A1 shares are converted into
shares of common
stock, &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of common stock will be available for sale beginning on the date
90&nbsp;days following the closing of this offering pursuant to
Rule&nbsp;144(k). Assuming all outstanding Class&nbsp;A2 shares
are converted into shares of common
stock, &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of common stock will be available for sale beginning on the date
180&nbsp;days following the closing of this offering pursuant to
Rule&nbsp;144(k).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Rule&nbsp;144</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In general, under Rule&nbsp;144 as currently in effect,
beginning 90&nbsp;days after the date of this prospectus, a
person who has beneficially owned restricted shares for at least
one year, including a person who may be deemed to be our
affiliate, would be entitled to sell within any three-month
period a number of shares that does not exceed the greater of:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    1.0% of the number of shares of common stock then outstanding,
    which will equal
    approximately &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    immediately after this offering; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the average weekly trading volume of our common stock on the New
    York Stock Exchange during the four calendar weeks before a
    notice of the sale on Form&nbsp;144 is filed.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For purposes of applying this volume limit, sales by certain
related persons and sales by persons acting in concert must be
aggregated. In addition, sales under Rule&nbsp;144 must be made
in unsolicited brokers&#146; transactions and must be disclosed
in a notice filing with the SEC. For an affiliate, some of these
requirements would also apply to sales of unrestricted shares.
</DIV>

<P align="center" style="font-size: 10pt;">140

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<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Rule&nbsp;144(k)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under Rule&nbsp;144(k), a person who is not deemed to have been
one of our affiliates at any time during the three months
preceding a sale, and who has beneficially owned the shares
proposed to be sold for at least two years, including the
holding period of any prior owner other than an affiliate, is
entitled to sell these shares without complying with the manner
of sale, public information, volume limitation or notice
provisions of Rule&nbsp;144.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Rule&nbsp;701</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Securities issued in reliance on Rule&nbsp;701, such as shares
of common stock acquired upon exercise of options granted under
our stock option plans, are also restricted and, beginning
90&nbsp;days after the effective date of this prospectus, may be
sold by shareholders other than our affiliates subject only to
the manner of sale provisions of Rule&nbsp;144 and by affiliates
under Rule&nbsp;144 without compliance with its one-year holding
period requirement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Lockup Agreements</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Notwithstanding the foregoing, we and the holders of
approximately &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
of our shares outstanding
and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
of our shares issuable under options and grants outstanding as
of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2005&nbsp;&#151; including our directors and officers, the
Initial Shareholders and the Gas and Power Firms&nbsp;&#151;
have agreed that, for a period of 180&nbsp;days following the
date of this prospectus, we and they will not, without the prior
written consent of Morgan Stanley&nbsp;&#38; Co. Incorporated
and Goldman, Sachs&nbsp;&#38; Co., dispose of, directly or
indirectly (including by means of any hedge that results in a
short sale or any swap or other arrangement that transfers any
of the economic consequences of ownership of the shares to
another party), any shares of our common stock, any option to
acquire our common stock or any securities convertible into or
exchangeable for our common stock, subject to certain exceptions
including:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    sales made in this offering and the conversion of
    Class&nbsp;A2&nbsp;shares into new common stock in connection
    therewith;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    in our case, issuances upon exercise of outstanding options or
    pursuant to existing employee plans.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
However, Morgan Stanley&nbsp;&#38; Co. Incorporated and Goldman,
Sachs&nbsp;&#38; Co., in their sole discretion, may release any
of the securities subject to lockup agreements, at any time
without notice.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Additional Shares that May be Registered</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In connection with this offering, we intend to enter into a
registration rights agreement with CPEX, which
owns &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of our Class&nbsp;A common stock. Under this agreement, CPEX
will be entitled to require us to register the common stock CPEX
will receive upon conversion of the Class&nbsp;A2&nbsp;shares it
currently holds for resale into the public market. We also
intend to enter into a registration rights agreement with
holders of our Class&nbsp;A2&nbsp;shares for registration of up
to &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of common stock received upon conversion of Class&nbsp;A2
shares. For more detailed information regarding these
registration rights, see &#147;Certain Relationships and Related
Transactions&nbsp;&#151; Registration Rights Agreement&#148;.
Registration of these shares under the Securities Act would
result in such shares becoming freely tradable without
restriction under the Securities Act, except for shares
purchased by &#147;affiliates&#148;, as that term is defined in
Rule&nbsp;144, immediately upon the effectiveness of such
registration.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
After this offering, we intend to register
initially &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of our common stock, or
approximately &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
of the shares of our common stock that will be outstanding at
that time, for issuance upon the exercise of options granted
under our 2000 Stock Option Plan and 2004 Long-Term Incentive
Plan. We may increase the number of shares registered for this
purpose from time to time. Once we register these shares, they
can be sold in the public market upon issuance.
</DIV>

<P align="center" style="font-size: 10pt;">141

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<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>CERTAIN UNITED STATES TAX CONSEQUENCES</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>TO NON-U.S.&nbsp;HOLDERS OF COMMON STOCK</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
This section summarizes certain United States federal income and
estate tax consequences of the ownership and disposition of
common stock by a non-U.S.&nbsp;holder. You are a
non-U.S.&nbsp;holder if you are, for United States federal
income tax purposes:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    a nonresident alien individual;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    a foreign corporation;&nbsp;or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    an estate or trust that in either case is not subject to United
    States federal income tax on a net income basis on income or
    gain from common stock.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
This section does not consider the specific facts and
circumstances that may be relevant to a particular
non-U.S.&nbsp;holder and does not address the treatment of a
non-U.S.&nbsp;holder under the laws of any state, local or
foreign taxing jurisdiction. This section is based on the tax
laws of the United States, including the Internal Revenue Code
of 1986, as amended, existing and proposed regulations, and
administrative and judicial interpretations, all as currently in
effect. These laws are subject to change, possibly on a
retroactive basis.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If a partnership holds the common stock, the United States
federal income tax treatment of a partner will generally depend
on the status of the partner and the tax treatment of the
partnership. A partner in a partnership holding the common stock
should consult its tax advisor with regard to the United States
federal income tax treatment of an investment in the common
stock.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>You should consult a tax advisor regarding the United States
federal tax consequences of acquiring, holding and disposing of
common stock in your particular circumstances, as well as any
tax consequences that may arise under the laws of any state,
local or foreign taxing jurisdiction.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Dividends</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Except as described below, if you are a non-U.S.&nbsp;holder of
common stock, dividends paid to you are subject to withholding
of United States federal income tax at a 30% rate or at a lower
rate if you are eligible for the benefits of an income tax
treaty that provides for a lower rate. Even if you are eligible
for a lower treaty rate, we and other payors will generally be
required to withhold at a 30% rate (rather than the lower treaty
rate) on dividend payments to you, unless you have furnished to
us or another payor:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    a valid Internal Revenue Service Form&nbsp;W-8BEN or an
    acceptable substitute form upon which you certify, under
    penalties of perjury, your status as (or, in the case of a
    United States alien holder that is a partnership or an estate or
    trust, such forms certifying the status of each partner in the
    partnership or beneficiary of the estate or trust as) a
    non-United States person and your entitlement to the lower
    treaty rate with respect to such payments;&nbsp;or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    in the case of payments made outside the United States to an
    offshore account (generally, an account maintained by you at an
    office or branch of a bank or other financial institution at any
    location outside the United States), other documentary evidence
    establishing your entitlement to the lower treaty rate in
    accordance with U.S.&nbsp;Treasury regulations.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If you are eligible for a reduced rate of United States
withholding tax under a tax treaty, you may obtain a refund of
any amounts withheld in excess of that rate by filing a refund
claim with the United States Internal Revenue Service.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If dividends paid to you are &#147;effectively connected&#148;
with your conduct of a trade or business within the United
States, and, if required by a tax treaty, the dividends are
attributable to a permanent establishment that you maintain in
the United States, we and other payors generally are not
required to withhold tax from the
</DIV>

<P align="center" style="font-size: 10pt;">142

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<DIV align="left" style="font-size: 10pt;">
dividends, provided that you have furnished to us or another
payor a valid Internal Revenue Service Form&nbsp;W-8ECI or an
acceptable substitute form upon which you represent, under
penalties of perjury, that:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    you are a non-United States person;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the dividends are effectively connected with your conduct of a
    trade or business within the United States and are includible in
    your gross income.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&#147;Effectively connected&#148; dividends are taxed at rates
applicable to United States citizens, resident aliens and
domestic United States corporations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If you are a corporate non-U.S.&nbsp;holder, &#147;effectively
connected&#148; dividends that you receive may, under certain
circumstances, be subject to an additional &#147;branch profits
tax&#148; at a 30% rate or at a lower rate if you are eligible
for the benefits of an income tax treaty that provides for a
lower rate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Gain on Disposition of Common Stock</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If you are a non-U.S.&nbsp;holder, you generally will not be
subject to United States federal income tax on gain that you
recognize on a disposition of common stock unless:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the gain is &#147;effectively connected&#148; with your conduct
    of a trade or business in the United States, and the gain is
    attributable to a permanent establishment that you maintain in
    the United States, if that is required by an applicable income
    tax treaty as a condition for subjecting you to United States
    taxation on a net income basis; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    you are an individual, you hold the common stock as a capital
    asset, you are present in the United States for 183 or more days
    in the taxable year of the sale and certain other conditions
    exist.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If you are a corporate non-U.S.&nbsp;holder, &#147;effectively
connected&#148; gains that you recognize may also, under certain
circumstances, be subject to an additional &#147;branch profits
tax&#148; at a 30% rate or at a lower rate if you are eligible
for the benefits of an income tax treaty that provides for a
lower rate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Federal Estate Taxes</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Common stock held by a non-U.S.&nbsp;holder at the time of death
will be included in the holder&#146;s gross estate for United
States federal estate tax purposes, unless an applicable estate
tax treaty provides otherwise.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Backup Withholding and Information Reporting</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If you are a non-U.S.&nbsp;holder, you are generally exempt from
backup withholding and information reporting requirements with
respect to:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    dividend payments;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the payment of the proceeds from the sale of common stock
    effected at a United States office of a broker;</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
as long as the income associated with such payments is otherwise
exempt from United States federal income tax and the payor or
broker does not have actual knowledge or reason to know that you
are a United States person and you have furnished to the payor
or broker:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    a valid Internal Revenue Service Form&nbsp;W-8BEN or an
    acceptable substitute form upon which you certify, under
    penalties of perjury, that you are (or, in the case of a
    non-U.S.&nbsp;holder that is a partnership or an estate or
    trust, such forms certifying that each partner in the
    partnership or beneficiary of the estate or trust is) a
    non-United States person;&nbsp;or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    other documentation upon which it may rely to treat the payments
    as made to a non-United States person in accordance with
    U.S.&nbsp;Treasury regulations;&nbsp;or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    you otherwise establish an exemption.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">143

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Payment of the proceeds from the sale of common stock effected
at a foreign office of a broker generally will not be subject to
information reporting or backup withholding. However, a sale of
common stock that is effected at a foreign office of a broker
will be subject to information reporting and backup withholding
if:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the proceeds are transferred to an account maintained by you in
    the United States;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the payment of proceeds or the confirmation of the sale is
    mailed to you at a United States address;&nbsp;or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the sale has some other specified connection with the United
    States as provided in U.S.&nbsp;Treasury regulations;</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
unless the broker does not have actual knowledge or reason to
know that you are a United States person and the documentation
requirements described above are met or you otherwise establish
an exemption.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, a sale of common stock will be subject to
information reporting if it is effected at a foreign office of a
broker that is:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    a United States person;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    a controlled foreign corporation for United States tax purposes;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    a foreign person 50% or more of whose gross income is
    effectively connected with the conduct of a United States trade
    or business for a specified three-year period;&nbsp;or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    a foreign partnership, if at any time during its tax year:</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="5%"></TD>
    <TD width="1%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    one or more of its partners are &#147;U.S.&nbsp;persons&#148;,
    as defined in U.S.&nbsp;Treasury regulations, who in the
    aggregate hold more than 50% of the income or capital interest
    in the partnership;&nbsp;or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    such foreign partnership is engaged in the conduct of a United
    States trade or business,</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
unless the broker does not have actual knowledge or reason to
know that you are a United States person and the documentation
requirements described above are met or you otherwise establish
an exemption. Backup withholding will apply if the sale is
subject to information reporting and the broker has actual
knowledge that you are a United States person.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
You generally may obtain a refund of any amounts withheld under
the backup withholding rules that exceed your income tax
liability by filing a refund claim with the Internal Revenue
Service.
</DIV>

<P align="center" style="font-size: 10pt;">144

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>UNDERWRITING</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
IntercontinentalExchange, the selling shareholders and the
underwriters for this offering named below have entered into an
underwriting agreement with respect to the shares being offered.
Subject to certain conditions, each underwriter has severally
agreed to purchase, and IntercontinentalExchange and the selling
shareholders have agreed to sell, the number of shares indicated
in the following table. Morgan Stanley&nbsp;&#38; Co.
Incorporated and Goldman, Sachs&nbsp;&#38; Co. are acting as
joint book-running managers of this offering and as the
representatives of the underwriters.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="81%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Number of</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2" align="left" nowrap><B>Underwriters</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Shares</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Morgan Stanley&nbsp;&#38; Co. Incorporated</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Goldman, Sachs&nbsp;&#38; Co.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The underwriters are committed to take and pay for all of the
shares being offered, if any are taken, other than the shares
covered by the option described below unless and until this
option is exercised.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If the underwriters sell more shares than the total number set
forth in the table above, the underwriters have an option to buy
up to an
additional &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
from the selling shareholders to cover such sales. The
underwriters may exercise this option solely for the purpose of
covering over-allotments, if any, made in connection with the
offering of the shares of common stock offered by this
prospectus. They may exercise that option for 30&nbsp;days. If
any shares are purchased pursuant to this option, the
underwriters will severally purchase shares in approximately the
same proportion as set forth in the table above.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table shows the per share and total underwriting
discounts and commissions to be paid to the underwriters by
IntercontinentalExchange and the selling shareholders. For the
selling shareholders, such amounts are shown assuming both no
exercise and full exercise of the underwriters&#146; option to
purchase additional shares.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="40%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Price Paid by the Selling</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Shareholders</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Price Paid by</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>IntercontinentalExchange</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>No Exercise</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Full Exercise</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Per Share</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Shares sold by the underwriters to the public will initially be
offered at the initial public offering price set forth on the
cover of this prospectus. Any shares sold by the underwriters to
securities dealers may be sold at a discount of up to
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share from the initial public offering price. Any such
securities dealers may resell any shares purchased from the
underwriters to certain other brokers or dealers at a discount
of up to
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share from the initial public offering price. If all the shares
are not sold at the initial public offering price, the
representatives may change the offering price and the other
selling terms.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
IntercontinentalExchange and the holders of
approximately &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
of the shares outstanding
and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
of the shares issuable under options outstanding as
of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2005, including IntercontinentalExchange&#146;s directors and
officers, the Initial Shareholders and the Gas and Power Firms,
have agreed with the underwriters not to dispose of, directly or
indirectly (including by means of any hedge that results in a
short sale or any swap or other arrangement that transfers any
of the economic consequences of ownership of the shares to
another party), any shares of the common stock, any option to
acquire the common stock or any securities convertible into or
exchangeable for the common stock, for a period of 180&nbsp;days
following the date of this prospectus, without the prior written
consent of Morgan Stanley&nbsp;&#38; Co. Incorporated and
Goldman, Sachs&nbsp;&#38; Co., subject to certain exceptions,
including:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    sales made in this offering; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    in the case of IntercontinentalExchange, issuances upon exercise
    of outstanding options or pursuant to existing employee plans.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">145
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The 180-day restricted period described in the preceding
paragraph will be automatically extended if: (1)&nbsp;during the
last 17&nbsp;days of the 180-day restricted period,
IntercontinentalExchange issues an earnings release or announces
material news or a material event; or (2)&nbsp;prior to the
expiration of the 180-day restricted period,
IntercontinentalExchange announces that it will release earnings
results during the 15-day period following the last day of the
180-day period, in which case the restrictions described in the
preceding paragraph will continue to apply until the expiration
of the 18-day period beginning on the issuance of the earnings
release of the announcement of the material news or material
event.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Morgan Stanley&nbsp;&#38; Co. Incorporated and Goldman,
Sachs&nbsp;&#38; Co., in their discretion, may release any of
the securities subject to the lockup agreements, at any time
without notice.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
At the request of IntercontinentalExchange, the underwriters
have reserved up
to &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of common stock offered by this prospectus for sale, at the
initial public offering price, to its directors, officers,
employees and friends through a directed share program.
IntercontinentalExchange cannot assure you that any of the
reserved shares will be purchased. The number of shares of
common stock available for sale to the general public in the
public offering will be reduced to the extent these persons
purchase these reserved shares. Any shares not so purchased will
be offered by the underwriters to the general public on the same
basis as the other shares offered hereby.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
IntercontinentalExchange will apply to list the common stock on
the New York Stock Exchange under the symbol &#147;ICE&#148;. In
order to meet one of the requirements for listing the common
stock on the New York Stock Exchange, the underwriters have
undertaken to sell round lots of 100 or more shares to a minimum
of 2,000 beneficial holders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Prior to the offering, there has been no public market for the
shares. The initial public offering price will be negotiated
among IntercontinentalExchange and the representatives. Among
the factors to be considered in determining the initial public
offering price of the shares, in addition to prevailing market
conditions, will be IntercontinentalExchange&#146;s historical
performance, estimates of its business potential and its
earnings prospects, an assessment of its management and the
consideration of the above factors in relation to market
valuation of companies in related businesses.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In connection with the offering, the underwriters may purchase
and sell shares of common stock in the open market. These
transactions may include short sales, stabilizing transactions
and purchases to cover positions created by short sales. Shorts
sales involve the sale by the underwriters of a greater number
of shares than they are required to purchase in the offering.
&#147;Covered&#148; short sales are sales made in an amount not
greater than the underwriters&#146; option to purchase
additional shares in the offering. The underwriters may close
out any covered short position by either exercising their option
to purchase additional shares or purchasing shares in the open
market. In determining the source of shares to close out the
covered short position, the underwriters will consider, among
other things, the price of shares available for purchase in the
open market as compared to the price at which they may purchase
shares through the overallotment option. &#147;Naked&#148; short
sales are any sales in excess of such option. The underwriters
must close out any naked short position by purchasing shares in
the open market. A naked short position is more likely to be
created if the underwriters are concerned that there may be
downward pressure on the price of the common stock in the open
market after pricing that could adversely affect investors who
purchase in the offering. Stabilizing transactions consist of
various bids for or purchases of common stock made by the
underwriters in the open market prior to the completion of this
offering.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The underwriters may also impose a penalty bid. This occurs when
a particular underwriter repays to the underwriters a portion of
the underwriting discount received by it because the
representatives have repurchased shares sold by or for the
account of such underwriter in stabilizing or short covering
transactions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Purchases to cover a short position and stabilizing transactions
may have the effect of preventing or retarding a decline in the
market price of the company&#146;s stock, and together with the
imposition of the penalty bid, may stabilize, maintain or
otherwise affect the market price of the common stock. As a
result, the price of the common stock may be higher than the
price that otherwise might exist in the open market. If these
</DIV>

<P align="center" style="font-size: 10pt;">146

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<DIV align="left" style="font-size: 10pt;">
activities are commenced, they may be discontinued at any time.
These transactions may be effected on the New York Stock
Exchange, in the OTC market or otherwise.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Morgan Stanley&nbsp;&#38; Co. Incorporated and Goldman,
Sachs&nbsp;&#38; Co. may be deemed to be our
&#147;affiliates&#148;, as defined, by Rule&nbsp;2720 of the
Conduct Rules of the NASD (&#147;Rule&nbsp;2720&#148;).
Accordingly, this offering will be conducted in compliance with
the requirements of Rule&nbsp;2720. Under the provisions of
Rule&nbsp;2720, when an NASD member distributes securities of an
affiliate, the public offering price of the securities can be no
higher than that recommended by a &#147;qualified independent
underwriter&#148;, as such term is defined in Rule&nbsp;2720. In
accordance with such
requirements, &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;has
agreed to serve as a &#147;qualified independent
underwriter&#148; and has conducted due diligence and will
recommend a maximum price for the shares of common stock.
IntercontinentalExchange has agreed to
indemnify &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;for
acting as a &#147;qualified independent underwriter&#148;
against certain liabilities, including liabilities under the
Securities Act of 1933.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A prospectus in electronic format may be made available on the
websites maintained by one or more underwriters participating in
this offering. The underwriters may agree to allocate a number
of shares to underwriters for sale to their online brokerage
account holders. Internet distribution will be allocated by
Morgan Stanley&nbsp;&#38; Co. Incorporated and Goldman,
Sachs&nbsp;&#38; Co. to underwriters that may make Internet
distributions on the same basis as other allocations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
No sales may be made to discretionary accounts without the prior
written approval of the customer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
IntercontinentalExchange estimates that its share of the total
expenses of the offering, excluding underwriting discounts and
commissions, will be approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
IntercontinentalExchange and the selling shareholders have
agreed to indemnify the several underwriters against certain
liabilities, including liabilities under the Securities Act of
1933.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Two of IntercontinentalExchange&#146;s Initial Shareholders are
affiliates of Morgan Stanley&nbsp;&#38; Co. Incorporated and
Goldman, Sachs&nbsp;&#38; Co., the lead underwriters for this
offering. Upon the closing of this offering, each will own
approximately &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%,
respectively, of our common stock. The underwriters and their
affiliates have engaged in, and may in the future engage in,
investment banking and other commercial dealings in the ordinary
course of business with IntercontinentalExchange and its
affiliates. They have received customary fees and commissions
for these transactions.
</DIV>

<P align="center" style="font-size: 10pt;">147

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<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>VALIDITY OF THE COMMON STOCK</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The validity of the common stock offered hereby will be passed
upon for us by Sullivan&nbsp;&#38; Cromwell LLP, New York, New
York, and for the underwriters by Cleary Gottlieb
Steen&nbsp;&#38; Hamilton LLP, New York, New York.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>EXPERTS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our consolidated financial statements and schedule as of
December&nbsp;31, 2004 and 2003 and for each of the three years
in the period ended December&nbsp;31, 2004, all included in this
prospectus and registration statement, have been audited by
Ernst&nbsp;&#38; Young LLP, independent registered public
accounting firm, as set forth in their report. We have included
our consolidated financial statements and schedule in this
prospectus and elsewhere in the registration statement in
reliance on Ernst&nbsp;&#38; Young LLP&#146;s report, given on
their authority as experts in accounting and auditing.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>WHERE YOU CAN FIND MORE INFORMATION</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have filed with the SEC a registration statement on
Form&nbsp;S-1 under the Securities Act of 1933 that registers
the shares of our common stock to be sold in this offering. The
registration statement, including the attached exhibits and
schedules, contains additional relevant information about us and
our capital stock. The rules and regulations of the SEC allow us
to omit various information included in the registration
statement from this document. You may read and copy this
information at the public reference room of the SEC at
450&nbsp;Fifth Street, N.W., Room&nbsp;1024, Washington, D.C.
20549. You may also obtain copies of this information by mail
from the public reference section of the SEC, 450&nbsp;Fifth
St., N.W., Room&nbsp;1024, Washington, D.C. 20549, at prescribed
rates. You may obtain information on the operation of the public
reference rooms by calling the SEC at (800)&nbsp;SEC-0330. Our
filings with the SEC are also available to the public through
the SEC&#146;s internet site at http://www.sec.gov.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, upon completion of this offering, we will become
subject to the reporting and informational requirements of the
Securities Exchange Act of 1934, as amended, and, as a result,
will file periodic reports, proxy statements and other
information with the SEC. You will be able to read and copy
these reports, proxy statements and other information at the
addresses set forth above.
</DIV>

<P align="center" style="font-size: 10pt;">148
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>INDEX TO FINANCIAL STATEMENTS</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="90%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Page</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>IntercontinentalExchange, Inc.:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Report of Independent Registered Public Accounting Firm</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>F-2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Consolidated Balance Sheets as of December&nbsp;31, 2004 and 2003</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>F-3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Consolidated Statements of Income for the years ended
    December&nbsp;31, 2004, 2003 and 2002</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>F-4</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Consolidated Statements of Changes in Shareholders&#146; Equity
    for the years ended December&nbsp;31, 2004, 2003 and 2002</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>F-5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Consolidated Statements of Comprehensive Income for the years
    ended December&nbsp;31, 2004, 2003 and 2002</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>F-6</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Consolidated Statements of Cash Flows for the years ended
    December&nbsp;31, 2004, 2003 and 2002</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>F-7</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Notes to Consolidated Financial Statements</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>F-8</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;">F-1

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
Report of Independent Registered Public Accounting Firm
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
Board of Directors and Shareholders
</DIV>

<DIV align="left" style="font-size: 10pt;">
IntercontinentalExchange, Inc.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have audited the accompanying consolidated balance sheets of
IntercontinentalExchange, Inc. and Subsidiaries as of
December&nbsp;31, 2004 and 2003, and the related consolidated
statements of income, changes in shareholders&#146; equity,
comprehensive income, and cash flows for each of the three years
in the period ended December&nbsp;31, 2004. These financial
statements are the responsibility of the Company&#146;s
management. Our responsibility is to express an opinion on these
financial statements based on our audits.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We conducted our audits in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are
free of material misstatement. We were not engaged to perform an
audit of the Company&#146;s internal control over financial
reporting. Our audit included consideration of internal control
over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of
the Company&#146;s internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by
management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable
basis for our opinion.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated
financial position of IntercontinentalExchange, Inc. and
Subsidiaries at December&nbsp;31, 2004 and 2003, and the
consolidated results of their operations and their cash flows
for each of the three years in the period ended
December&nbsp;31, 2004, in conformity with U.S.&nbsp;generally
accepted accounting principles.
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    /s/ Ernst&nbsp;&#38; Young LLP</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
Atlanta, Georgia
</DIV>

<DIV align="left" style="font-size: 10pt;">
February&nbsp;16, 2005
</DIV>

<P align="center" style="font-size: 10pt;">F-2
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<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>IntercontinentalExchange, Inc. and Subsidiaries</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Consolidated Balance Sheets</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>(in thousands, except per share amounts)</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 9pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="69%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>ASSETS</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Current assets:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash and cash equivalents</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>61,199</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>44,913</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Restricted cash</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,421</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,797</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Short-term investments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,700</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Restricted short-term investments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Customer accounts receivable:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Trade, net of allowance for doubtful accounts of $171 and $123
    at December&nbsp;31, 2004 and 2003, respectively</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,330</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,854</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Related-parties</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,278</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,086</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred tax asset, net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>426</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>345</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Prepaid expenses and other current assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,688</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,898</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total current assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100,042</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>105,893</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Property and equipment, net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,364</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25,625</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other noncurrent assets:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Goodwill, net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>82,454</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>76,799</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other intangible assets, net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,621</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,649</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other noncurrent assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,037</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,913</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total other noncurrent assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>88,112</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>83,361</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>207,518</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>214,879</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="11">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>LIABILITIES AND SHAREHOLDERS&#146; EQUITY</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Current liabilities:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accounts payable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>829</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>551</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accrued salaries and benefits</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,145</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,061</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accrued liabilities (including $1,307 to a related-party at
    December&nbsp;31, 2004)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,431</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,638</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Income taxes payable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,709</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Current portion of revolving credit facility</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Current portion of obligations under capital leases</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>482</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,648</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred revenue</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,553</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,310</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total current liabilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34,440</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,917</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Noncurrent liabilities:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Obligations under capital leases</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>482</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Long-term portion of revolving credit facility</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred tax liability, net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,093</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,191</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other noncurrent liabilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,254</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,013</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total noncurrent liabilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23,347</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,686</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total liabilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>57,787</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>28,603</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Commitments and contingencies</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Class&nbsp;B redeemable common stock, $.01&nbsp;par value; none
    authorized, issued or outstanding at December&nbsp;31, 2004;
    11,450&nbsp;shares authorized, issued and outstanding at
    December&nbsp;31, 2003; $5.895&nbsp;per share redemption value</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>67,500</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="11">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>SHAREHOLDERS&#146; EQUITY</B>:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Class&nbsp;A, Series&nbsp;1 common stock, $.01&nbsp;par value;
    22,901&nbsp;shares authorized; 11,450&nbsp;shares issued and
    outstanding at December&nbsp;31, 2004 and 2003</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>115</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>115</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Class&nbsp;A, Series&nbsp;2 common stock, $.01&nbsp;par value;
    300,000&nbsp;shares authorized; 206,147 and 206,138&nbsp;shares
    issued at December&nbsp;31, 2004 and 2003, respectively, and
    200,010 and 200,001&nbsp;shares outstanding at December&nbsp;31,
    2004 and 2003, respectively</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,061</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,061</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Treasury stock, at cost; 6,137 Class&nbsp;A, Series&nbsp;2
    common stock shares at December&nbsp;31, 2004 and 2003</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(5,541</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(5,541</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Additional paid-in capital</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>53,484</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>47,043</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred stock compensation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6,087</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(34</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Retained earnings</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>71,172</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>49,223</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accumulated other comprehensive income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34,527</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25,909</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total shareholders&#146; equity</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>149,731</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>118,776</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total liabilities and shareholders&#146; equity</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>207,518</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>214,879</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="center" style="font-size: 10pt; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
See accompanying notes.
</DIV>

<P align="center" style="font-size: 10pt;">F-3

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>IntercontinentalExchange, Inc. and Subsidiaries</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Consolidated Statements of Income</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>(in thousands, except per share amounts)</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="64%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Year Ended December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2002</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Revenues:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Transaction fees, net (including $10,861, $11,556 and $52,785
    with related-parties in 2004, 2003 and 2002, respectively)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>90,906</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>81,434</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>118,794</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Data services fees (including $178 with related-parties in 2004)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,691</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,742</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,141</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Trading access fees</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,595</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,461</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>490</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other (including $1,869 and $605 with related-parties in 2004
    and 2003, respectively)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,222</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,109</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,065</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>108,414</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>93,746</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>125,490</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Operating expenses:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cost of hosting</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,279</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,715</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,962</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Compensation and benefits</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30,074</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26,236</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>27,906</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Professional services</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,523</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,138</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,876</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Selling, general and administrative</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,120</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,398</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,425</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Depreciation and amortization</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,024</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,341</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,368</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total operating expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>76,020</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>74,828</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>74,537</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Operating income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32,394</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,918</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>50,953</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other income (expense):</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,885</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,694</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,956</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest expense</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(137</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(80</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(400</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other expense, net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,420</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(666</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(64</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total other income, net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,328</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>948</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,492</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Income before income taxes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33,722</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,866</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>52,445</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Income tax expense</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,773</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,489</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,739</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Net income</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>21,949</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>13,377</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>34,706</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deduction for accretion of redeemable common stock</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,768</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,656</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income available to common shareholders</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>21,949</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>11,609</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>31,050</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Earnings per common share:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Basic and Diluted</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.14</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Weighted average common shares outstanding:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Basic</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>211,460</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>217,316</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>217,570</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Diluted</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>212,248</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>218,559</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>219,400</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="center" style="font-size: 10pt; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
See accompanying notes.
</DIV>

<P align="center" style="font-size: 10pt;">F-4

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>IntercontinentalExchange, Inc. and Subsidiaries</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Consolidated Statements of Changes in Shareholders&#146;
Equity</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>(in thousands)</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 8pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>


<TR style="font-size: 7pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Accumulated Other</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 7pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Comprehensive Income</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>


<TR style="font-size: 7pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Net Unrealized Gain</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 7pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center"><B>(Loss) from</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 7pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Class&nbsp;A, Series 1</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Class&nbsp;A, Series 2</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 7pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Common Stock</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Common Stock</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Treasury Stock</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Additional</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Deferred</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Foreign</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
</TR>

<TR style="font-size: 7pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Paid-in</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Stock</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Retained</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Currency</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Hedging</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Shareholders&#146;</B></TD><TD></TD>
</TR>

<TR style="font-size: 7pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Shares</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Value</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Shares</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Value</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Shares</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Value</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Capital</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Compensation</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Earnings</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Translation</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Derivatives</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Equity</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Balance, December&nbsp;31, 2001</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,450</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>115</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>206,106</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>2,061</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>22,943</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>6,564</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>3,087</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>34,770</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other comprehensive income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,134</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,134</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Exercise of common stock options</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>27</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>27</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34,706</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34,706</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accretion of Class&nbsp;B redeemable common stock</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,656</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,656</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Balance, December&nbsp;31, 2002</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,450</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>115</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>206,128</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,061</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22,970</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>37,614</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,221</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>75,981</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other comprehensive income (loss)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,129</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(441</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,688</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Exercise of common stock options</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Treasury shares received for order flow shortfall</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6,705</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6,053</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6,053</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Issuance of Class&nbsp;A, Series&nbsp;2&nbsp;shares</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>568</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>512</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>522</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Issuance of restricted stock</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>39</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(39</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Amortization of deferred compensation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Consolidation of variable interest entity</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,377</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,377</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accretion of Class&nbsp;B redeemable common stock</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,768</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,768</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Balance, December&nbsp;31, 2003</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,450</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>115</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>206,138</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,061</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6,137</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(5,541</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>47,043</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(34</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>49,223</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26,350</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(441</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>118,776</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other comprehensive income (loss)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,693</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,075</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,618</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Exercise of common stock options</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Issuance of restricted stock</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,427</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6,427</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Amortization of deferred compensation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>374</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>374</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21,949</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21,949</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Balance, December&nbsp;31, 2004</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,450</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>115</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>206,147</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>2,061</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6,137</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(5,541</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>53,484</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(6,087</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>71,172</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>37,043</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(2,516</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>149,731</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="center" style="font-size: 10pt; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
See accompanying notes.
</DIV>

<P align="center" style="font-size: 10pt;">F-5

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>IntercontinentalExchange, Inc. and Subsidiaries</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Consolidated Statements of Comprehensive Income</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>(in thousands)</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="65%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Year Ended December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2002</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>21,949</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>13,377</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>34,706</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other comprehensive income (loss):</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Foreign currency translation adjustments, net of tax of $344,
    $355 and $291 for the years ended December&nbsp;31, 2004, 2003
    and 2002, respectively</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,693</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,129</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,134</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Change in fair value of derivatives, net of tax of ($1,250) and
    ($266) for the years ended December&nbsp;31, 2004 and 2003,
    respectively</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,075</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(441</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Comprehensive income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>30,567</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>26,065</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>44,840</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="center" style="font-size: 10pt; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
See accompanying notes.
</DIV>

<P align="center" style="font-size: 10pt;">F-6

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B> IntercontinentalExchange, Inc. and Subsidiaries</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Consolidated Statements of Cash Flows</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>(in thousands)</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 9pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="58%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Year Ended December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2002</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Operating activities</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>21,949</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>13,377</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>34,706</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Adjustments to reconcile net income to net cash provided by
    operating activities:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Depreciation and amortization</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,024</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,341</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,368</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Amortization of revolving credit facility issuance costs</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Allowance for doubtful accounts</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(330</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>508</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net realized gains on sales of available-for-sale investments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(163</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(96</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(165</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accrued interest included in principal balance of
    related-parties notes payable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>264</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Amortization of deferred compensation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>374</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred taxes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(579</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(462</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,059</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Changes in assets and liabilities:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Customer accounts receivable:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Trade, net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,172</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,803</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,439</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Related-parties</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(192</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,114</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,180</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Prepaid expenses and other current assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,629</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,999</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,213</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Noncurrent assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>103</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>676</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>307</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accounts payable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>253</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(802</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(698</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Income taxes payable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>283</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,968</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,360</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred revenue</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>254</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>681</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(336</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accrued salaries and benefits, and other accrued liabilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,650</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,577</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,991</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total adjustments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,212</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,716</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,466</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net cash provided by operating activities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>40,161</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>27,093</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>51,172</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Investing activities</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Capital expenditures</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,703</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,606</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(14,770</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Capitalized software development costs</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,841</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(5,176</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6,021</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Purchase of trademarks and internet domain names</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(665</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash payments for order flow agreements</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(725</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Proceeds from sales of available-for-sale investments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30,463</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,096</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>49,165</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Purchases of available-for-sale investments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(24,000</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(19,000</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(53,000</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    (Increase) decrease in restricted cash</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,696</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,780</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>142</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net cash used in investing activities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,777</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(18,131</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(25,209</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Financing activities</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Proceeds from issuance of treasury shares</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>522</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Repayments of related-party notes payable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(16,465</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Payments on capital lease obligations</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,648</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,870</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,613</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Proceeds from revolving credit facility</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Issuance costs for revolving credit facility</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(190</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Redemption of Class&nbsp;B redeemable common stock</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(43,500</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Proceeds from exercise of common stock options</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>27</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net cash used in financing activities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(20,324</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,324</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(20,051</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Effect of exchange rate changes on cash and cash equivalents</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,226</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,648</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,105</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net increase in cash and cash equivalents</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,286</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,286</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,017</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash and cash equivalents, beginning of year</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>44,913</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33,627</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25,610</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash and cash equivalents, end of year</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>61,199</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>44,913</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>33,627</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Supplemental cash flow disclosure</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash paid for income taxes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>11,506</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>6,291</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>16,295</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash paid for interest</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>89</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>80</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>137</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Supplemental noncash investing and financing activities</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Restricted cash used for redemption of Class&nbsp;B redeemable
    common stock</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(24,000</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Proceeds from sales of available-for-sale restricted investments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>48,231</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Purchases of available-for-sale restricted investments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(24,000</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(24,000</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Issuance of restricted stock</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>6,427</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>39</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Consolidation of variable interest entity</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>24,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Treasury shares received for order flow shortfall</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>6,053</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Capital lease obligations issued for purchase of equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>1,344</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>6,020</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accretion of Class&nbsp;B redeemable common stock</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>1,768</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>3,656</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="center" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
See accompanying notes.
</DIV>

<P align="center" style="font-size: 10pt;">F-7

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>IntercontinentalExchange, Inc.</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>and Subsidiaries</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Notes to Consolidated Financial Statements</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>December&nbsp;31, 2004</B>
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>1.</B></TD>
    <TD>
    <B>Nature of Business and Organization</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
IntercontinentalExchange, Inc. (the &#147;Company&#148;) (a
Delaware corporation) owns and operates an Internet-based,
global electronic marketplace for facilitating trading in
futures and over-the-counter (&#147;OTC&#148;) commodities and
derivative financial products (the &#147;Platform&#148;). The
Company owns 100% of IPE Holding Plc, which is the sole
shareholder of the International Petroleum Exchange of London
Limited (the &#147;IPE&#148;). The IPE operates as a United
Kingdom (&#147;U.K.&#148;) Recognized Investment Exchange
(&#147;RIE&#148;) in London, England, for the purpose of trading
energy commodity futures and options contracts both
electronically through the Platform and through floor-based
open-outcry trading in London. Headquartered in Atlanta,
Georgia, the Company also has offices in London, New York,
Chicago, Houston, Singapore and recently opened a new office in
Calgary in January 2005.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company currently operates the Platform as an exempt
commercial market (&#147;ECM&#148;) pursuant to the Commodity
Exchange Act and regulations of the Commodity Futures Trading
Commission (&#147;CFTC&#148;). As an ECM, the Company is
required to file a notice with the CFTC, provide the CFTC with
access to its trading system and respond to requests for
information or records from the CFTC.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The IPE is subject to regulation in the U.K. by the Financial
Services Authority (&#147;FSA&#148;) in accordance with the
Financial Services and Markets Act 2000. The IPE is responsible
for maintaining financial resources sufficient for the proper
performance of its functions as an RIE, and, in order to satisfy
this requirement, is obligated to maintain a minimum amount of
liquid financial assets at all times.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company also owns 100% of IntercontinentalExchange Services,
Inc. (&#147;ICE Services US&#148;), The 10x Group, L.P. and The
10x Group (UK)&nbsp;L.L.P (collectively, &#147;10x&#148;),
IntercontinentalExchange Services (UK) Ltd. (&#147;ICE Services
UK&#148;) and IntercontinentalExchange Technologies Ltd.
(&#147;ICE Tech&#148;). ICE Services US is based in New York and
performs global marketing and business development services for
the Company, including, but not limited to, targeted promotions
and client development. 10x is a market data services company
based in Houston and London that offers subscriptions to OTC end
of day reports, market price validation (&#147;MPV&#148;)
curves, customized data packages, real-time IPE price
information through terminal and license fees and real-time view
only screen access to the Platform through WebICE. The IPE began
selling its market data services through 10x in November 2004.
WebICE is a web-based desktop service whose subscribers can view
every bid, offer and trade as well as depth of market across all
of the North American power and gas commodity markets traded on
the Platform. ICE Services UK, which is based in London,
supports trading of European energy commodities, performs
helpdesk functions and received authorization by the FSA in
January 2003 to act as an arranger of deals in investments. ICE
Tech operates the fully functional disaster recovery facility
for the Platform.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Summary of Significant
Accounting Policies</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Basis of Presentation</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The accompanying consolidated financial statements are presented
in accordance with U.S.&nbsp;generally accepted accounting
principles. The consolidated financial statements include the
accounts of the Company and its wholly-owned subsidiaries. All
intercompany balances and transactions between the Company and
its wholly-owned subsidiaries have been eliminated in
consolidation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Use of Estimates</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The preparation of financial statements in conformity with
U.S.&nbsp;generally accepted accounting principles requires the
Company&#146;s management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of
the financial statements.
</DIV>

<P align="center" style="font-size: 10pt;">F-8

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;">
<B>IntercontinentalExchange, Inc.</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>and Subsidiaries</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Notes to Consolidated Financial
Statements&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
Estimates also affect the reported amounts of expenses during
the reporting period. Actual amounts could differ from those
estimates.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Segment and Geographic Information</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company currently has two reportable operating segments: its
OTC business segment and its futures business segment. Both
segments operate across domestic and international markets.
Substantially all of the Company&#146;s identifiable assets are
in the U.S. and the U.K.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Cash and Cash Equivalents</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company considers all short-term, highly liquid investments
with original maturity dates of three months or less at the time
of purchase to be cash equivalents.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Short-Term Investments</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company invests a portion of its cash in excess of
short-term operating needs and a portion of its restricted cash
in U.S.&nbsp;AAA rated 28-day Auction Rate Securities
(&#147;ARS&#148;). The Company classifies these investments as
available-for-sale in accordance with Statement of Financial
Accounting Standards (&#147;SFAS&#148;) No.&nbsp;115,
<I>Accounting for Certain Investments in Debt and Equity
Securities</I>. ARS are long-term instruments whose interest
rates or dividends are reset frequently, usually every seven to
49&nbsp;days. The reset mechanism occurs via a Dutch auction,
wherein purchasers and sellers submit their orders for ARS to
registered broker-dealers. The highest bid that clears the
auction is the interest rate or dividend applied to the entire
issue until the next auction date. While there is no guarantee
that a sell order will be filled, it is rare for it not to be
filled due to the high credit quality of the ARS. Even though
the Company only purchases&nbsp;28-day auction rate issues, the
Company is required to classify these securities as short-term
investments instead of cash equivalents in the accompanying
consolidated balance sheets as the original maturity of the ARS
is in excess of 90&nbsp;days. As of December&nbsp;31, 2004, the
contractural maturities of these securities are in excess of ten
years. The ARS investments are classified as current assets
based upon the Company&#146;s intent and ability to use these
investments as necessary for short-term requirements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Available-for-sale investments are carried at their fair value.
Based on the short-term nature of these 28-day auction rate
issues and their market rates, the estimated fair value of the
ARS approximates carrying value. Therefore, the net unrealized
gains or losses are immaterial. Proceeds from sales of
available-for-sale investments, including the restricted
short-term investments, were $78.7&nbsp;million,
$11.1&nbsp;million and $49.2&nbsp;million during the years ended
December&nbsp;31, 2004, 2003 and 2002, respectively. Purchases
of available-for-sale investments, including the restricted
short-term investments, were $48.0&nbsp;million,
$43.0&nbsp;million and $53.0&nbsp;million during the years ended
December&nbsp;31, 2004, 2003 and 2002, respectively. Gross
realized gains on the short-term investments, including the
restricted short-term investments, were $394,000, $116,000 and
$165,000 during the years ended December&nbsp;31, 2004, 2003 and
2002, respectively, and have been classified as interest income
in the accompanying consolidated statements of income.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Restricted Cash and Restricted Short-Term Investments</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company classifies all cash and short-term investments that
are not available for general use by the Company, either due to
FSA requirements or through restrictions in specific agreements,
as restricted in the accompanying consolidated balance sheets
(Note&nbsp;3).
</DIV>

<P align="center" style="font-size: 10pt;">F-9

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;">
<B>IntercontinentalExchange, Inc.</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>and Subsidiaries</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Notes to Consolidated Financial
Statements&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Property and Equipment</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Property and equipment are recorded at cost, reduced by
accumulated depreciation (Note&nbsp;4). Depreciation and
amortization expense is computed using the straight-line method
based on estimated useful lives of the assets, or in the case of
leasehold improvements, the shorter of the initial lease term or
the estimated useful life of the asset. The Company reviews the
remaining estimated useful lives of its property and equipment
at each balance sheet date and will make adjustments to the
estimated remaining useful lives whenever events or changes in
circumstances indicate that the remaining useful lives have
changed. Gains on disposals of property and equipment are
included in other income and losses on disposals of property and
equipment are included in depreciation expense. Maintenance and
repairs are expensed as incurred.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Software Development Costs</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company capitalizes costs, both internal and external direct
and incremental costs, related to software developed or obtained
for internal use in accordance with AICPA Statement of
Position&nbsp;98-1, <I>Accounting for Costs of Computer Software
Developed or Obtained for Internal Use</I>. Software development
costs incurred during the preliminary or maintenance project
stage are expensed as incurred, while costs incurred during the
application development stage are capitalized and are amortized
using the straight-line method over the useful life of the
software, not to exceed three years. Amortization of these
capitalized costs begins only when the software becomes ready
for its intended use. General and administrative costs related
to developing or obtaining such software are expensed as
incurred.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Interest Costs</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company&#146;s policy is to capitalize qualified interest
costs incurred on internally developed software projects that
are in the application development stage and that extend beyond
six months. For the years ended December&nbsp;31, 2004, 2003 and
2002, the Company incurred interest costs of $137,000, $80,000
and $400,000, respectively. No interest was capitalized during
the years ended December&nbsp;31, 2004, 2003 and 2002 as no
internally developed software projects extended beyond six
months.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Goodwill and Other Intangible Assets</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company has recorded goodwill for the excess of the purchase
price for its acquisition of the IPE during June 2001 over the
fair value of identifiable net assets acquired, including other
identified intangible assets (Note&nbsp;5). The Company
recognizes specifically identifiable intangibles when a specific
right or contract is acquired. Finite-lived intangible assets
are amortized on a straight-line basis over the lesser of their
contractual or estimated useful lives. The Company&#146;s
goodwill and other intangible assets are evaluated for
impairment annually in its fiscal fourth quarter or sooner if
events indicate that value may be diminished. Such evaluation
includes comparing the fair value of a reporting unit with its
carrying value and analyzing expected future discounted cash
flows at the reporting unit level. The reporting unit level for
the Company&#146;s goodwill and the majority of its other
intangible assets is the futures business segment, which relates
to the operations of the IPE. This analysis did not result in an
impairment charge during the years ended December&nbsp;31, 2004,
2003 or 2002.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Intellectual Property</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
All costs related to internally developed patents and trademarks
are expensed as incurred. All costs related to purchased
patents, trademarks and internet domain names are recorded as
other intangible assets and are amortized on a straight-line
basis over their estimated useful lives. All costs related to
licensed patents are capitalized and amortized on a
straight-line basis over the term of the license.
</DIV>

<P align="center" style="font-size: 10pt;">F-10

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;">
<B>IntercontinentalExchange, Inc.</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>and Subsidiaries</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Notes to Consolidated Financial
Statements&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Long-Lived Assets</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company reviews its long-lived assets, such as property and
equipment, goodwill, and other intangible assets, for impairment
at each balance sheet date and whenever events or changes in
circumstances indicate that the carrying amount may not be fully
recoverable. To analyze recoverability, the Company projects
undiscounted net future cash flows over the remaining life of
such assets. If these projected cash flows are less than the
carrying amount, an impairment would be recognized, resulting in
a write-down of assets with a corresponding charge to earnings.
The impairment loss is measured based upon the difference
between the carrying amount and the fair value of the assets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
An impairment would also be recorded when events or changes in
circumstances may indicate that the carrying amount of an asset
may not be recoverable. Management believes its long-lived
assets in the accompanying consolidated balance sheets are
appropriately valued.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Income Taxes</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company and its U.S.&nbsp;subsidiaries file a consolidated
U.S.&nbsp;federal income tax return. State income tax returns
are filed on a separate, combined or consolidated basis in
accordance with relevant state laws and regulations. The
Company&#146;s foreign subsidiaries are based in the U.K. and
they file separate local country income tax returns and take
advantage of the U.K.&#146;s group relief provisions when
applicable. The Company utilizes the liability method of
accounting for income taxes. Under the liability method,
deferred taxes are determined based on the difference between
the financial and tax bases of assets and liabilities using
enacted tax rates in effect in the years in which the
differences are expected to reverse. Deferred tax expenses and
benefits are recognized for changes in deferred tax assets and
liabilities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The difference between our actual income tax rate and our
effective tax rate for a given period is primarily a reflection
of the tax effects of our foreign operations, general business
and tax credits, state income taxes and the non-deductibility of
certain expenses. We have provided for U.S.&nbsp;income taxes on
all undistributed earnings of our foreign subsidiaries as they
are not expected to be permanently reinvested.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Revenue Recognition</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company&#146;s revenues primarily consist of commission and
exchange fee revenues for OTC transactions executed over the
Platform and for futures transactions executed through the IPE
and are recognized on the date the transactions occur. The
Company calculates the commission fee revenues based on the
volume of each commodity traded on the Platform multiplied by
the commission rate for each commodity type. The IPE exchange
fee revenues are determined on the basis of an exchange fee
charged for each &#147;lot&#148; or contract traded on the
exchange. Exchange fees are calculated by LCH.Clearnet Limited
(formerly the London Clearing House or &#147;LCH&#148;) on the
IPE&#146;s behalf and are transferred to the IPE on a monthly
basis. The LCH, which is a leading clearinghouse based in
London, also calculates and collects fees for cleared OTC
contracts traded on the Platform.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Transaction fees are recorded net of rebates of
$3.3&nbsp;million, $981,000 and $887,000 for the years ended
December&nbsp;31, 2004, 2003 and 2002, respectively. The Company
rebates a portion of the exchange fees paid by IPE independent
local traders for lots bought and sold on the same day for the
same price. The Company also rebates a portion of the commission
fees paid by certain market makers in the OTC business. The 2004
rebates include $2.3&nbsp;million for a two month rebate program
in November and December 2004 designed to promote electronic
futures trading in the Brent Crude futures market on the
Platform.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Data services revenues include terminal and license fees
received from data vendors in exchange for the provision of
real-time IPE price information. Data services fees are charged
to data vendors on a monthly basis based on the number and type
of terminals they have carrying IPE data. Each data vendor also
pays an annual
</DIV>

<P align="center" style="font-size: 10pt;">F-11

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;">
<B>IntercontinentalExchange, Inc.</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>and Subsidiaries</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Notes to Consolidated Financial
Statements&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
license fee to the IPE, which is deferred and recognized as
revenue ratably over the period of the annual license. Data
services revenues include view-only access charges to
subscribers to view real-time OTC price information on the
Platform through 10x. 10x also publishes end of day trading and
price reports and provides MPV services. The MPV service
provides validation of long-dated and illiquid swaps and options
valuations based on inputs from counterparties in the
marketplace submitting their trader valuations for open
positions. 10x invoices its subscribers either on a monthly or
annual basis. For those 10x subscribers billed on an annual
basis, the revenues are deferred and amortized ratably over the
period of the annual subscriptions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Trading access revenues include monthly minimum commission
shortfall fees charged to customers that are signed up to trade
on the OTC Platform. The monthly minimum commission amount for
each company is based on the number of users at each company
signed up to trade on the Platform. The difference between the
monthly minimum commission total for each company and the actual
amount of commissions paid that month for trading activity is
recognized as monthly minimum commission shortfall trading
access revenues. The actual amount of commissions paid that
month for trading activity is recognized as transaction fee
revenues. Trading access revenues also relate to annual member
subscription and system user fees charged to IPE customers,
which are deferred and amortized ratably over the periods to
which they relate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Other revenues primarily relate to revenue generated from IPE
equipment rentals, IPE communications charges and IPE training
seminars, and are recognized as services are provided. The IPE
equipment rentals are charged in advance and are amortized
ratably over the period to which they relate. Other revenues
also include licensing and service fees charged to the Chicago
Climate Exchange, Inc. (&#147;CCX&#148;). CCX is a
self-regulated exchange that administers a voluntary
multi-sector greenhouse gas reduction and trading program for
North America. The Company has been contracted to provide,
design and service CCX&#146;s electronic trading platform. The
license and service fees are billed in advance to CCX on a
monthly basis and are recognized as services are provided. We
recognize technology development fees as revenues when the
development work is completed and accepted by CCX.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Sources of Supplies</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company uses ten primary vendors for equipment used in the
Platform and its network. If these vendors were unable to meet
the Company&#146;s needs, management believes that the Company
could obtain this equipment from other vendors on comparable
terms and that its operating results would not be materially
adversely affected.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Credit Risk and Significant Customers</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company&#146;s accounts receivable related to its OTC
business segment subjects the Company to credit risk, as the
Company does not require its customers to post collateral for
bilateral trades. The Company does not risk its own capital in
transactions or extend credit to market participants in any
commodities markets. The Company limits its risk of loss by
allowing trading access to the Platform to companies that
qualify as eligible commercial entities, as defined in the
Commodity Exchange Act, and by terminating access to the
Platform by entities with delinquent accounts.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Beginning in January 2003, the Company received approval from
the CFTC permitting registered traders and locals with floor or
electronic trading privileges on any regulated U.S.&nbsp;futures
exchange to qualify as eligible commercial entities and,
therefore, to execute OTC transactions on the Platform. The
Company also received approval in October 2004 from the CFTC
permitting IPE&#146;s registered brokers and local traders to
transact in the OTC markets for their own accounts. This has
allowed IPE members and traders access to both the futures
markets and the OTC markets on one screen via the Platform. The
launch and growth of cleared OTC products also limits the
Company&#146;s risk of loss in its OTC business as the LCH
collects cleared transaction fees on the date the transactions
occur and transfers these fees to the Company on a monthly basis.
</DIV>

<P align="center" style="font-size: 10pt;">F-12

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;">
<B>IntercontinentalExchange, Inc.</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>and Subsidiaries</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Notes to Consolidated Financial
Statements&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
The LCH serves as the central counterparty to all trades
executed by its members. During the year ended December&nbsp;31,
2004, 54% of the OTC business segment commission fee revenues
were from cleared trades.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company&#146;s large customer base also mitigates the
concentration of credit risk as the Company had over
660&nbsp;companies registered to trade on the Platform as of
December&nbsp;31, 2004 and another 200&nbsp;companies with
view-only access rights through 10x. There were no accounts
receivable balances greater than 10% of total consolidated
accounts receivable as of December&nbsp;31, 2004 or
December&nbsp;31, 2003.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Revenues from one customer, which was a related-party for a
portion of the year ended December&nbsp;31, 2002, comprised 10%
of total consolidated revenues for the year ended
December&nbsp;31, 2002. No other customer accounted for more
than 10% of total consolidated revenues during any of the years
presented in the accompanying consolidated statements of income,
including the years ended December&nbsp;31, 2004 and 2003. See
Note&nbsp;11 where related-parties are discussed in more detail.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Stock-Based Compensation</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company currently sponsors an employee stock option plan,
described more fully in Note&nbsp;9. The Company accounts for
the stock-based compensation plan under the intrinsic value
method in accordance with Accounting Principles Board
(&#147;APB&#148;) Opinion No.&nbsp;25, <I>Accounting for Stock
Issued to Employees</I>, and related Interpretations. Therefore,
the Company recognizes no compensation expense for the stock
option grants as long as the exercise price is equal to or more
than the fair value of the shares at the date of grant. The
Company has adopted the disclosure-only provisions under
SFAS&nbsp;No.&nbsp;123, <I>Accounting for Stock-Based
Compensation,</I> as amended by SFAS&nbsp;No.&nbsp;148,
<I>Accounting for Stock-Based Compensation&nbsp;&#151;
Transaction and Disclosure</I>. Please refer to the New
Accounting Pronouncements section of Note&nbsp;2 for information
regarding the Company&#146;s plans regarding the implementation
of SFAS&nbsp;No.&nbsp;123 (revised 2004), <I>Share-Based
Payment</I>. Had the Company elected to adopt the fair value
recognition provisions of SFAS&nbsp;No.&nbsp;123, pro forma net
income available to common shareholders and earnings per common
share for the years ended December&nbsp;31, 2004, 2003 and 2002
would be as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="54%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Year Ended December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2002</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>(in thousands, except per share amounts)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income available to common shareholders, as reported</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>21,949</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>11,609</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>31,050</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Add: Stock-based compensation expense included in reported net
    income, net of tax</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>243</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deduct: Total stock-based compensation expense determined under
    the fair value method for all awards, net of tax</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(737</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,494</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,638</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income available to common shareholders, pro forma</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>21,455</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>8,119</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>28,412</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Earnings per common share:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Basic and Diluted&nbsp;&#151; as reported</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.14</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Basic and Diluted&nbsp;&#151; pro forma</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.04</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.13</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The reduction in pro forma stock-based compensation expense for
the year ended December&nbsp;31, 2004 is primarily due to the
large number of stock option forfeitures that occurred during
the year ended December&nbsp;31, 2004. Pursuant to
SFAS&nbsp;No.&nbsp;123, the Company reduced the compensation
cost for actual forfeited options during the year ended
December&nbsp;31, 2004, which included 4,475,733 stock options
and $4.4&nbsp;million of compensation cost recognized on a pro
forma basis in prior periods for the forfeited stock options.
</DIV>

<P align="center" style="font-size: 10pt;">F-13

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;">
<B>IntercontinentalExchange, Inc.</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>and Subsidiaries</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Notes to Consolidated Financial
Statements&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Earnings Per Common Share</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Basic earnings per common share is calculated using the weighted
average common shares outstanding during the year. Common
equivalent shares from stock options, restricted stock awards
and warrants, using the treasury stock method, are also included
in the diluted per share calculations unless their effect of
inclusion would be antidilutive (Note&nbsp;16).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Treasury Stock</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company records treasury stock activities under the cost
method whereby the entire cost of the acquired stock is recorded
as treasury stock (Note&nbsp;9).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Fair Value of Financial Instruments</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
SFAS&nbsp;No.&nbsp;107, <I>Disclosure about the Fair Value of
Financial Instruments</I>, requires the disclosure of the fair
value of financial instruments, including assets and liabilities
recognized in the consolidated balance sheets. The
Company&#146;s financial instruments include cash and cash
equivalents, short-term investments, restricted cash, accounts
receivable, short-term and long-term debt and other short-term
assets and liabilities. Based on the short-term nature of these
financial instruments or their market rates, the estimated fair
values of the Company&#146;s financial instruments approximate
their carrying values as of December&nbsp;31, 2004 and 2003.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Foreign Currency Transaction Adjustments and Transactions</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The functional currency of the Company&#146;s foreign
subsidiaries is the U.K. pounds sterling. The Company translates
these assets and liabilities into U.S.&nbsp;dollars using
period-end exchange rates and revenues and expenses are
translated using the average exchange rates for the reporting
period. Translation adjustments are recorded in accumulated
other comprehensive income, a separate component of
shareholders&#146; equity in the accompanying consolidated
balance sheets and in the consolidated statements of
comprehensive income. Gains and losses from foreign currency
transactions, such as those resulting from the settlement of
foreign receivables or payables or the Company&#146;s foreign
subsidiaries cash accounts held in U.S.&nbsp;dollars, are
included in other income (expense) in the accompanying
consolidated statements of income and resulted in net losses of
$1.4&nbsp;million, $644,000 and $149,000 for the years ended
December&nbsp;31, 2004, 2003 and 2002, respectively.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Hedging</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
During the years ended December&nbsp;31, 2004 and 2003, the
Company entered into foreign currency hedging activities
primarily to protect the net investment in its foreign
subsidiaries (Note&nbsp;13). In accordance with
SFAS&nbsp;No.&nbsp;133, <I>Accounting for Derivative Instruments
and Hedging Activities</I>, the Company is required to recognize
all derivative financial instruments as either assets or
liabilities in the accompanying consolidated balance sheets at
fair value. The effective portion of any gain or loss on these
derivative financial instruments, which have been designated as
a hedge of a net investment in foreign operations, are reflected
in accumulated other comprehensive income. Any ineffective
portion of any gain or loss on these derivative financial
instruments are immediately recognized in earnings. The
Company&#146;s foreign exchange forward contracts entered into
during the years ended December&nbsp;31, 2004 and 2003 met the
requirements for hedge accounting, including correlation, and
qualified as effective hedges. Therefore, all gains or losses on
these foreign exchange forward contracts have been reflected in
other comprehensive income in the accompanying consolidated
statements of comprehensive income and balance sheets.
</DIV>

<P align="center" style="font-size: 10pt;">F-14

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;">
<B>IntercontinentalExchange, Inc.</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>and Subsidiaries</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Notes to Consolidated Financial
Statements&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Marketing and Promotional Fees</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Advertising costs, including print advertising and production
costs, product promotion campaigns and seminar, conference and
convention costs related to trade shows and other industry
events, are expensed as incurred. The Company incurred
advertising costs of $849,000, $1.2&nbsp;million and
$1.4&nbsp;million during the years ended December&nbsp;31, 2004,
2003 and 2002, respectively.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>New Accounting Pronouncements</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On December&nbsp;16, 2004, the Financial Accounting Standards
Board (&#147;FASB&#148;) issued SFAS&nbsp;No.&nbsp;123 (revised
2004), <I>Share-Based Payment</I>, which is a revision of
SFAS&nbsp;No.&nbsp;123. SFAS&nbsp;No.&nbsp;123(R) supersedes APB
Opinion No.&nbsp;25 and amends SFAS&nbsp;No.&nbsp;95,
<I>Statement of Cash Flows</I>. Generally, the approach in
SFAS&nbsp;No.&nbsp;123(R) is similar to the approach described
in SFAS&nbsp;No.&nbsp;123. However, SFAS&nbsp;No.&nbsp;123(R)
requires all share-based payments to employees, including grants
of employee stock options, to be recognized in the income
statement based on their fair value. Pro forma disclosure is no
longer an alternative.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For public companies that do not file as small business issuers,
SFAS&nbsp;No.&nbsp;123(R) must be adopted no later than
July&nbsp;1, 2005. For nonpublic entities,
SFAS&nbsp;No.&nbsp;123(R) is effective as of the beginning of
the first annual reporting period that begins after
December&nbsp;15, 2005. Early adoption will be permitted in
periods in which financial statements have not been issued. The
Company expects to adopt SFAS&nbsp;No.&nbsp;123(R) on
July&nbsp;1, 2005.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
SFAS&nbsp;No.&nbsp;123(R) permits companies to adopt its
requirements using one of two methods:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    1.&nbsp;A &#147;modified prospective&#148; method in which
    compensation cost is recognized beginning with the effective
    date (a)&nbsp;based on the requirements of
    SFAS&nbsp;No.&nbsp;123(R) for all share-based payments granted
    after the effective date and (b)&nbsp;based on the requirements
    of SFAS&nbsp;No.&nbsp;123 for all awards granted to employees
    prior to the effective date of SFAS&nbsp;No.&nbsp;123(R) that
    remain unvested on the effective date.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    2.&nbsp;A &#147;modified retrospective&#148; method which
    includes the requirements of the modified prospective method
    described above, but also permits entities to restate based on
    the amounts previously recognized under SFAS&nbsp;No.&nbsp;123
    for purposes of pro forma disclosures either (a)&nbsp;all prior
    periods presented or (b)&nbsp;prior interim periods of the year
    of adoption.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company plans to adopt SFAS&nbsp;No.&nbsp;123(R) using the
modified prospective method.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As permitted by SFAS&nbsp;No.&nbsp;123, the Company currently
accounts for share-based payments to employees using APB Opinion
No.&nbsp;25&#146;s intrinsic value method and, as such,
generally recognizes no compensation cost for employee stock
options. Accordingly, the adoption of
SFAS&nbsp;No.&nbsp;123(R)&#146;s fair value method will have a
significant impact on our result of operations, although it will
have no impact on our overall financial position. The impact of
adoption of SFAS&nbsp;No.&nbsp;123(R) cannot be predicted at
this time because it will depend on levels of share-based
payments granted in the future. However, had the Company adopted
SFAS&nbsp;No.&nbsp;123(R) in prior periods, the impact of the
standard would have approximated the impact of
SFAS&nbsp;No.&nbsp;123 as described in the disclosure of pro
forma net income and earnings per share in Notes&nbsp;2 and 9.
It should be noted that there are certain differences between
the requirements of SFAS&nbsp;No.&nbsp;123 and
SFAS&nbsp;No.&nbsp;123(R) that may result in a material
difference in the impact of the fair value calculations on the
Company&#146;s net income and earnings per share. This includes
the requirement under SFAS&nbsp;No.&nbsp;123(R) to estimate
forfeitures, the requirement that an excess tax benefit reduces
taxes payable before it is realized, potential changes to the
capitalization of compensation cost and the Company&#146;s use
of industry volatility figures in prior periods.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
SFAS&nbsp;No.&nbsp;123(R) also requires the benefits of tax
deductions in excess of recognized compensation cost to be
reported as a financing cash flow, rather than as an operating
cash flow as required under current literature. This requirement
will reduce net operating cash flows and increase net financing
cash flows in
</DIV>

<P align="center" style="font-size: 10pt;">F-15

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;">
<B>IntercontinentalExchange, Inc.</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>and Subsidiaries</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Notes to Consolidated Financial
Statements&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
periods after adoption. The Company cannot estimate what those
amounts may be in the future because they depend on, among other
things, when employees exercise stock options. The Company did
not recognize any tax deductions in excess of the recognized
compensation cost for the years ended December&nbsp;31, 2004,
2003 and 2002.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In December 2004, FASB Staff Position No.&nbsp;SFAS&nbsp;109-2,
<I>Accounting and Disclosure Guidance for the Foreign Earnings
Repatriation Provision within the American Jobs Creation Act of
2004 </I>(&#147;FSP SFAS&nbsp;109-2&#148;) was issued. FSP
SFAS&nbsp;109-2 provides guidance under SFAS&nbsp;109,
<I>Accounting for Income Taxes
</I>(&#147;SFAS&nbsp;No.&nbsp;109&#148;), for recording the
potential impact of the repatriation provisions of the American
Jobs Creation Act of 2004 (the &#147;Jobs Act&#148;), enacted on
October&nbsp;22, 2004. FSP SFAS&nbsp;109-2 allows time beyond
the financial reporting period of enactment to evaluate the
effects of the Jobs Act before applying the requirements of FSP
SFAS&nbsp;109-2. Accordingly, the Company is evaluating the
potential effects of the Jobs Act and has not adjusted the tax
expense or deferred tax liability as of December&nbsp;31, 2004
to reflect the requirements of FSP SFAS&nbsp;109-2
(Note&nbsp;10).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Reclassifications</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Certain prior year amounts have been reclassified to conform to
the current year&#146;s financial statement presentation.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>3.</B></TD>
    <TD>
    <B>Restricted Cash and Short-Term Investments</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As an RIE, the FSA requires the IPE to restrict the use of the
equivalent of six months of operating expenditures in cash or
cash equivalents at all times. As of December&nbsp;31, 2004 and
2003, this amount was equal to $12.4&nbsp;million and
$11.9&nbsp;million, respectively, and is reflected as restricted
cash in the accompanying consolidated balance sheets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
ICE Services UK is regulated by the FSA as an agency broker. The
FSA requires ICE Services UK to maintain a minimum level of
financial resources, which is calculated annually on the basis
of
<FONT style="font-size: 70%"><SUP>1</SUP></FONT>/<FONT style="font-size: 60%">4</FONT>
of the relevant annual expenditures, adjusted for any illiquid
assets. As of December&nbsp;31, 2004 and 2003, the resource
requirement was equal to $1.0&nbsp;million and $874,000,
respectively, and is reflected as restricted cash in the
accompanying consolidated balance sheets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In November 2004, the Company entered into a $25.0&nbsp;million
revolving credit agreement with Wachovia Bank, National
Association (&#147;Wachovia&#148;) (Note&nbsp;7). The Company is
required to maintain a $5.0&nbsp;million money market account
with Wachovia until it has transferred the primary domestic and
international deposit accounts to the lender, which will likely
occur during 2005. As of December&nbsp;31, 2004, this
$5.0&nbsp;million balance is reflected as restricted cash in the
accompanying consolidated balance sheets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In January 2003, the FASB issued Interpretation No.&nbsp;46
(&#147;FIN&nbsp;46&#148;), <I>Consolidation of Variable Interest
Entities</I>. FIN&nbsp;46 requires a variable interest entity to
be consolidated by a company if that company is subject to a
majority of the risk of loss from the variable interest
entity&#146;s activities or entitled to receive a majority of
the entity&#146;s residual returns or both. Previously, entities
were generally consolidated by a company that has a controlling
financial interest through ownership of a majority voting
interest in the entity. The Company was required to adopt
FIN&nbsp;46 in the first quarter of 2004, but chose to adopt it
early during November 2003.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company had an interest in a special purpose or variable
interest entity that it previously was not required to
consolidate based on preexisting authoritative accounting
guidance. However, given that the Company had the ability to
receive all of the variable interest entity&#146;s expected
residual losses and returns, the Company was considered the
primary beneficiary under FIN&nbsp;46 and was required to
consolidate the entity. The result of the adoption of
FIN&nbsp;46 and the consolidation of the variable interest
entity in November&nbsp;2003 was an increase to restricted
short-term investments and a corresponding increase to
additional paid-in capital
</DIV>

<P align="center" style="font-size: 10pt;">F-16

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;">
<B>IntercontinentalExchange, Inc.</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>and Subsidiaries</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Notes to Consolidated Financial
Statements&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
for $24.0&nbsp;million. The $24.0&nbsp;million held by the
special purpose entity was pledged to a bank as a guarantee to
secure a letter-of-credit facility for the Company&#146;s
Class&nbsp;B redeemable common stock and was invested in ARS
investments. Therefore, these amounts were classified as
restricted short-term investments in the accompanying
consolidated balance sheets as of December&nbsp;31, 2003. The
Class&nbsp;B redeemable common stock was redeemed in November
2004 and the entire $24.0&nbsp;million in restricted short-term
investments was used for a portion of the redemption
(Note&nbsp;8).
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>4.</B></TD>
    <TD>
    <B>Property and Equipment</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Property and equipment consisted of the following as of
December&nbsp;31, 2004 and 2003:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="62%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>December&nbsp;31,</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Depreciation</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Period</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center"><B>(in years)</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>(in thousands)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Land</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>3,832</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>3,569</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#150;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Computer and network equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22,964</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21,161</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>3 to 4</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Software and internally developed software</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>37,058</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>31,643</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Office furniture and equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,263</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,964</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Leasehold improvements</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,010</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,858</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>68,127</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>60,195</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Less accumulated depreciation and amortization</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(48,763</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(34,570</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Property and equipment, net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>19,364</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>25,625</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For the years ended December&nbsp;31, 2004, 2003 and 2002,
amortization of software and internally developed software was
$8.3&nbsp;million, $9.1&nbsp;million and $6.0&nbsp;million,
respectively, and depreciation of all other property and
equipment was $5.2&nbsp;million, $7.3&nbsp;million and
$6.0&nbsp;million, respectively.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In January 2004, the Company extended the remaining estimated
useful lives of various computer and network equipment from
March 2005 to December 2005. The Company&#146;s decision to
extend the useful lives of these assets was based on an internal
analysis that indicated the estimated useful lives would extend
beyond the original estimate of three years. This had the impact
of deferring $676,000 of depreciation expense, $440,000 on an
after tax basis, that would have otherwise been recorded during
the year ended December&nbsp;31, 2004. The change in estimate
had no impact on earnings per share as reported during the year
ended December&nbsp;31, 2004. We will continue to review the
remaining estimated useful lives of our property and equipment
and will make adjustments whenever events or changes in
circumstances indicate that the remaining useful lives have
changed.
</DIV>

<P align="center" style="font-size: 10pt;">F-17

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;">
<B>IntercontinentalExchange, Inc.</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>and Subsidiaries</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Notes to Consolidated Financial
Statements&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>5.</B></TD>
    <TD>
    <B>Goodwill and Other Intangible Assets</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Goodwill and other intangible assets and the related accumulated
amortization consisted of the following as of December&nbsp;31,
2004 and 2003:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="77%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>(in thousands)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Goodwill from the IPE acquisition</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>84,713</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>78,903</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    IPE Customer relationships</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,978</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,568</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    RIE license</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,473</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,373</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Trademark and internet domain names</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>665</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>665</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>92,829</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>86,509</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Less accumulated amortization</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6,754</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(5,061</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Goodwill and other intangible assets, net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>86,075</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>81,448</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The IPE has contractual customer relationships with its members
and quote vendors. A member is defined as a company and/or an
individual who has rights to execute and/or clear exchange
trades directly through the IPE&#146;s exchange. A quote or data
vendor is defined as a data reseller who distributes IPE
real-time price information to its customers. These customer
relationships have been classified as intangible assets and are
being amortized over their estimated useful lives of five years.
As of December&nbsp;31, 2004 and 2003, the net carrying value of
these customer relationships totaled $1.8&nbsp;million and
$2.7&nbsp;million, respectively.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As discussed in Note&nbsp;1, the IPE is a RIE that is regulated
by the FSA in accordance with the Financial Services and Markets
Act 2000. The RIE status allows the IPE to carry out its
business as a futures and options exchange. The process of
obtaining recognition as an Investment Exchange in the U.K.
involves applicants incurring significant time and legal
expense, which the Company avoided by its acquisition of the
IPE. The IPE&#146;s RIE status has therefore been classified as
an intangible asset due to its operating agreement/license with
the FSA. In accordance with the adoption of
SFAS&nbsp;No.&nbsp;142 on January&nbsp;1, 2002 as discussed in
Note&nbsp;2, the Company did not recognize any amortization
expense on the RIE license intangible asset during the years
ended December&nbsp;31, 2004, 2003 and 2002 as it has an
indefinite useful life. As of December&nbsp;31, 2004 and 2003,
the carrying value of the RIE license totaled $1.4&nbsp;million
and $1.3&nbsp;million, respectively.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
During 2003, the Company purchased trademarks and internet
domain names from various third parties for $665,000. These
trademarks and internet domain names have been classified as
intangible assets and are being amortized over their estimated
useful lives of five years. As of December&nbsp;31, 2004 and
2003, the carrying value of these trademarks and internet domain
names totaled $433,000 and $566,000, respectively.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In accordance SFAS&nbsp;No.&nbsp;142, the Company did not
recognize any amortization expense on goodwill during the years
ended December&nbsp;31, 2004, 2003 and 2002. As of
December&nbsp;31, 2004 and 2003, the Company&#146;s goodwill
balance totaled $82.5&nbsp;million and $76.8&nbsp;million,
respectively. The increase in goodwill and other intangible
assets primarily resulted from translation adjustments.
</DIV>

<P align="center" style="font-size: 10pt;">F-18

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;">
<B>IntercontinentalExchange, Inc.</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>and Subsidiaries</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Notes to Consolidated Financial
Statements&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For the years ended December&nbsp;31, 2004, 2003 and 2002,
amortization of other intangible assets was $1.5&nbsp;million,
$1.0&nbsp;million and $876,000, respectively. The Company
expects future amortization expense from other intangible assets
as of December&nbsp;31, 2004 to be as follows (in thousands):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="89%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>1,329</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2006</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>691</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2007</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>133</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2008</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>2,187</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>6.</B></TD>
    <TD>
    <B>Deferred Revenue</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Deferred revenue relates to the unamortized annual billings for
IPE member subscription and user fees, IPE equipment rentals and
IPE and 10x market data services, reports and subscriptions
which are recognized as revenue as services are provided.
Deferred revenue also includes the CCX license and service fees
that are billed monthly in advance and for certain IPE training
seminars that are pre-billed.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>7.</B></TD>
    <TD>
    <B>Current and Long-Term Debt</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Revolving Credit Facility</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On November&nbsp;17, 2004, the Company entered into a
$25.0&nbsp;million revolving credit agreement (the
&#147;Facility&#148;) with Wachovia. Under the terms of the
Facility, the Company can borrow an aggregate principal amount
of up to $25.0&nbsp;million at any time from the closing date of
the Facility through the termination date of the Facility, which
is November&nbsp;17, 2006. The Company also has the right to
repay and reborrow loans or to permanently reduce in whole or in
part the amount available under the Facility at any time prior
to the termination date of the Facility without premium or
penalty. The Facility includes an unused line fee that is equal
to the unused maximum revolver amount multiplied by an
applicable margin rate and is payable on a quarterly basis. The
applicable margin rate ranges from 0.15% to 0.25% based on a
cash flow leverage ratio calculated on a trailing twelve month
period. Based on this calculation, the applicable margin rate
was 0.15% as of December&nbsp;31, 2004.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The loans under the Facility bear interest on the principal
amounts outstanding at a rate of LIBOR plus an applicable
margin. The Company has the option to select the interest period
applicable to any loans at the time of borrowing. The interest
periods shall either be a daily LIBOR market index loan or a
LIBOR rate loan with a period of one, three or six months.
Interest on each LIBOR market index loan shall be payable on a
monthly basis and the interest on the LIBOR rate loans shall be
payable on the last day of each interest period. However, if the
interest period is six months, interest shall be payable at and
on the last day of each three month period during the interest
period. The applicable margin rate ranges from 0.85% to 1.05%
based on a cash flow leverage ratio calculated on a trailing
twelve month period. As of December&nbsp;31, 2004, the
applicable margin rate was 0.85%.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company borrowed the entire $25.0&nbsp;million available
under the Facility on November&nbsp;23, 2004. These funds were
used for a portion of the $67.5&nbsp;million redemption of the
Company&#146;s Class&nbsp;B redeemable common stock that
occurred in November 2004 (Note&nbsp;8). As of December&nbsp;31,
2004, $13.0&nbsp;million was held in a six month LIBOR rate loan
with a locked-in interest rate, including the applicable margin
rate, of 3.40%. The remaining balance of $12.0&nbsp;million was
held in a daily LIBOR market index loan with an interest rate,
including the applicable margin rate, of 3.25% as of
December&nbsp;31, 2004. The Company repaid the
$12.0&nbsp;million LIBOR market index loan in January 2005 with
excess cash. Therefore, the $12.0&nbsp;million was shown as a
current liability in the accompanying consolidated balance
sheets.
</DIV>

<P align="center" style="font-size: 10pt;">F-19

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;">
<B>IntercontinentalExchange, Inc.</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>and Subsidiaries</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Notes to Consolidated Financial
Statements&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Facility has a negative pledge on all the assets of the
Company and the Company pledged 65% of the stock of its foreign
subsidiary holding company. The Facility also contains certain
affirmative and negative covenants including, but not limited
to, cash flow leverage ratios, minimum tangible net worth ratios
and limitations or approvals needed from Wachovia for
acquisitions, investments, external debt and other fundamental
changes to the business.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Term Notes&nbsp;Payable</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In May 2000, the Company entered into a related-party term loan
note agreement with two of the founding shareholders of the
Company (the &#147;Term Notes&#148;). The Term Notes bore
interest on the principal amounts at one-month LIBOR, with
interest compounding monthly and payable at the maturity date.
Interest of $264,000 was accrued to the principal balance of the
Term Notes during the year ended December&nbsp;31, 2002 in
accordance with the terms of the Term Notes agreements. The Term
Notes matured and $16.5&nbsp;million was repaid in November
2002. The Term Notes were cancelled and all liens associated
therewith were released in November 2002.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>8.</B></TD>
    <TD>
    <B>Class&nbsp;B Redeemable Common Stock</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In June 2001, the Company purchased the IPE. The Company
acquired the share capital of the IPE in a tax-free
stock-for-stock exchange. Each IPE shareholder received, for
each share tendered to the Company, one Class&nbsp;A,
Series&nbsp;1 common share and one Class&nbsp;B redeemable
common share of the Company, for an aggregate total of
11,450,319 Class&nbsp;A, Series&nbsp;1&nbsp;shares and
11,450,319 Class&nbsp;B redeemable shares.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the terms of the offer and the Company&#146;s charter, the
Class&nbsp;B redeemable shares had an aggregate redemption value
of $67.5&nbsp;million and were subject to redemption at the
holder&#146;s option for $5.895&nbsp;per share following the
first anniversary of the date on which the IPE Brent Crude
futures contract and the IPE Gas Oil futures contract have
traded exclusively for ten consecutive days through an
electronic trading platform. The Class&nbsp;B redeemable shares
were also subject to redemption at the holder&#146;s option if
certain redemption trigger events occurred including, but not
limited to, if the Company decided not to proceed with an
electronic trading platform for the IPE Brent Crude futures
contract and the Gas Oil futures contract.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company recorded the issuance of the Class&nbsp;B redeemable
shares at their discounted present value of $60.2&nbsp;million
at the date of issuance, and accreted to the redemption value
based on the effective interest method over a two-year period
ended in June 2003. June&nbsp;15, 2003 was the earliest
potential redemption date under the terms of the Class&nbsp;B
redeemable shares. During the years ended December&nbsp;31, 2003
and 2002, the Company recorded $1.8&nbsp;million and
$3.7&nbsp;million, respectively, in accretion directly to
retained earnings related to the Class&nbsp;B redeemable shares.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On November&nbsp;5, 2004, pursuant to a vote of the
Company&#146;s shareholders, the Company amended its charter to
provide the Company with a mandatory right of redemption with
respect to the Class&nbsp;B redeemable shares. The Company could
redeem all but not less than all of the outstanding shares of
the Class&nbsp;B redeemable shares at the redemption price at
its option with a five day notice period. On November&nbsp;23,
2004, the Company exercised the mandatory redemption option and
redeemed all 11,450,319 Class&nbsp;B redeemable shares at the
$5.895 redemption value for an aggregate redemption price of
$67.5&nbsp;million. The Company used the $25.0&nbsp;million
available under the Facility (Note&nbsp;7), the
$24.0&nbsp;million available under the letter-of-credit facility
(Note&nbsp;3) and $18.5&nbsp;million of its excess cash for the
$67.5&nbsp;million redemption. The Class&nbsp;B redeemable
shares received in connection with the redemption hold the
status of undesignated shares of common stock (Note&nbsp;9).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company exercised the mandatory redemption option for
several reasons. Facilitating an early redemption of the
Class&nbsp;B redeemable stock permitted the Company to eliminate
existing credit support
</DIV>

<P align="center" style="font-size: 10pt;">F-20

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;">
<B>IntercontinentalExchange, Inc.</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>and Subsidiaries</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Notes to Consolidated Financial
Statements&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
arrangements attached to the unfulfilled redemption obligations
that existed with respect to the Class&nbsp;B redeemable stock.
Such credit support arrangements have in practice restricted the
Company&#146;s ability to incur material debt, to expand its
business and to finance potential acquisitions. The Company also
anticipates that the IPE will move to exclusive electronic
trading during 2005, at which time the Company would have been
obligated to redeem the Class&nbsp;B redeemable stock at the
$5.895 cash redemption value following the anniversary date.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>9.</B></TD>
    <TD>
    <B>Shareholders&#146; Equity</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Common Stock</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table summarizes the number and classes of shares
of common stock authorized for issuance by the Company as of
December&nbsp;31, 2004 and 2003:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="62%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Number of Shares Authorized</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>as of December&nbsp;31,</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Par</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Value</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Class&nbsp;A common stock, Series&nbsp;1</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22,900,638</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22,900,638</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>.01</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Class&nbsp;A common stock, Series&nbsp;2</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>300,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>300,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>.01</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Class&nbsp;B redeemable common stock <I>(Note&nbsp;8)</I></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,450,319</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>.01</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Undesignated shares of common stock</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,450,319</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Shares of Class&nbsp;A and Class&nbsp;B common stock are
identical in all respects and entitle the holders to the same
rights and privileges with respect to dividends, liquidation
preferences and voting rights, except that the Class&nbsp;B
shares were redeemable, as described in Note&nbsp;8.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As discussed in Note&nbsp;8, the Company redeemed the
Class&nbsp;B redeemable shares in November 2004. The
Company&#146;s charter provides that upon payment of the
redemption price, all rights in respect of the Class&nbsp;B
redeemable shares ceased, no Class&nbsp;B redeemable shares may
be reissued and all such re-acquired shares shall hold the
status of undesignated shares of common stock.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Stock Option Plan</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company has adopted the IntercontinentalExchange, Inc. 2000
Stock Option Plan (the &#147;Plan&#148;). As of
December&nbsp;31, 2004, there are 21,000,000&nbsp;shares of
common stock reserved for issuance under the Plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Stock options are granted at the discretion of the compensation
committee of the board of directors. The Company may grant,
under provisions of the Plan, both incentive stock options and
nonqualified stock options. The options generally vest over four
years, but can vest at different intervals based on the
compensation committee&#146;s determination. Generally, options
may be exercised up to ten years after the date of grant, but
</DIV>

<P align="center" style="font-size: 10pt;">F-21

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;">
<B>IntercontinentalExchange, Inc.</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>and Subsidiaries</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Notes to Consolidated Financial
Statements&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
generally expire 14&nbsp;days after termination of employment.
The following is a summary of options for the years ended
December&nbsp;31, 2004, 2003 and 2002:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="65%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Weighted</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Average</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Number of</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Exercise Price</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Options</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Per Option</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Outstanding at January&nbsp;1, 2002</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,762,706</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>1.31</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Granted</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,732,345</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.00</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Exercised</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(22,163</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.21</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Forfeited</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(766,426</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.23</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Outstanding at December&nbsp;31, 2002</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,706,462</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.62</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Granted</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,138,352</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.03</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Exercised</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(10,000</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.38</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Forfeited</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(500,368</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.52</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Outstanding at December&nbsp;31, 2003</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,334,446</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.38</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Granted</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,646,580</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.00</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Exercised</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(9,000</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.60</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Forfeited</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,475,733</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.95</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Outstanding at December&nbsp;31, 2004</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,496,293</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.12</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Details of options outstanding as of December&nbsp;31, 2004 are
as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="58%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Weighted</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Average</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Remaining</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Options</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Contractual</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Options</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="left" nowrap><B>Exercise Price</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Outstanding</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Life</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Exercisable</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    $1.05</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,517,936</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.54</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,517,936</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1.76</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>651,335</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6.31</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>593,562</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2.00</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,404,932</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9.37</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,696,963</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    3.00</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,922,090</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7.46</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,468,127</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Of the options outstanding at December&nbsp;31, 2004, 6,276,588
were exercisable at a weighted-average exercise price of $2.14.
Of the options outstanding at December&nbsp;31, 2003, 5,023,187
were exercisable at a weighted-average exercise price of $2.38.
Of the options outstanding at December&nbsp;31, 2002, 1,280,252
were exercisable at a weighted-average exercise price of $1.22.
All stock options were granted at a price equal to the estimated
fair value of the common stock at the date of grant as
determined by the compensation committee. This determination was
primarily based on a valuation performed by an independent third
party.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Pro forma information regarding net income and earnings per
share, as presented in Note&nbsp;2, is required by
SFAS&nbsp;No.&nbsp;123, as amended by SFAS&nbsp;No.&nbsp;148,
and has been determined as if the Company has accounted for its
employee stock options under the fair value method of
SFAS&nbsp;No.&nbsp;123 as of its effective date. The fair value
of these options was estimated at the date of grant using a
Black-Scholes option-pricing model. The Black-Scholes
option-pricing model is the most common method under
SFAS&nbsp;No.&nbsp;123 for computing fair value. The
Black-Scholes option pricing model was originally developed for
use in estimating the fair value of traded options which have
different characteristics than the Company&#146;s employee stock
options. The model is also sensitive to changes in subjective
assumptions which can materially affect fair value estimates. As
a result, management believes that the Black-Scholes model may
not necessarily provide a reliable single measure of
</DIV>

<P align="center" style="font-size: 10pt;">F-22

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;">
<B>IntercontinentalExchange, Inc.</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>and Subsidiaries</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Notes to Consolidated Financial
Statements&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
the fair value of employee stock options. The pro forma results
are not intended to be indicative of or a projection of future
results.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For SFAS&nbsp;No.&nbsp;123 disclosure purposes, the Company,
using the Black-Scholes option pricing model and the
weighted-average assumptions included in the table below, has
computed the value of all options for shares of common stock
granted to employees. For purposes of pro forma disclosures, the
estimated fair value of the options is amortized to expense over
the options&#146; vesting period.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="71%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Year Ended December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="left" nowrap><B>Assumptions</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2002</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Risk-free interest rate</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.4</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.2</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.4</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Expected life in years</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Expected volatility</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>49</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>40</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>59</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Expected dividend yield</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Estimated weighted-average fair value of options granted per
    share</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.93</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.82</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>1.63</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Restricted Stock Deferral Plan for Outside Directors</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company has adopted the IntercontinentalExchange, Inc. 2003
Restricted Stock Deferral Plan for Outside Directors (the
&#147;Director Plan&#148;). Directors can elect to receive up to
100% of their board compensation in restricted stock or
restricted stock units. All restricted stock is granted at a
price equal to the estimated fair value of the common stock at
the date of grant as determined by the compensation committee.
The restricted stock generally vests over a three-year period.
Under the Director Plan, the compensation committee reserved a
number of the Company&#146;s common stock treasury shares
sufficient to cover obligations under the Director Plan for
issuance to the board of directors in lieu of fees otherwise
payable in cash. During the years ended December&nbsp;31, 2004
and 2003, 12,375 and 15,083&nbsp;shares, respectively, of
restricted stock units were granted to members of the board of
directors under the Director Plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The weighted-average grant date fair value of restricted stock
units granted during the years ended December&nbsp;31, 2004 and
2003 was $2.00 and $2.63, respectively. The fair value of the
restricted shares on the date of the grant is recognized as
expense ratably over the vesting period. During the years ended
December&nbsp;31, 2004 and 2003, deferred stock compensation of
$25,000 and $39,000, respectively, was recorded for the
restricted stock grants issued during the years based on the
fair value of the shares on the date of grant and is being
amortized over three years.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
During the years ended December&nbsp;31, 2004 and 2003, $17,000
and $5,000, respectively, was amortized as compensation and
benefits expenses in the accompanying consolidated statements of
income. The unamortized balance of deferred stock compensation
on restricted stock is included as a separate component of
shareholders&#146; equity in the accompanying consolidated
balance sheets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Restricted Stock Plan</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company has adopted the IntercontinentalExchange, Inc. 2004
Restricted Stock Plan (the &#147;Restricted Plan&#148;). Under
the Restricted Plan, the compensation committee reserved a
number of the Company&#146;s common stock treasury shares
sufficient to cover obligations under the Restricted Plan for
issuance to the employees and board of directors of the Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
During the year ended December&nbsp;31, 2004, a maximum of
5,701,700 restricted shares under the Restricted Plan were
reserved for issuance to senior officers of the Company and
members of the board of directors pursuant to awards of
restricted stock units. Of these shares, 3,200,850 were
time-based restricted shares and vest based on a four-year
vesting schedule. Until the shares vest and are issued, the
participants
</DIV>

<P align="center" style="font-size: 10pt;">F-23

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;">
<B>IntercontinentalExchange, Inc.</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>and Subsidiaries</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Notes to Consolidated Financial
Statements&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
have no voting or dividend rights and the shares may not be
sold, assigned, transferred, pledged or otherwise encumbered. As
of December&nbsp;31, 2004, no restricted treasury shares have
been issued.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The weighted-average grant date fair value of the time-based
restricted stock units granted during the year ended
December&nbsp;31, 2004 was $2.00. The grant date fair value is
determined by the compensation committee primarily based on a
valuation performed by an independent third party. The fair
value of the restricted shares on the date of the grant is
recognized as expense ratably over the vesting period. During
the year ended December&nbsp;31, 2004, deferred stock
compensation of $6.4&nbsp;million was recorded for the
time-based restricted stock grants issued during the year based
on the fair value of the shares on the date of grant and is
being amortized over four years. During the year ended
December&nbsp;31, 2004, $357,000 was amortized as compensation
and benefits expenses in the accompanying consolidated
statements of income. Granted but unvested shares would be
forfeited upon termination of employment. When restricted stock
is forfeited, compensation costs previously recognized for
unvested shares are reversed. The unamortized balance of
deferred stock compensation on restricted stock is included as a
separate component of shareholders&#146; equity in the
accompanying consolidated balance sheets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
An additional 833,617 to 2,500,850 restricted shares under the
Restricted Plan have been reserved for potential issuance as
performance-based restricted shares for the Company&#146;s
senior officers and vest based on Company financial performance
relative to three-year cumulative performance targets (the
&#147;Performance Targets&#148;) set by the compensation
committee for the period from January&nbsp;1, 2005 to
December&nbsp;31, 2007. The measurement of compensation costs
under the performance-based restricted shares at the date the
Performance Targets have been met determines the ultimate
compensation to be recognized in the consolidated financial
statements. The fair market value of the performance-based
restricted stock at the date of vesting will be recorded as
compensation expense. Because this type of plan is classified as
a variable plan, interim estimates of compensation are required
based on a combination of the then fair market value of the
stock at the end of the reporting periods and the extent or
degree of achievement relative to the performance criteria. No
compensation costs or deferred stock compensation costs have
been recorded in the accompanying consolidated financial
statements as of December&nbsp;31, 2004, as the performance
period has not commenced and it is not possible at this time to
determine which, if any, of the Performance Targets will be
achieved. If the Performance Targets are not reached, the
corresponding performance-based restricted shares will not be
issued.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Restricted shares are used as an incentive to attract and retain
qualified senior officers and to increase shareholder returns
with actual performance-based awards based on enhanced
shareholder value. As part of the implementation of the
Restricted Plan, the Company&#146;s senior officers and members
of the board of directors exchanged a total of 3,770,400 stock
options (which represented all options available for exchange)
that had been granted in 2002 at an exercise price of $3.00.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Restricted Plan includes a change in control provision that
may accelerate vesting on both the time-based and
performance-based restricted shares if employment is terminated
or if the individual resigns for &#147;good reason&#148; within
12&nbsp;months after the effective date of a change in control.
This would result in all unamortized deferred stock compensation
relating to the time-based restricted shares being recognized as
compensation expense at the date of the acceleration, which is
the date when both the change in control and the termination in
employment have occurred. All performance-based restricted
shares would also immediately vest and the Company would take a
one time compensation expense charge equal to the maximum number
of performance-based restricted shares multiplied by the fair
market value of the restricted shares at the date of the
acceleration.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Warrants</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In connection with their initial investment in the Company,
certain shareholders in the gas and power industries (the
&#147;Gas and Power Firms&#148;) were granted warrants to
purchase an additional 10% ownership
</DIV>

<P align="center" style="font-size: 10pt;">F-24

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;">
<B>IntercontinentalExchange, Inc.</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>and Subsidiaries</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Notes to Consolidated Financial
Statements&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
interest in the Company, subject to dilution under certain
events. The Gas and Power Firms could have purchased up to
23,216,381&nbsp;shares of Class&nbsp;A, Series&nbsp;2 common
stock upon vesting and exercise of the warrants at an aggregate
exercise price of $75&nbsp;million, or $3.23&nbsp;per share. The
warrants would have vested and become exercisable if the
Company&#146;s average monthly revenue from transaction
commissions and ancillary and back-office services related to
North American power and gas products traded on the Platform
(the &#147;Gas and Power Revenues&#148;) exceeded certain
revenue thresholds (the &#147;Revenue Threshold&#148;) over a
consecutive 12-month period. The measurement period for the
Revenue Threshold began on October&nbsp;1, 2001 and expired on
September&nbsp;30, 2004. If such warrants had vested, the fair
value of the warrants would have been recorded as a reduction to
revenues in the month that vesting occurred based on the value
of the Company at the date of vesting.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For all 12-month periods during the vesting period, the Gas and
Power Revenues were substantially less than the Revenue
Thresholds. Accordingly, such warrants did not vest and
therefore, the Company did not assign any value to the warrants.
The warrants expired unvested on September&nbsp;30, 2004.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Treasury Stock</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
During the year ended December&nbsp;31, 2003, the Company
received 6,704,931 Class&nbsp;A, Series&nbsp;2&nbsp;shares from
certain shareholders of the Company related to an order flow
commitment shortfall in lieu of cash payments to the Company
(Note&nbsp;12). The Company recorded the receipt of the shares
as treasury stock. The Company subsequently reissued 567,696
treasury shares during the year ended December&nbsp;31, 2003.
During the year ended December&nbsp;31, 2004, the compensation
committee reserved 5,701,700 treasury shares for potential
issuance under the Restricted Plan and 27,458 for potential
issuance under the Restricted Stock Deferral Plan for Outside
Directors. Treasury stock activity is presented in the
accompanying consolidated statements of changes in
shareholders&#146; equity.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B>10.</B></TD>
    <TD>
    <B>Income Taxes</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For the years ended December&nbsp;31, 2004, 2003 and 2002,
income before income taxes from domestic operations was
$10.0&nbsp;million, $386,000 and $35.1&nbsp;million,
respectively, and income before income taxes from foreign
operations was $23.7&nbsp;million, $19.5&nbsp;million and
$17.3&nbsp;million, respectively. Details of the income tax
provision in the accompanying consolidated statements of income
for the years ended December&nbsp;31, 2004, 2003 and 2002, are
as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="66%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Year Ended December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2002</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>(in thousands)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Current tax expense:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Domestic</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>4,992</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>289</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>9,771</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Foreign</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,360</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,662</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,909</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2"><FONT style="font-size: 10pt">&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,352</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,951</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,680</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred tax expense (benefit):</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Domestic</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(298</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(402</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,953</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Foreign</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(281</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(60</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>106</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2"><FONT style="font-size: 10pt">&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(579</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(462</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,059</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total tax expense</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>11,773</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>6,489</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>17,739</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;">F-25

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;">
<B>IntercontinentalExchange, Inc.</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>and Subsidiaries</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Notes to Consolidated Financial
Statements&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The tax effects of temporary differences between the carrying
amount of assets and liabilities in the consolidated financial
statements and their respective tax bases which give rise to
deferred tax assets (liabilities)&nbsp;as of December&nbsp;31,
2004 and 2003 are as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="72%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>(in thousands)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred tax assets:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Allowance for doubtful accounts</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>53</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>22</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Book depreciation in excess of tax</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>591</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred compensation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>134</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accrued expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>867</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>673</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total deferred tax assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,649</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>695</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred tax liabilities:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Capitalization and amortization of software development costs</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,787</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,027</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Tax depreciation in excess of books</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(315</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Property and intangible costs</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,001</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,448</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Tax accrued on undistributed earnings of foreign subsidiaries
    (pre and post acquisition earnings)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(5,030</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,401</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(498</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(350</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total deferred tax liabilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(10,316</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(9,541</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net deferred tax liabilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(8,667</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(8,846</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net current deferred tax assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>426</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>345</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net noncurrent deferred tax liabilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(9,093</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(9,191</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A reconciliation of the statutory U.S.&nbsp;federal income tax
rate to the Company&#146;s effective income tax rate for the
years ended December&nbsp;31, 2004, 2003 and 2002 are as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="73%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Year Ended</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2002</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Statutory federal income tax rate</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35.0</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35.0</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35.0</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    State income taxes, net of federal benefit</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.7</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Tax credits</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(0.5</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1.2</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(0.8</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(0.1</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1.3</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2.1</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total provision for income taxes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34.9</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32.7</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33.8</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The pre and post acquisition undistributed earnings of the
Company&#146;s foreign subsidiaries based on the period-end
exchange rates totaled $71.5&nbsp;million and $54.1&nbsp;million
as of December&nbsp;31, 2004 and 2003, respectively, which will
not be subject to U.S.&nbsp;income tax until distributed. The
Company has provided for U.S.&nbsp;federal income taxes on these
undistributed earnings in the accompanying consolidated
statements of income as they are not expected to be permanently
reinvested.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Jobs Act provides for a temporary 85% dividends received
deduction on certain foreign earnings repatriated during a
one-year period. The deduction would result in an approximate
5.25% federal tax rate on
</DIV>

<P align="center" style="font-size: 10pt;">F-26

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;">
<B>IntercontinentalExchange, Inc.</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>and Subsidiaries</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Notes to Consolidated Financial
Statements&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
the repatriated earnings. To qualify for the deduction, the
earnings must be reinvested in the U.S.&nbsp;pursuant to a
domestic reinvestment plan established by the Company&#146;s
chief executive officer and approved by the Company&#146;s board
of directors. Certain other criteria in the Jobs Act must be
satisfied as well. The maximum amount of the Company&#146;s
foreign earnings that qualify for the temporary deduction is
$71.5&nbsp;million as of December&nbsp;31, 2004.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company is in the process of evaluating whether it will
repatriate foreign earnings under the repatriation provisions of
the Jobs Act, and if so, the amount that will be repatriated. As
substantially all of the Company&#146;s foreign earnings have
been subject to tax at a local country rate of approximately 30%
or greater, the application of this new repatriation provision
to these earnings may result in insignificant or no benefit to
the Company. The Company is awaiting the issuance of further
regulatory guidance and passage of statutory technical
corrections with respect to certain provisions in the Jobs Act
prior to deciding whether to repatriate funds under the Jobs
Act. It anticipates making a decision within a reasonable time
period following the issuance of such clarifying regulations and
enactment of technical corrections legislation. The range of
reasonably possible amounts that the Company is considering for
repatriation under the Jobs Act is zero to $71.5&nbsp;million.
The reasonably possible range of related tax expense is zero to
the amount of deferred taxes currently provided for
undistributed earnings of foreign subsidiaries.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B>11.</B></TD>
    <TD>
    <B>Related-Parties</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Related-parties include principal owners of the Company and
other parties that control or can significantly influence the
management or operating policies of the Company. Principal
owners include any party that owns more than 10% of the voting
interest in or common stock of the Company. The Company has
classified all companies that had board of director
participation as a related-party due to their significant
influence over the Company. Through the end of October 2002, ten
shareholders had a seat on the Company&#146;s board of
directors. Beginning in November 2002, these companies no longer
had representation on the Company&#146;s board of directors and,
except for two shareholders who held more than 10% of the common
stock of the Company, were no longer considered related-parties.
CCX is considered a related-party due to the founder and Chief
Executive Officer of CCX being a member of the Company&#146;s
board of directors. Revenues earned from related-parties of the
Company totaled $12.9&nbsp;million, $12.2&nbsp;million and
$52.8&nbsp;million for the years ended December&nbsp;31, 2004,
2003 and 2002, respectively. As of December&nbsp;31, 2004 and
2003, the Company had $1.3&nbsp;million and $1.1&nbsp;million,
respectively, in accounts receivable from related-parties.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On May&nbsp;11, 2000, the Company entered into the Term Note
agreements with two related-parties, which were repaid in
November 2002. See Note&nbsp;7 for more detail of these
related-party notes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company entered into annual order flow commitments with
related-party companies, which committed these companies to
execute a minimum annual volume of transactions through the
Platform. See Note&nbsp;12 for more detail on these
related-party order flow commitments.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company entered into several foreign exchange forward
contracts with a related-party company during the year ended
December&nbsp;31, 2004 (Note&nbsp;13). The Company paid $353,000
relating to these hedges during the year ended December&nbsp;31,
2004 to this related-party company. The Company also had an
additional $1.3&nbsp;million accrued to this related-party
company as of December&nbsp;31, 2004 relating to a hedge that
expires in June 2005, which is included in accrued liabilities
in the accompanying consolidated balance sheets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
During 2001, the Company advanced $500,000 to a senior officer
of the Company, with the loan due in five installments of
$100,000 over a five-year period. The payments would be forgiven
each year based on continued employment by the officer. The
forgiveness each year was recorded as compensation and benefits
expense in the accompanying consolidated statements of income.
As of December&nbsp;31, 2003, the balance of the
</DIV>

<P align="center" style="font-size: 10pt;">F-27

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;">
<B>IntercontinentalExchange, Inc.</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>and Subsidiaries</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Notes to Consolidated Financial
Statements&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
note totaled $201,000. The remaining balance was forgiven during
the year ended December&nbsp;31, 2004 in connection with the
officer entering into a new employment agreement (Note&nbsp;13).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company&#146;s predecessor company, Continental Power
Exchange, Inc. (&#147;CPEX&#148;), is owned by a senior officer
of the Company. The Company currently has a put agreement with
CPEX. Under the terms of the agreement, in certain
circumstances, CPEX has the right to require the Company to
purchase all, but not less than all, of the Company&#146;s
common stock held by CPEX for an amount equal to the greater of
fair market value at the date the put is exercised, or
$5&nbsp;million. CPEX owns 9,961,298&nbsp;shares of the
Company&#146;s common stock and based on the $2.00 estimated
fair value of the common stock as of December&nbsp;31, 2004, the
fair market value of the common stock held by CPEX is in excess
of the $5&nbsp;million threshold. Upon exercise of the put
option, the Company can either pay cash within 30&nbsp;days of
the exercise or can elect to issue a promissory note and defer
payment for one year, with interest accruing on the note at
LIBOR plus 1%.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B>12.</B></TD>
    <TD>
    <B>Order Flow Commitments</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Certain of the Company&#146;s founding shareholders (the
&#147;Founding Shareholders&#148;) and the Gas and Power Firms
executed annual order flow commitments in connection with the
formation of, and their investment in, the Company, which
committed them to transact a minimum volume of various
transactions through the Platform. The Company also entered into
order flow commitments with seven companies (the &#147;Euro Gas
Order Flow Providers&#148;) during November 2001 to trade
European gas products on the Platform.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Founding Shareholders&#146; Commitments</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Founding Shareholders entered into annual order flow
commitments with the Company, whereby such members individually
committed to enter into an annual minimum volume of executed oil
and/or precious metals transactions through the Platform. The
Founding Shareholders&#146; annual order flow commitments reset
each year and were for a two-year period, which began in
September 2000 and expired in August 2002 for precious metals
transactions and began in November 2000 and expired in October
2002 for oil transactions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the terms of the Founding Shareholders&#146; annual order
flow commitments, in the event that such members failed to meet
the minimum volume of transactions specified in the agreements,
imputed on a month-to-date basis, such members were billed for
the difference between the imputed monthly minimum commitment
and any actual executed transactions by such members or their
affiliates, multiplied by an imputed commission rate. To the
extent that the Founding Shareholders transacted sufficient
volume to satisfy the order flow commitments at any point in the
annual commitment period, any amounts previously billed as order
flow shortfall were refunded to the Founding Shareholders.
Therefore, monthly billings related to unmet order flow
commitments were recorded as deferred revenue and not recognized
until the end of the annual commitment periods as these amounts
were potentially refundable. For the year ended
December&nbsp;31, 2002, the Company recognized $2.2&nbsp;million
in transaction fee revenues related to unmet Founding
Shareholders&#146; annual order flow commitments for the
commitment periods that expired during the year.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Gas and Power Firms&#146; Commitments</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the terms of the Gas and Power Firms&#146; annual order
flow agreement, the Gas and Power Firms committed as a group to
enter into an annual minimum volume of executed North American
power and gas transactions through the Platform. The Gas and
Power Firms&#146; annual order flow commitments reset each year
and were for a two-year period, which began in July 2001 and
expired in June 2003. Under the terms of this agreement, in the
event that the Gas and Power Firms failed to meet the minimum
volume of transactions specified in the agreement, imputed on a
month-to-date basis, the Gas and Power Firms were billed for the
difference between the imputed monthly minimum commitment and
any actual executed transactions by the
</DIV>

<P align="center" style="font-size: 10pt;">F-28

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;">
<B>IntercontinentalExchange, Inc.</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>and Subsidiaries</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Notes to Consolidated Financial
Statements&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
members or their affiliates, multiplied by an imputed commission
rate. To the extent that the Gas and Power Firms transacted
sufficient volume to satisfy the order flow commitments at any
point in the annual commitment period, any amounts previously
billed as order flow shortfall were refunded to the Gas and
Power Firms. Therefore, monthly billings related to unmet order
flow commitments were recorded as deferred revenue and not
recognized until the end of the annual commitment periods as
these amounts were potentially refundable.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For the year ended December&nbsp;31, 2003, the Company
recognized $6.4&nbsp;million in transaction fee revenues related
to unmet Gas and Power Firms&#146; annual order flow commitment
for the commitment period that expired during the year. A
portion of the shortfall was paid in cash and the remainder was
satisfied through the delivery to the Company of shares of the
Company&#146;s Class&nbsp;A, Series&nbsp;2 common stock
(Note&nbsp;9). The fair market value of the Company&#146;s
common stock received from the Gas and Power Firms was in excess
of the contractual obligation owed under the order flow
shortfall. However, the Company only recognized revenues to the
extent of the contractual order flow commitment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
There were no revenues recognized during the year ended
December&nbsp;31, 2002 relating to the Gas and Power Firms&#146;
annual order flow agreement as the Gas and Power Firms exceeded
their commitment in the first annual commitment period.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Euro Gas Order Flow Providers&#146; Commitments</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Euro Gas Order Flow Providers individually committed to
enter into executed transactions for European gas (&#147;Euro
Gas&#148;) product groups through the Platform which resulted in
annual or monthly minimum transaction payments to the Company.
The Euro Gas Order Flow Providers&#146; order flow commitments
began in January 2002 and continued through December 2004. Under
the terms of such order flow agreements, in the event that the
Euro Gas Order Flow Providers failed to execute the annual or
monthly required minimum transactions, the Euro Gas Order Flow
Providers paid to the Company the difference in transaction fees
actually paid and minimum payments required under the order flow
agreements. During the years ended December&nbsp;31, 2004, 2003
and 2002, the Company recognized $1.1&nbsp;million, $764,000 and
$1.3&nbsp;million, respectively, in transaction fee revenues
related to unmet Euro Gas Order Flow Providers&#146; order flow
commitments for commitment periods that expired during such
years.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Euro Gas Order Flow Providers originally received reduced
commission rates for executed transactions for Euro Gas products
as a result of their commitments in the order flow agreements.
However, beginning in March 2003, the Company reduced commission
rates for all other customers to be equal to the Euro Gas Order
Flow Providers commission rates. The order flow agreements also
required the Company to distribute to the Euro Gas Order Flow
Providers their respective share of a revenue sharing pool
annually through 2006. The revenue sharing pool was equal to 20%
of the transaction fee revenues earned by the Company from
trading of all Euro Gas product groups, subject to certain
adjustments. The Euro Gas Order Flow Providers do not share in
the revenue sharing pool, for the current year and for all
future years, if they do not trade a minimum annual volume of
executed transactions for Euro Gas product groups through the
Platform to become an eligible order flow provider. For the
years ended December&nbsp;31, 2003 and 2002, the Company paid
$61,000 and $188,000, respectively, relating to the revenue
sharing pool to certain Euro Gas Order Flow Providers that
qualified as eligible order flow providers. The Company recorded
the revenue sharing pool amounts payable to the Euro Gas Order
Flow Providers as a reduction to transaction fee revenues.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2003, none of the Euro Gas Order Flow
Providers qualified as eligible order flow providers. Under the
terms of the Euro Gas Order Flow Providers&#146; commitments,
the Company is therefore, no longer required to accrue or pay
any amounts relating to the revenue sharing pools subsequent to
December&nbsp;31, 2003.
</DIV>

<P align="center" style="font-size: 10pt;">F-29

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;">
<B>IntercontinentalExchange, Inc.</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>and Subsidiaries</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Notes to Consolidated Financial
Statements&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B>13.</B></TD>
    <TD>
    <B>Commitments and Contingencies</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Leases</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company leases office space, equipment facilities, and
certain computer equipment. As of December&nbsp;31, 2004, future
minimum lease payments under these noncancelable agreements are
as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="73%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Operating</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Capital</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>(in thousands)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>1,867</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>512</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2006</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,309</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2007</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,047</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2008</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>761</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>4,984</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>512</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Less amounts representing interest and tax</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Present value of minimum lease payment, current portion</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>482</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2004, 2003 and 2002, the Company had
capital lease obligations of $482,000, $2.1&nbsp;million and
$2.7&nbsp;million, respectively. The amortization of assets
recorded under capital leases is included in depreciation
expense in the accompanying consolidated statements of income
and totaled $1.2&nbsp;million, $2.8&nbsp;million and
$2.3&nbsp;million for the years ended December&nbsp;31, 2004,
2003 and 2002, respectively. Rental expense amounted to
$5.3&nbsp;million, $5.2&nbsp;million and $5.6&nbsp;million for
the years ended December&nbsp;31, 2004, 2003 and 2002,
respectively.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Licensing Agreement</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In March 2002, the Company entered into a long-term,
non-exclusive licensing agreement with a third party, which
granted the use of the third party&#146;s patent to the Company
and its majority-owned and controlled affiliates. The patent
relates to automated futures trading systems in which
transactions are completed by a computerized matching of bids
and offers of futures contracts on an electronic platform. The
license of the patent provides legal certainty to traders,
clearing banks and brokers wishing to utilize the Company&#146;s
Platform for trading futures contracts from within the
U.S.&nbsp;Under the agreement, the Company is required to pay
minimum annual license fees of $2.0&nbsp;million beginning
April&nbsp;5, 2002 through the expiration date of the patent in
February 2007 along with additional royalty payments calculated
quarterly, which have been insignificant through December 2004.
The agreement covers the Company&#146;s use of the patent in
certain markets including energy, certain metals, weather,
sulfur and nitrogen pollution allowances and financial products
specifically related to products in these markets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company recorded amortization expense of $2.0&nbsp;million,
$2.0&nbsp;million and $1.5&nbsp;million during the years ended
December&nbsp;31, 2004, 2003 and 2002, respectively, relating to
the licensing agreement. As of December&nbsp;31, 2004 and 2003,
the balance of $500,000 relating to the unamortized annual
license fee payment is included in prepaid expenses in the
accompanying consolidated balance sheets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Employment Agreements</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company has entered into employment agreements with all of
its corporate officers. If the corporate officers are terminated
without cause, the employment agreements result in separation
payments ranging from six months to three years of the corporate
officer&#146;s annual base salary. In some cases, the employment
agreements also stipulate an additional payment for bonus
compensation for the balance of the term of the
</DIV>

<P align="center" style="font-size: 10pt;">F-30

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;">
<B>IntercontinentalExchange, Inc.</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>and Subsidiaries</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Notes to Consolidated Financial
Statements&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
employment agreement. Also, certain employment agreements have
provisions that provide for termination payments following a
change of control and corresponding loss of employment, which
generally provide for base salary, bonus payment, benefits
continuation for the full term of the employment agreement
(ranging from one to three years), gross up payment for any
excise taxes due under Section&nbsp;4999 of the Internal Revenue
Code of 1986 and the acceleration of vesting of any stock
options granted after the execution of the employment agreements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company&#146;s U.K. subsidiaries, in accordance with normal
U.K. practice, have entered into employment agreements with all
of its employees. The employment agreements require a severance
notice ranging from one to six months.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Legal Proceedings</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In November 2002, the New York Mercantile Exchange, Inc.
(&#147;NYMEX&#148;) filed suit against the Company in United
States District Court, Southern District of New York. In the
suit, NYMEX alleges that the Company has infringed certain
intellectual property rights of NYMEX through the use of
settlement prices of futures contracts listed on NYMEX and
references to NYMEX in describing products traded on the
Platform. The Company filed an answer and counterclaims in
January 2003. NYMEX filed a motion to dismiss the Company&#146;s
counterclaims, which was denied in part and granted in part,
with leave for the Company to amend its counterclaims. The
Company filed an amended and restated answer and counterclaims
in August 2003. The Company&#146;s amended counterclaims
asserted that NYMEX has engaged in violations of the federal
antitrust laws by, among other things, seeking to prevent the
Company from accessing its settlement prices. The counterclaims
also sought a declaratory judgment that NYMEX does not hold a
copyright in its settlement prices, that any copyright found
cannot be enforced against the Company, and that the Company has
not infringed any copyright.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
NYMEX filed a motion to dismiss the Company&#146;s amended
counterclaims, and the court granted NYMEX&#146;s motion and
dismissed the Company&#146;s antitrust counterclaims in June
2004. In September 2004, the Company filed a motion for summary
judgment seeking judgment as a matter of law with respect to the
claims in NYMEX&#146;s complaint. In November 2004, NYMEX filed
a cross motion for summary judgment seeking judgment as a matter
of law regarding the issue of copyrightability of its settlement
prices and with respect to its claim that the Company tortuously
interfered with a contract between NYMEX and the party from
which the Company licenses NYMEX&#146;s settlement prices. The
Court heard oral argument on the cross motions for summary
judgment in February 2005, but has yet to issue an order.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
No trial date has been scheduled in this action. At this point
in time, the Company does not believe that the resolution of
this matter will have a material adverse effect on the
Company&#146;s consolidated financial condition, results of
operations, or liquidity.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In January 2004, EBS Dealing Resources, Inc. (&#147;EBS&#148;)
filed a complaint against the Company in United States District
Court, Southern District of New York, alleging that the Company
infringes two patents held by EBS related to credit filter
technology for electronic brokerage systems. The Company filed
an answer denying liability in March 2004. EBS has requested
injunctive relief and monetary damages for the alleged patent
infringement, but has not specified an amount of damages in its
complaint. Fact discovery in the case is scheduled to conclude
in March 2005, with a trial set for February 2006 pursuant to
the court&#146;s present scheduling order. At this point in
time, the Company does not believe that the resolution of this
matter will have a material adverse effect on the Company&#146;s
consolidated financial condition, results of operations, or
liquidity.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company is subject to other potential legal proceedings and
claims which arise in the ordinary course of business. The
Company has concluded that these proceedings and claims have not
proceeded sufficiently for
</DIV>

<P align="center" style="font-size: 10pt;">F-31

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;">
<B>IntercontinentalExchange, Inc.</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>and Subsidiaries</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Notes to Consolidated Financial
Statements&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
their likely outcomes to be determinable. It is possible,
however, that future results of operations for any particular
quarterly or annual period could be materially and adversely
affected by any new developments relating to these proceedings
and claims, including the NYMEX and EBS suits discussed above.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Foreign Currency Hedging Transactions</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A significant portion of the Company&#146;s revenues, earnings
and net assets are exposed to changes in foreign exchange rates,
primarily relating to the operations of the IPE and the other
U.K.-based subsidiaries in relation to pounds sterling. For the
years ended December&nbsp;31, 2004, 2003 and 2002, the U.K.
subsidiaries&#146; average exchange rate of pounds sterling to
the U.S.&nbsp;dollar, which was used to translate the U.K.
subsidiaries&#146; revenues and expenses into U.S.&nbsp;dollars,
was 1.8296, 1.6341 and 1.5071, respectively. The appreciation of
pounds sterling relative to the U.S.&nbsp;dollar has had a
significant impact on the Company&#146;s operating results due
to the significance of our U.K-based subsidiaries&#146;
operations (Note&nbsp;15). The Company seeks to manage its
foreign exchange risk and exposure in part through operational
means, including managing expected local currency revenues in
relation to local currency expenses (primarily through billing
certain IPE fees in U.S.&nbsp;dollars) and local currency assets
in relation to local currency liabilities (primarily through
converting the U.K. subsidiaries cash to U.S.&nbsp;dollar
denominated investments). In addition, as discussed in
Note&nbsp;2, the Company entered into forward exchange
instruments during the years ended December&nbsp;31, 2004 and
2003 to protect a portion of the net investments in its foreign
subsidiaries from adverse fluctuations in foreign exchange rates.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The foreign exchange forward contract derivative financial
instruments had maturities ranging from two months to eight
months. As of December&nbsp;31, 2004 and 2003, the Company had
hedged $24.9&nbsp;million and $36.6&nbsp;million, respectively,
of the $58.2&nbsp;million and $52.5&nbsp;million, respectively,
in foreign subsidiaries net assets held in pounds sterling based
on the year-end exchange rates. Under SFAS&nbsp;No.&nbsp;133,
changes in the fair value of these derivative financial
instruments are recognized as a component of accumulated other
comprehensive income, to offset the change in value of the net
investment being hedged. For the years ended December&nbsp;31,
2004 and 2003, $2.1&nbsp;million and $441,000, respectively, of
losses, net of taxes, relating to the derivative financial
instruments were recorded in accumulated other comprehensive
income in the accompanying consolidated statements of
comprehensive income. As of December&nbsp;31, 2004 and 2003,
$1.3&nbsp;million and $708,000, respectively, relating to the
derivative financial instruments were included in accrued
liabilities in the accompanying consolidated balance sheets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
When entered into, the Company formally designates and documents
the derivative financial instrument as a hedge of a specific
underlying exposure, as well as the risk management objectives
and strategies for undertaking the hedge transactions. The
Company formally assesses, both at inception and at least
quarterly thereafter, whether the derivative financial
instruments that are used in hedging transactions are effective
at offsetting changes in either the fair value or cash flows of
the related underlying exposure. Because of the high degree of
effectiveness between the hedging instruments and the underlying
exposure being hedged, fluctuations in the value of the
derivative financial instruments are offset by changes in the
fair value or cash flows of the underlying exposures being
hedged. The Company&#146;s derivatives are OTC financial
instruments with liquid markets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company does not enter into derivative financial instruments
for trading purposes. The counterparties with whom the Company
trades foreign exchange contracts are major U.S. and
international financial institutions, including one which is a
related-party (Note&nbsp;11). The Company continually monitors
its position with and the credit quality of the financial
institutions and does not expect nonperformance by the
counterparties.
</DIV>

<P align="center" style="font-size: 10pt;">F-32

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;">
<B>IntercontinentalExchange, Inc.</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>and Subsidiaries</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Notes to Consolidated Financial
Statements&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B>14.</B></TD>
    <TD>
    <B>Employee Benefit Plans</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Employees of the Company are eligible to participate in the
Company&#146;s 401(k) and Profit Sharing Plan (the &#147;401(k)
Plan&#148;). The Company offers a match of 100% of the first 5%
of the eligible employee&#146;s compensation contributed to the
401(k) Plan, subject to plan and statutory limits. Total
matching contributions under the Company&#146;s 401(k) Plan for
the years ended December&nbsp;31, 2004, 2003 and 2002 were
$617,000, $556,000 and $473,000, respectively. No discretionary
or profit sharing contributions were made during the years ended
December&nbsp;31, 2004, 2003 or 2002.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company&#146;s U.K.-based subsidiaries have a defined
contribution pension plan for eligible employees. The Company
contributes a percentage of the employee&#146;s base salary to
the plan each month and employees are also able to make
additional voluntary contributions, subject to plan and
statutory limits. The Company&#146;s contribution ranges from
10% to 20% of the employee&#146;s base salary. Total pension
contributions made by the Company for the years ended
December&nbsp;31, 2004, 2003 and 2002 were $789,000, $750,000
and $617,000, respectively.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B>15.</B></TD>
    <TD>
    <B>Segment Reporting</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company&#146;s principal business segments consist of its
OTC business and its futures business. The operations of ICE
Services U.S., 10x, ICE Services UK and ICE Tech have been
included in the OTC business segment as they primarily support
the Company&#146;s OTC business operations. Prior to the
Company&#146;s acquisition of the IPE in June 2001, the Company
had only one reportable business segment, the OTC business,
which was limited to the U.S.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Intersegment revenues and transactions attributable to the
performance of services are recorded at cost plus an agreed
market percentage intercompany profit. Intersegment revenues
attributable to licensing transactions have been priced in
accordance with comparable third party agreements. The Company
had $7.9&nbsp;million and $4.8&nbsp;million in intersegment
revenues during the years ended December&nbsp;31, 2004 and 2003,
respectively, primarily relating to fees paid from the futures
business segment to the OTC business segment as required under
the technical services agreement.
</DIV>

<P align="center" style="font-size: 10pt;">F-33

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;">
<B>IntercontinentalExchange, Inc.</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>and Subsidiaries</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Notes to Consolidated Financial
Statements&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The accounting policies of the business segments are the same as
those described in the summary of significant accounting
policies. Financial data for the Company&#146;s business
segments and geographic areas are as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="63%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>OTC</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Futures</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Business</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Business</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Segment</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Segment</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>(in thousands)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Year ended December&nbsp;31, 2004:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Revenues from external customers</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>52,907</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>55,507</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>108,414</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Intersegment revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,530</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>353</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,883</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Depreciation and amortization</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,609</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,415</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,024</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>939</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,946</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,885</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest expense</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>137</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>137</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Income tax expense</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,366</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,407</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,773</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,337</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,612</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21,949</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>149,450</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>58,068</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>207,518</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Capital expenditures and software development costs</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,431</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,113</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,544</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Goodwill and other intangibles, net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>86,075</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>86,075</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net cash provided by operating activities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,230</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20,931</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>40,161</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Geographic areas:</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="63%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>United</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>European</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>States</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Union</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>(in thousands)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Year ended December&nbsp;31, 2004:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>53,009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>55,405</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>108,414</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    As of December&nbsp;31, 2004:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Property and equipment, net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,263</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,101</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,364</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Revenues from one customer of the futures business segment
comprised 13% of the Company&#146;s futures revenues for the
year ended December&nbsp;31, 2004. No additional customers
accounted for more than 10% of the Company&#146;s segment
revenues or consolidated revenues during the year ended
December&nbsp;31, 2004.
</DIV>

<P align="center" style="font-size: 10pt;">F-34

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;">
<B>IntercontinentalExchange, Inc.</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>and Subsidiaries</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Notes to Consolidated Financial
Statements&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 18pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="62%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>OTC</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Futures</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Business</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Business</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Segment</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Segment</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>(in thousands)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Year ended December&nbsp;31, 2003:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Revenues from external customers</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>44,652</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>49,094</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>93,746</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Intersegment revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,735</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>79</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,814</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Depreciation and amortization</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,224</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,117</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,341</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>462</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,232</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,694</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest expense</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>80</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>80</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Income tax (benefit) expense</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(781</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,270</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,489</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net (loss) income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(126</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,503</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,377</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>158,211</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>56,668</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>214,879</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Capital expenditures and software development costs</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,133</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,649</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,782</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Goodwill and other intangibles, net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>81,448</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>81,448</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net cash provided by operating activities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,807</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,286</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>27,093</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Geographic areas:</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="64%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>United</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>European</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>States</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Union</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>(in thousands)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Year ended December&nbsp;31, 2003:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>45,635</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>48,111</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>93,746</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    As of December&nbsp;31, 2003:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Property and equipment, net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,283</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,342</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25,625</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Revenues from one customer of the futures business segment
comprised 15% of the Company&#146;s futures revenues for the
year ended December&nbsp;31, 2003. No additional customers
accounted for more than 10% of the Company&#146;s segment
revenues or consolidated revenues during the year ended
December&nbsp;31, 2003.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="62%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>OTC</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Futures</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Business</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Business</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Segment</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Segment</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>(in thousands)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Year ended December&nbsp;31, 2002:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>87,345</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>38,145</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>125,490</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Depreciation and amortization</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,406</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>962</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,368</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,033</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>923</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,956</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest expense</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>400</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>400</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Income tax expense</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,679</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,060</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,739</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23,452</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,254</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34,706</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>127,403</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>42,650</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>170,053</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Capital expenditures and software development costs</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,194</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,597</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20,791</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Goodwill and other intangibles, net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73,950</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73,950</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net cash provided by operating activities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>38,497</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,675</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>51,172</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;">F-35

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;">
<B>IntercontinentalExchange, Inc.</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>and Subsidiaries</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Notes to Consolidated Financial
Statements&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Geographic areas:</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="63%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>United</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>European</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>States</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Union</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>(in thousands)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Year ended December&nbsp;31, 2002:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>85,322</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>40,168</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>125,490</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    As of December&nbsp;31, 2002:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Property and equipment, net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22,285</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,558</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32,843</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Revenues from one customer of the OTC business segment comprised
10% of the Company&#146;s consolidated revenues and 14% of the
Company&#146;s OTC revenues for the year ended December&nbsp;31,
2002. Revenues from one customer of the futures business segment
comprised 13% of the Company&#146;s futures revenues for the
year ended December&nbsp;31, 2002.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B>16.</B></TD>
    <TD>
    <B>Earnings Per Common Share</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following is a reconciliation of the numerators and
denominators of the basic and diluted earnings per common share
computations for the years ended December&nbsp;31, 2004, 2003
and 2002:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="52%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Year Ended December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2002</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>(in thousands, except per share amounts)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Basic:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income available to common shareholders</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>21,949</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>11,609</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>31,050</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Weighted average common shares outstanding</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>211,460</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>217,316</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>217,570</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Basic earnings per common share</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.14</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Diluted:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Weighted average common shares outstanding</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>211,460</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>217,316</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>217,570</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Effect of dilutive securities:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Stock options and warrants</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>788</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,243</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,830</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Diluted weighted average common shares outstanding</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>212,248</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>218,559</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>219,400</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Diluted earnings per common share</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.14</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The 11,450,319 Class&nbsp;B redeemable common shares, the
unvested restricted shares granted and substantially all of the
Gas and Power Firms&#146; warrants to purchase&nbsp;23,216,381
common shares have not been included in the computation of
diluted earnings per share in the applicable periods when they
were outstanding because their effects would be antidilutive.
</DIV>

<P align="center" style="font-size: 10pt;">F-36

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;">
<B>IntercontinentalExchange, Inc.</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>and Subsidiaries</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Notes to Consolidated Financial
Statements&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B>17.</B></TD>
    <TD>
    <B>Quarterly Financial Data (Unaudited)</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table has been prepared from the financial records
of the Company, and reflects all adjustments that are, in the
opinion of management, necessary for a fair presentation of the
results of operations for the interim periods presented.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="45%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>1st&nbsp;Qtr</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2nd&nbsp;Qtr(a)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>3rd&nbsp;Qtr</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>4th&nbsp;Qtr(b)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap><B>(in thousands, except per share amounts)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Year Ended December&nbsp;31, 2004</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>24,213</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>26,258</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>29,447</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>28,496</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>108,414</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Operating income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,878</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,745</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,717</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,054</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32,394</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income available to common shareholders</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,622</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,437</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,051</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,839</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21,949</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Earnings per common share&nbsp;&#151; Basic and Diluted</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.02</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.03</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.03</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.02</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.10</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Year Ended December&nbsp;31, 2003</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>24,168</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>26,361</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>20,837</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>22,380</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>93,746</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Operating income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,279</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,981</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,231</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,427</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,918</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income available to common shareholders</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,771</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,746</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,567</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,525</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,609</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Earnings per common share&nbsp;&#151; Basic and Diluted</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.01</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.02</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.01</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.01</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.05</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD valign="top">
    (a)</TD>
    <TD></TD>
    <TD valign="top">
    The Company recognized $6.4&nbsp;million in revenues during the
    second quarter of 2003 relating to unmet order flow commitments
    for commitment periods that expired during the quarter
    (Note&nbsp;12).</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    (b)</TD>
    <TD></TD>
    <TD valign="top">
    The Company recognized $2.3&nbsp;million in a special fee rebate
    program during the fourth quarter of 2004. The fee rebate was
    shown as a reduction to revenues and was designed to promote the
    electronic futures trading on our Platform (Note&nbsp;2).</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B>18.</B></TD>
    <TD>
    <B>Subsequent Events (Unaudited)</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On January&nbsp;5, 2005, the compensation committee granted
options to members of the board of directors to
purchase&nbsp;700,000&nbsp;shares of common stock under the Plan
at $2.00&nbsp;per share. All options were granted at a price
equal to the estimated fair value of the common stock on the
date of grant as determined by the compensation committee. These
options vest over four years and expire ten years after the date
of grant.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On March&nbsp;7, 2005, the Company announced its intention to
close its open-outcry trading floor in London on April&nbsp;7,
2005. This was done to take advantage of the increasing
acceptance and adoption of electronic trading and to maintain
and enhance the Company&#146;s competitive position. Thereafter,
all of the futures trading will be conducted exclusively on the
Platform. The Company currently estimates that it will incur
costs primarily in the second quarter of 2005 ranging from
$6.0&nbsp;million to $8.0&nbsp;million in connection with the
closure of the open-outcry trading floor. These expenses
primarily include lease termination costs, employee termination
costs and property and equipment disposals relating to the
open-outcry trading floor.
</DIV>

<P align="center" style="font-size: 10pt;">F-37
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 2pt;">
<DIV style="width: 100%; border-top: 2.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 3pt;">
<DIV style="width: 100%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No
dealer, salesperson or other person is authorized to give any
information or to represent anything not contained in this
prospectus. You must not rely on any unauthorized information or
representations. This prospectus is an offer to sell only the
shares offered hereby, but only under circumstances and in
jurisdictions where it is lawful to do so. The information
contained in this prospectus is current only as of its date.</B>
</DIV>

<DIV align="center" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 26%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>TABLE OF CONTENTS</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="90%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Page</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Prospectus Summary</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Risk Factors</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Forward-Looking Statements</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>28</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Use of Proceeds</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Dividend Policy</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Capitalization</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Dilution</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>31</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Selected Consolidated Financial Data</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Management&#146;s Discussion and Analysis of Financial Condition
    and Results of Operations</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>36</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Industry Overview</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>75</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Business</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>86</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Regulation and Legal Proceedings</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>109</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Management</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>113</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Certain Relationships and Related Transactions</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>125</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Principal and Selling Shareholders</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>131</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Organization and Recapitalization</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>134</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Description of Capital Stock</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>136</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Shares Eligible for Future Sale</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>140</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Certain United States Tax Consequences to Non-U.S.&nbsp;Holders
    of Common Stock</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>142</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Underwriting</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>145</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Validity of the Common Stock</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>148</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Experts</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>148</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Where You Can Find More Information</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>148</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Index to Financial Statements</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>F-1</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless
otherwise indicated, all information in this prospectus assumes
that the underwriters&#146; over-allotment option will not be
exercised.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Through
and
including &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2005 (the 25th day after the date of this prospectus), all
dealers effecting transactions in these securities, whether or
not participating in this offering, may be required to deliver a
prospectus. This is in addition to a dealer&#146;s obligation to
deliver a prospectus when acting as an underwriter with respect
to an unsold allotment or subscription.
</DIV>

<DIV align="center" style="font-size: 3pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 100%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 4pt;">
<DIV style="width: 100%; border-top: 2.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 2pt;">
<DIV style="width: 100%; border-top: 2.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 3pt;">
<DIV style="width: 100%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 14pt; margin-top: 36pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
Shares
</DIV>

<DIV align="center" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 26%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<IMG src="y06540y06540l1.gif" alt="(IntercontinentalExchange Logo)">
</DIV>

<DIV align="center" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 26%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 14pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
Common Stock
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B><I>Joint Book-Running Managers</I></B>
</DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Morgan Stanley</B>
</DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Goldman, Sachs&nbsp;&#38; Co.</B>
</DIV>

<DIV align="center" style="font-size: 3pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 100%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 4pt;">
<DIV style="width: 100%; border-top: 2.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>PART&nbsp;II</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>INFORMATION NOT REQUIRED IN PROSPECTUS</B>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;13.</B></TD>
    <TD>
    <B><I>Other Expenses of Offering and Distribution</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following is a statement of the estimated expenses to be
incurred in connection with the distribution of the securities
registered under this registration statement:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="84%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Amount to</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>be Paid</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SEC registration fee</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>13,536</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    NASD fees and expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>12,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Legal fees and expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>*</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fees and expenses of qualification under state securities laws
    (including legal fees)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>*</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    New York Stock Exchange listing fees and expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>*</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accounting fees and expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>*</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Printing and engraving fees</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>*</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Registrar and transfer agent&#146;s fees</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>*</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Miscellaneous</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>*</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>*</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>*&nbsp;</TD>
    <TD align="left">
    To be provided by amendment</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;14.</B></TD>
    <TD>
    <B><I>Indemnification of Directors and Officers</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Section&nbsp;145 of the Delaware General Corporation Law (the
&#147;DGCL&#148;) provides that a corporation may indemnify
directors and officers, as well as other employees and
individuals, against expenses (including attorneys&#146; fees),
judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with any
threatened, pending or completed actions, suits or proceedings
in which such person is made a party by reason of such person
being or having been a director, officer, employee or agent of
the Corporation, subject to certain limitations. The statute
provides that it is not exclusive of other rights to which those
seeking indemnification may be entitled under any by-law,
agreement, vote of shareholders or disinterested directors or
otherwise. Section&nbsp;7.6 of our bylaws provides for
indemnification by us of our directors, officers and employees
to the fullest extent permitted by the DGCL.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Section&nbsp;102(b)(7) of the DGCL permits a corporation to
provide in its charter that a director of the corporation shall
not be personally liable to the corporation or its shareholders
for monetary damages for breach of fiduciary duty as a director,
except for liability (1)&nbsp;for any breach of the
director&#146;s duty of loyalty to the corporation or its
shareholders, (2)&nbsp;for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation
of law, (3)&nbsp;for payments of unlawful dividends or unlawful
stock purchases or redemptions, or (4)&nbsp;for any transaction
from which the director derived an improper personal benefit.
Our charter provides for such limitation of liability.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We expect to maintain standard policies of insurance under which
coverage is provided (1)&nbsp;to our directors and officers
against loss rising from claims made by reason of breach of duty
or other wrongful act, and (2)&nbsp;to us with respect to
payments which may be made by us to such officers and directors
pursuant to the above indemnification provision or otherwise as
a matter of law.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The proposed form of Underwriting Agreement filed as
Exhibit&nbsp;1.1 to this Registration Statement provides for
indemnification to our directors and officers by the
underwriters against certain liabilities.
</DIV>

<P align="center" style="font-size: 10pt;">II-1

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;15.</B></TD>
    <TD>
    <B><I>Unregistered Securities Transactions</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
During the past three years, the Registrant has issued
securities that were not registered under the Securities Act as
described below. The Registrant offered and sold the securities
that it issued in such transactions in reliance on exemptions
from registration under Section&nbsp;4(2) of the Securities Act,
and/or Regulation&nbsp;D promulgated thereunder, relating to
offers of securities by an issuer not involving any public
offering, or in reliance on the exemption from registration
under Rule&nbsp;701 or Rule&nbsp;504 of the Securities Act,
relating to offers and sales of securities pursuant to benefit
plans and contracts relating to compensation. None of these
transactions involved any underwriters, underwriting discounts
or commissions, or any public offering.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Pursuant to its 2000 Stock Option Plan, the Registrant granted
stock options to its employees and members of the board of
directors to purchase an aggregate of 8,732,345&nbsp;shares of
common stock at a weighted average exercise price of $3.00 per
share in 2002, 7,138,352&nbsp;shares of common stock at a
weighted average exercise price of $2.03 per share in 2003, and
6,646,580&nbsp;shares of common stock at a weighted average
exercise price of $2.00&nbsp;per share in 2004. As of
December&nbsp;31, 2004, there are 19,496,293&nbsp;options
outstanding at a weighted average exercise price of $2.12 per
share. In 2002, 2003, and 2004, an aggregate of 22,163, 10,000,
and 9,000&nbsp;shares of Class&nbsp;A common stock,
Series&nbsp;2, respectively were issued for cash upon the
exercise of stock options previously granted under the 2000
Stock Option Plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Pursuant to its 2003 Restricted Stock Deferral Plan for Outside
Directors, the Registrant granted awards of restricted stock
units to members of the board of directors for
15,083&nbsp;shares of common stock at a weighted average
exercise price of $2.63 per share in 2003, and
12,375&nbsp;shares of common stock at a weighted average
exercise price of $2.00 per share in 2004. As of
December&nbsp;31, 2004, no shares of common stock have been
issued under the 2003 Restricted Stock Deferral Plan for Outside
Directors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Pursuant to its 2004 Restricted Stock Plan, the Registrant
granted awards of restricted stock units to its senior officers
and members of the board of directors for 5,701,700&nbsp;shares
of common stock at a weighted average grant date fair value of
$2.00 per share in 2004. As of December&nbsp;31, 2004, no shares
of common stock have been issued under the 2004 Restricted Stock
Plan.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;16.</B></TD>
    <TD>
    <B><I>Exhibits and Financial Statement Schedules</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;The following exhibits are filed as part of this
Registration Statement:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="74%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="3" align="center" nowrap><B>Exhibit</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="3" align="center" nowrap><B>Number</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Description of Document</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>1</TD>
    <TD align="left" valign="top" nowrap>.1</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &#151;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Form of Underwriting Agreement*</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>3</TD>
    <TD align="left" valign="top" nowrap>.1</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &#151;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Form of Fourth Amended and Restated Certificate of Incorporation
    of IntercontinentalExchange, Inc.*</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>3</TD>
    <TD align="left" valign="top" nowrap>.2</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &#151;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Form of Amended and Restated Bylaws of IntercontinentalExchange,
    Inc.*</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>4</TD>
    <TD align="left" valign="top" nowrap>.1</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &#151;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Form of certificate for the Common Stock of
    IntercontinentalExchange, Inc., par value $0.01&nbsp;per share*</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>5</TD>
    <TD align="left" valign="top" nowrap>.1</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &#151;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Opinion of Sullivan&nbsp;&#38; Cromwell LLP*</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.1</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &#151;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Employment Agreement, dated as of September&nbsp;27, 2004,
    between IntercontinentalExchange, Inc. and Jeffrey&nbsp;C.
    Sprecher*</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.2</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &#151;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Employment Agreement, dated as of April&nbsp;14, 2003, between
    IntercontinentalExchange, Inc. and Charles A. Vice*</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.3</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &#151;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Employment Agreement, dated as of April&nbsp;14, 2003, between
    IntercontinentalExchange, Inc. and Richard&nbsp;V. Spencer*</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.4</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &#151;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Employment Agreement, dated as of May&nbsp;9, 2003, between
    IntercontinentalExchange, Inc. and David&nbsp;S. Goone*</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.5</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &#151;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Employment Agreement, dated as of May&nbsp;9, 2003, between
    IntercontinentalExchange, Inc. and Edwin Marcial*</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.6</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &#151;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Letter, dated as of November&nbsp;19, 1999, and Statement of
    Terms and Conditions of Employment between The International
    Petroleum Exchange of London Limited and Richard Ward*</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;">II-2

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; ">

<TR style="font-size: 1pt;">
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="74%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2" align="center" nowrap><B>Exhibit</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2" align="center" nowrap><B>Number</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Description of Document</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.7</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &#151;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Employment Agreement, dated as of May&nbsp;24, 2004, between
    IntercontinentalExchange, Inc. and Johnathan&nbsp;H. Short*</TD>
</TR>

<TR>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.8</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &#151;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    IntercontinentalExchange, Inc. 2000 Stock Option Plan*</TD>
</TR>

<TR>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.9</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &#151;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    IntercontinentalExchange, Inc. 2003 Restricted Stock Deferral
    Plan for Outside Directors*</TD>
</TR>

<TR>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.10</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &#151;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    IntercontinentalExchange, Inc. 2004 Restricted Stock Plan*</TD>
</TR>

<TR>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.11</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &#151;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Amendment and Restatement Agreement, dated as of October&nbsp;9,
    2003, between The London Clearing House Limited and
    IntercontinentalExchange, Inc.*</TD>
</TR>

<TR>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.12</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &#151;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Clearing Services Agreement, dated as of October 2003, between
    The International Petroleum Exchange of London Limited and The
    London Clearing House Limited*</TD>
</TR>

<TR>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.13</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &#151;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    TRS&nbsp;&#151; Application Services Agreement, dated as of
    April&nbsp;21, 2001, between The International Petroleum
    Exchange of London Limited and LIFFE Services Company Limited*</TD>
</TR>

<TR>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.14</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &#151;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Credit Agreement, dated as of November&nbsp;17, 2004, between
    IntercontinentalExchange, Inc. and Wachovia, National
    Association*</TD>
</TR>

<TR>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.15</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &#151;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Stock Pledge Agreement, dated as of November&nbsp;17, 2004,
    between IntercontinentalExchange, Inc. and Wachovia Bank,
    National Association*</TD>
</TR>

<TR>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>21</TD>
    <TD align="left" valign="top" nowrap>.1</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &#151;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Subsidiaries of IntercontinentalExchange, Inc.*</TD>
</TR>

<TR>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>23</TD>
    <TD align="left" valign="top" nowrap>.1</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &#151;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Consent of Ernst&nbsp;&#38; Young LLP, Independent Registered
    Public Accounting Firm</TD>
</TR>

<TR>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>23</TD>
    <TD align="left" valign="top" nowrap>.3</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &#151;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Consent of Sullivan&nbsp;&#38; Cromwell LLP (included in
    Exhibit&nbsp;5.1)*</TD>
</TR>

<TR>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>24</TD>
    <TD align="left" valign="top" nowrap>.1</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &#151;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Power of Attorney (included on signature page)</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>*&nbsp;</TD>
    <TD align="left">
    To be filed by amendment.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;Financial Statement Schedule
</DIV>

<P align="center" style="font-size: 10pt;">II-3

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <B>INTERCONTINENTALEXCHANGE, INC. AND SUBSIDIARIES</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <B>SCHEDULE II&nbsp;&#151; VALUATION AND QUALIFYING ACCOUNTS</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <B>Year Ended December&nbsp;31, 2004, 2003 and 2002</B></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <B>(in thousands)</B></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="38%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Additions</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Balance at</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Charged to</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Beginning</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Costs and</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Balance at</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2" align="left" nowrap><B>Description</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>of Year</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Expenses(1)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Deductions(2)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>End of Year</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Year Ended December&nbsp;31, 2004:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Allowance for doubtful accounts</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>123</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>140</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(92</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>171</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="18">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Year Ended December&nbsp;31, 2003:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Allowance for doubtful accounts</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>446</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>435</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(758</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>123</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="18">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Year Ended December&nbsp;31, 2002:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Allowance for doubtful accounts</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>465</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>379</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(398</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>446</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 3pt;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <DIV style="width: 28%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV></TD>
</TR>

</TABLE>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="6%"></TD>
    <TD width="4%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    Additions charged to costs and expenses for the allowance for
    doubtful accounts are based on our historical collection
    experiences and management&#146;s assessment of the
    collectibility of specific accounts. This column also includes
    the foreign currency translation adjustments.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="10%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top">
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    Deductions represent the write-off of uncollectible receivables,
    net of recoveries.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;17.</B></TD>
    <TD>
    <B><I>Undertakings</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The undersigned hereby undertakes:
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (a)&nbsp;to provide to the underwriters at the closing specified
    in the underwriting agreement, certificates in such
    denominations and registered in such names as required by the
    underwriters to permit prompt delivery to each purchaser.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (b)&nbsp;insofar as indemnification for liabilities arising
    under the Securities Act of 1933 may be permitted to directors,
    officers and controlling persons of the registrant pursuant to
    the provisions referenced in Item&nbsp;14 of this registration
    statement, or otherwise, the registrant has been advised that in
    the opinion of the Securities and Exchange Commission such
    indemnification is against public policy as expressed in the Act
    and is, therefore, unenforceable. In the event that a claim for
    indemnification against such liabilities (other than the payment
    by the registrant of expenses incurred or paid by a director,
    officer, or controlling person of the registrant in the
    successful defense of any action, suit or proceeding) is
    asserted by such director, officer or controlling person in
    connection with the securities being registered hereunder, the
    registrant will, unless in the opinion of its counsel the matter
    has been settled by controlling precedent, submit to a court of
    appropriate jurisdiction the question of whether such
    indemnification by it is against public policy as expressed in
    the Act and will be governed by the final adjudication of such
    issue.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (c)&nbsp;The undersigned registrant hereby undertakes that:</TD>
</TR>

</TABLE>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (1)&nbsp;For purposes of determining any liability under the
    Securities Act of 1933, the information omitted from the form of
    prospectus filed as part of this Registration Statement in
    reliance upon Rule&nbsp;430A and contained in a form of
    prospectus filed by the Registrant pursuant to
    Rule&nbsp;424(b)(1) or (4)&nbsp;or 497(h) under the Securities
    Act shall be deemed to be part of this registration statement as
    of the time it was declared effective;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (2)&nbsp;For the purpose of determining any liability under the
    Securities Act of 1933, each post-effective amendment that
    contains a form of prospectus shall be deemed to be a new
    registration statement relating to the securities offered
    therein, and the offering of such securities at that time shall
    be deemed to be the initial bona fide offering thereof.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">II-4

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>SIGNATURES</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly
authorized, in Atlanta, Georgia on the 21st&nbsp;day of March,
2005.
</DIV>

<DIV style="margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT style="font-variant:SMALL-CAPS">INTERCONTINENTALEXCHANGE,
    INC.
    </FONT></TD>
</TR>

</TABLE>

<DIV style="margin-top: 48pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="40%"></TD>
    <TD width="2%"></TD>
    <TD width="58%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>By:&nbsp;</TD>
    <TD align="center">
    /s/ <FONT style="font-variant:SMALL-CAPS">Jeffrey C. Sprecher
    </FONT></TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 3pt;">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <DIV style="border-top: 1pt solid #000000; font-size: 1pt; margin-top: 2pt" align="left">&nbsp;</DIV></TD>
</TR>

<TR valign="top"  style="font-size: 10pt;">
    <TD>&nbsp;</TD>
    <TD align="left">
    Name:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Jeffrey C.
    Sprecher</TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="40%"></TD>
    <TD width="8%"></TD>
    <TD width="52%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>Title:</TD>
    <TD align="left">
    Chairman and Chief Executive Officer</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The undersigned directors and officers do hereby constitute and
appoint Jeffrey C. Sprecher and Richard V. Spencer and either of
them, with full power of substitution, our true and lawful
attorneys-in-fact and agents to do any and all acts and things
in our name and behalf in our capacities as directors and
officers, and to execute any and all instruments for us and in
our names in the capacities indicated below, that such person
may deem necessary or advisable to enable the Registrant to
comply with the Securities Act of 1933 (the &#147;Act&#148;) and
any rules, regulations and requirements of the Securities and
Exchange Commission in connection with this registration
statement, including specifically, but not limited to, power and
authority to sign for us, or any of us, in the capacities
indicated below, any and all amendments hereto (including
pre-effective and post-effective amendments or any other
registration statement filed pursuant to the provisions of
Rule&nbsp;462(b) under the Act); and we do hereby ratify and
confirm all that such person or persons shall do or cause to be
done by virtue hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons
in the capacities indicated on the 21st&nbsp;day of March, 2005.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="41%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="48%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="3" align="center" nowrap><B>Signature</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Title(s)</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    /s/ <FONT style="font-variant:SMALL-CAPS">Jeffrey C. Sprecher<BR>
    <DIV style="border-top: 1pt solid #000000; font-size: 1pt; margin-top: 2pt;">&nbsp;</DIV></FONT>Jeffrey
    C. Sprecher</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    Chairman of the Board and Chief Executive Officer (principal
    executive officer)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    /s/ <FONT style="font-variant:SMALL-CAPS">Charles R. Crisp<BR>
    <DIV style="border-top: 1pt solid #000000; font-size: 1pt; margin-top: 2pt;">&nbsp;</DIV></FONT>Charles
    R. Crisp</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    Director</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    /s/ <FONT style="font-variant:SMALL-CAPS">Jean-Marc Forneri<BR>
    <DIV style="border-top: 1pt solid #000000; font-size: 1pt; margin-top: 2pt;">&nbsp;</DIV></FONT>Jean-Marc
    Forneri</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    Director</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    /s/ <FONT style="font-variant:SMALL-CAPS">Sir Robert Reid<BR>
    <DIV style="border-top: 1pt solid #000000; font-size: 1pt; margin-top: 2pt;">&nbsp;</DIV></FONT>Sir
    Robert Reid</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    Director</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    /s/ <FONT style="font-variant:SMALL-CAPS">Frederic V. Salerno<BR>
    <DIV style="border-top: 1pt solid #000000; font-size: 1pt; margin-top: 2pt;">&nbsp;</DIV></FONT>Frederic
    V. Salerno</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    Director</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    /s/ <FONT style="font-variant:SMALL-CAPS">Richard L. Sandor<BR>
    <DIV style="border-top: 1pt solid #000000; font-size: 1pt; margin-top: 2pt;">&nbsp;</DIV></FONT>Richard
    L. Sandor,&nbsp;Ph.D.</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    Director</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    /s/ <FONT style="font-variant:SMALL-CAPS">Richard V. Spencer<BR>
    <DIV style="border-top: 1pt solid #000000; font-size: 1pt; margin-top: 2pt;">&nbsp;</DIV></FONT>Richard
    V. Spencer</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    Chief Financial Officer<BR>
    (principal financial and accounting officer)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    /s/ <FONT style="font-variant:SMALL-CAPS">Judith A. Sprieser<BR>
    <DIV style="border-top: 1pt solid #000000; font-size: 1pt; margin-top: 2pt;">&nbsp;</DIV></FONT>Judith
    A. Sprieser</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    Director</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    /s/ <FONT style="font-variant:SMALL-CAPS">Vincent Tese<BR>
    <DIV style="border-top: 1pt solid #000000; font-size: 1pt; margin-top: 2pt;">&nbsp;</DIV></FONT>Vincent
    Tese</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    Director</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;">II-5
</BODY>
</HTML>
[{"type": "S-1", "sequence": "1", "filename": "y06540sv1.htm", "description": "FORM S-1", "secsgml_size_bytes": 1882336}]
{"company-data": {"conformed-name": "INTERCONTINENTALEXCHANGE INC", "cik": "0001174746", "irs-number": "000000000"}, "filing-values": {"form-type": "S-1", "act": "33", "file-number": "333-123500", "film-number": "05697403"}, "business-address": {"street1": "2100 RIVEREDGE PARKWAY", "street2": "SUITE 500", "city": "ATLANTA", "state": "GA", "zip": "30328", "phone": "7708574700"}, "mail-address": {"street1": "2100 RIVEREDGE PARKWAY", "street2": "SUITE 500", "city": "ATLANTA", "state": "GA", "zip": "30328"}}
FORM S-1
As filed with the Securities and Exchange Commission on
March 22, 2005
Registration
No. 333-
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
IntercontinentalExchange, Inc.
(Exact name of registrant as specified in its charter)
Delaware
7389
58 2555 670
(State or Other Jurisdiction of
Incorporation or Organization)
(Primary Standard Industrial
Classification Code Number)
(I.R.S. Employer
Identification Number)
2100 RiverEdge Parkway
Suite 500
Atlanta, GA 30328
(770) 857-4700
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive
offices)
Johnathan H. Short, Esq.
General Counsel
IntercontinentalExchange, Inc.
2100 RiverEdge Parkway
Suite 500
Atlanta, GA 30328
(770) 857-4700
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
David B. Harms, Esq.
David J. Gilberg, Esq.
Catherine M. Clarkin, Esq.
Sullivan & Cromwell LLP
125 Broad Street
New York, NY 10004
(212) 558-4000
William F. Gorin, Esq.
Cleary Gottlieb Steen & Hamilton LLP
One Liberty Plaza
New York, NY 10006
(212) 225-2000
Approximate
date of commencement of proposed sale to the public:
As soon
as practicable after the effective date of this registration
statement.
If any of the
securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 of the
Securities Act of 1933, check the following
box.
o
If this Form is
filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the
following box and list the Securities Act registration statement
number of the earlier effective registration statement for the
same
offering.
o
If this Form is
a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier
effective registration statement for the same
offering.
o
If this Form is
a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier
effective registration statement for the same
offering.
o
If the delivery
of the prospectus is expected to be made pursuant to
Rule 434 under the Securities Act, check the following
box.
o
CALCULATION OF REGISTRATION FEE
Proposed Maximum
Amount of
Title of Each Class of
Aggregate
Registration
Securities to be Registered
Offering Price(2)
Fee
Common Stock, par value $0.01 per share(1)
$115,000,000
$13,536
(1)
Includes shares which the underwriters have the option to
    purchase to cover over-allotments, if any.
(2)
Estimated solely for the purpose of calculating the registration
    fee pursuant to Rule 457(o) under the Securities Act of
    1933.
The
registrant hereby amends this registration statement on such
date or dates as may be necessary to delay its effective date
until the registrant shall file a further amendment which
specifically states that this registration statement shall
thereafter become effective in accordance with Section 8(a)
of the Securities Act of 1933 or until the registration
statement shall become effective on such date as the Commission,
acting pursuant to said Section 8(a), may determine.
The information in this prospectus is
not complete and may be changed. These securities may not be
sold until the registration statement filed with the Securities
and Exchange Commission is effective. This prospectus is not an
offer to sell nor does it seek an offer to buy these securities
in any jurisdiction where the offer or sale is not
permitted.
SUBJECT TO COMPLETION. DATED
MARCH 22, 2005.
Shares
Common Stock
This
is an initial public offering of common stock of
IntercontinentalExchange, Inc.
We
are
offering                     of
the shares to be sold in the offering. The selling shareholders
are offering an
additional                      shares.
We will not receive any proceeds from the sale of the shares
being sold by the selling shareholders.
Prior
to this offering, there has been no public market for our common
stock. We estimate that the initial public offering price per
share will be between
$          and
$          .
We will apply to list our common stock on the New York Stock
Exchange under the symbol "ICE".  See
"Underwriting" for a discussion of the factors to be
considered in determining the initial offering price.
Investing
in our common stock involves significant risks. See "Risk
Factors" beginning on page 10 to read about factors
you should consider before buying shares of our common stock.
Neither the Securities and Exchange Commission nor any other
regulatory body has approved or disapproved of these securities
or passed upon the adequacy or accuracy of this prospectus. Any
representation to the contrary is a criminal offense.
Per Share
Total
Initial public offering price
$
$
Underwriting discount
$
$
Proceeds, before expenses, to IntercontinentalExchange,
    Inc.
$
$
Proceeds, before expenses, to the selling shareholders
$
$
To
the extent that the underwriters sell more
than                      shares
of our common stock, the underwriters have the option to
purchase up to an
additional                    shares
from some of the selling shareholders at the initial public
offering price less the underwriting discount.
The underwriters expect to deliver the shares of common stock in
New York, New York
on                     ,
2005.
Joint Book-Running Managers
Morgan Stanley
Goldman, Sachs & Co.
Prospectus
dated                     ,
2005
PROSPECTUS SUMMARY
This summary highlights information contained elsewhere in
this prospectus. Before making an investment decision, you
should read the entire prospectus carefully, including the
section entitled "Risk Factors" and our consolidated
financial statements and related notes included elsewhere in
this prospectus. Unless otherwise indicated, the terms
"IntercontinentalExchange", "we",
"us", "our", "our company" and
"our business" refer to IntercontinentalExchange, Inc.
or IntercontinentalExchange, LLC, as applicable, together with
our consolidated subsidiaries. Due to rounding, figures in
tables may not sum exactly.
BUSINESS
Overview
We operate the leading global futures and over-the-counter, or
OTC, marketplace for trading a broad array of energy products.
Our marketplace brings together buyers and sellers of
derivatives and physical energy commodities contracts through
our leading, Internet-based electronic trading platform. Our
electronic platform increases the accessibility and transparency
of the energy commodities markets and enhances the speed and
quality of trade execution. The open architecture of our
business model — meaning our ability to offer
centralized access to trading in futures and OTC contracts on a
cleared or bilateral basis through multiple
interfaces — allows our participants to optimize their
trading operations and strategies. We conduct our OTC business
directly, and our futures business through our wholly-owned
subsidiary, the International Petroleum Exchange, or the IPE.
The IPE is the largest energy futures exchange in Europe, as
measured by 2004 traded contract volumes.
During 2004, 35.5 million contracts were traded in our
futures markets and 31.0 million contracts were traded in
our OTC markets, up 6.6% from 33.3 million futures
contracts traded in 2003 and up 27.6% from 24.3 million OTC
contracts traded in 2003. Our revenues consist primarily of
transaction fees, trading access fees and market data fees. On a
consolidated basis, we generated $108.4 million in revenues
in 2004, a 15.6% increase compared to $93.7 million in
2003, and $21.9 million in net income in 2004, a 64.1%
increase compared to $13.4 million in 2003. We recorded
consolidated net cash provided from operations of
$40.2 million in 2004, a 48.2% increase compared to
$27.1 million in 2003.
Our History
In 1997, Jeffrey C. Sprecher, our founder, chairman and chief
executive officer, acquired Continental Power Exchange, Inc., or
CPEX, our predecessor company, to develop a platform to provide
a more transparent and efficient market structure for OTC energy
commodities trading. In May 2000, our company was formed, and
CPEX contributed to us all of its assets, which consisted
principally of electronic trading technology, and its
liabilities, in return for a minority equity interest in our
company. In connection with our formation, seven leading
wholesale commodities market participants, which we refer to as
our Initial Shareholders, acquired equity interests in our
company. In November 2000, six leading natural gas and power
companies, which we refer to as the Gas and Power Firms,
acquired equity interests in our company. In June 2001, we
expanded our business into futures trading by acquiring the IPE,
which, at the time, was operated predominantly as a floor-based,
open-outcry exchange.
Our Business
Our marketplace is globally accessible, promotes price discovery
and offers participants the opportunity to trade a variety of
energy products. Our key products include contracts based on
crude or refined oil, natural gas and power. Our derivative and
physical products provide participants with a means for managing
risks associated with changes in the prices of these
commodities, asset allocation, ensuring physical delivery of
select commodity products, speculation and arbitrage. The
majority of our trading volume is financially settled, meaning
that settlement is made through cash payments based on the value
of the underlying commodity, rather than through physical
delivery of the commodity itself.
1
We operate our business in two distinct markets: futures markets
and OTC markets. Futures markets offer trading in standardized
derivative contracts on a regulated exchange and OTC markets
offer trading in over-the-counter derivative contracts,
including contracts that provide for the physical delivery of an
underlying commodity and contracts that provide for financial
settlement based on the prices of underlying commodities. All
futures and cleared OTC contracts are cleared through a central
clearinghouse. We offer OTC contracts that can be traded on a
bilateral basis and certain OTC contracts that can be traded on
a cleared basis. Bilateral contracts are settled between
counterparties, while cleared contracts are novated to a third
party clearinghouse where they are marked to market and margined
daily before final settlement at expiration.
We operate our futures markets through our subsidiary, the IPE,
a Recognized Investment Exchange, or RIE, based in London, and
currently offer trading both on our electronic platform and on
our open-outcry trading floor. We operate our OTC markets
exclusively on our electronic platform. In addition to trade
execution, our electronic platform offers a comprehensive suite
of trading-related services, including electronic trade
confirmation, access to clearing services and risk management
functionality. We also offer a variety of market data services
for both the futures and OTC markets.
Recent Developments
To take advantage of the increasing acceptance and adoption of
electronic trading, and to maintain and enhance our competitive
position, we recently announced our intention to close our
open-outcry trading floor in London on April 7, 2005.
Thereafter, all of our futures trading will be conducted
exclusively on our electronic platform. For a discussion of this
announcement and the strategic and financial benefits we expect
to achieve, see "Business — Recent
Developments".
Our Competitive Strengths
We have established ourselves as the leading marketplace for
global futures and OTC energy commodities trading by leveraging
a number of key strengths, including:
Highly Liquid Global Markets and Benchmark
    Contracts
We offer liquid markets in a number of the most actively traded
global energy commodities products. We operate the leading
market for trading in Brent Crude futures. The IPE Brent Crude
futures contract is the leading benchmark for pricing crude oil
produced and consumed outside of the United States, and for
pricing a majority of the world's traded oil products. We
also operate the leading market for trading in cleared OTC Henry
Hub natural gas contracts, with 17.0 million contracts
traded in 2004. Henry Hub natural gas markets are the most
liquid natural gas markets in North America.
Leading Electronic Energy Trading Platform
Our leading electronic trading platform provides centralized and
direct access to trade execution and real-time price discovery.
We operate our OTC markets exclusively on our electronic
platform and have accelerated full transition of our futures
markets to electronic trading. Our electronic platform has
enabled us to attract significant liquidity from traditional
market participants as well as new market entrants seeking the
efficiencies and ease of execution offered by electronic
trading. We have developed a significant global presence with
approximately 4,900 active trading screens at over 890 OTC
participant firms and over 140 futures participant firms as
of February 28, 2005.
Integrated Access to Futures and OTC Markets
We attribute the growth in our business in part to our ability
to offer market participants integrated access to futures and
OTC markets. Our integrated and electronic business model allows
us to respond rapidly to our participants' needs, changing
market conditions and evolving trends in the markets for energy
commodities
2
trading. We believe that our demonstrated ability to develop and
launch new products for both the futures and OTC markets
provides us with several competitive advantages, including:
•
Multi-Product Trading:
We operate a globally accessible
    platform that offers a seamless interface between trading in
    futures products and options on those products, as well as a
    broad range of OTC products.
•
Multiple Access Options:
Our participants can access our
    marketplace through a variety of means, including through our
    Internet-based electronic trading platform, proprietary
    front-end systems, independent software vendors, or ISVs, and
    brokerage firms. ISVs allow market participants to access
    multiple exchanges through a single interface, which is
    integrated with the participants' risk management systems.
•
Cleared OTC Contracts:
We were the first market to
    introduce cleared OTC energy contracts, which we believe have
    attracted new participants to our markets by reducing bilateral
    credit risk and administrative burdens and by improving capital
    efficiency.
Highly Scalable, Proven Technology Infrastructure
Our Internet-based electronic trading platform provides rapid
trade execution and is, we believe, one of the world's most
flexible, efficient and secure systems for commodities trading.
We have designed our platform to be highly scalable, meaning
that we can expand capacity and add new products and
functionality efficiently, at relatively low cost and without
disruption to our markets. Trades on our platform are executed
on average in 250 milliseconds, or one quarter of a second,
compared to up to a minute or more for execution of an order
through a traditional voice broker. Our platform can also be
adapted and leveraged for use in other markets, as demonstrated
by the decision of the Chicago Climate Exchange, or CCX, to
operate its emissions-trading market on our platform. We believe
that our commitment to using technology to develop our platform
will continue to contribute to the growth and development of our
business.
Transparency and Independence
We offer market participants price transparency, meaning a
complete view of the depth and liquidity of our markets, through
our electronic platform. This is in contrast to the lack of
transparency of many open-outcry exchanges and voice-brokered
markets. All participant orders placed on our platform are
executed in the order in which they are received, ensuring that
all orders receive equal execution priority. In addition, the
transparency of our platform facilitates market regulation
through increased market visibility and the generation of
complete records of all transactions executed in our markets.
In contrast to many of our competitors, our company is governed
independently and impartially and in a manner intended to
promote shareholder value and the operation of fair and
efficient markets. We believe that this governance structure
provides us with greater flexibility to launch new products and
services, and evaluate and pursue growth opportunities while
ensuring impartial treatment for our participants. In addition,
we do not participate as a principal in any trading activities,
which allows us to avoid potential conflicts of interest that
could arise from engaging in trading activities while operating
our marketplace.
Strong Value Proposition
We believe that, by using our electronic platform, market
participants can achieve price improvement over alternate means
of trading. Electronic trade execution offers cost efficiencies
by providing firm posted prices and reducing trade-processing
errors and back office overhead, and allows us to accelerate the
introduction of new products on our platform. The combination of
electronic trade execution and integrated trading and market
data services facilitates automation by our participants of all
phases of trade execution and processing from front-office to
back-office, and ranging from trading and risk management to
settlement. In addition, in our futures business, we offer
substantially lower membership fees than those required to join
other exchanges. For example, as of March 2005, the price
of membership, or a seat, on the New York Mercantile Exchange,
or NYMEX, was $1.82 million, while the prevailing price of
a Chicago Board of Trade,
3
or CBOT, membership was $1.36 million. In contrast, members
of our futures exchange are only required to pay membership fees
of up to a maximum of £6,000 per annum, or
approximately $11,500.
Strong Management Team
Our management team has on average over 19 years of
experience in the energy and financial services sectors. Our
founding management team includes Jeffrey C. Sprecher, our
chairman and chief executive officer, Charles A. Vice, our chief
operating officer, and Edwin Marcial, our chief technology
officer. We enhanced our management team with additional
noteworthy professionals, including Richard V. Spencer, our
chief financial officer, and David S. Goone, our head of
business development and sales. We later integrated the
managerial talent of Dr. Richard Ward, the IPE's chief
executive officer, following our acquisition of the IPE. Our
management team has successfully developed and deployed our
electronic platform, integrated the IPE into our business,
developed and launched our electronic trade confirmation system
and introduced the industry's first cleared OTC energy
contracts. We believe that the proven strength and experience of
our management team will continue to provide us with a
competitive advantage in executing our business strategy.
Our Growth Strategy
We seek to advance our leadership position by focusing our
efforts on the following key strategies for growth:
Attract New Market Participants
In recent years, our participant base has expanded and
diversified due to the emergence of new participants in the
energy commodities markets. These new participants include
financial services companies, such as investment banks, hedge
funds, proprietary trading firms and asset managers, as well as
industrial businesses that are increasingly engaging in hedging,
trading and risk management strategies. Many of these
participants have been attracted to the energy markets in part
due to the availability of electronic trading, primarily through
our platform. We intend to continue to expand our participant
base by targeting these and other new market participants and by
offering electronic trade execution and processing capabilities
that appeal to a broad range of market participants.
Increase Connectivity to Our Marketplace
Our participants may access our electronic platform for trading
in our futures markets through our own Internet-based front-end
or through the front-end systems developed by any of seven ISVs.
These represent a substantial portion of the ISVs that serve the
commodities futures markets. Furthermore, participants in our
futures markets can access our platform directly through their
own proprietary interfaces or through a number of brokerage
firms. Participants may access our OTC markets through our
Internet-based front-end or, in the case of some of our most
liquid markets, through a leading ISV. We intend to extend our
initiatives in this area by continuing to establish multiple
points of access with our existing and prospective market
participants.
Expand Our Market Data Business
We will continue to leverage the value of the market data
derived from our trade execution, clearing and confirmation
system by developing enhancements to our existing information
services and creating new market data products. For example, in
2004, we introduced our Market Price Validation, or MPV,
service, an information service that provides a means for
subscribers to mark to market their month-end portfolios. We
also publish daily transaction-based indices for the North
American spot natural gas and power markets based on data
collected from trading activity on our platform. In addition, we
sell real-time and historical futures quotes and other futures
market data through 43 data vendors that distribute this
information, directly and through various sub-vendors, to
approximately 19,000 subscribers. We believe that the database
of information generated by our platform serves as the single
largest repository of energy market data in North America. As a
result of the breadth of our global data offerings, we believe
that we are well positioned to meet the growing demand for
increased availability of energy market data.
4
Develop New Trading Products and Services
We continually develop and launch new products designed to meet
market demand and the needs of our participants. In 2004, we
launched two new electronically traded futures contracts for
U.K. power, and we, together with the European Climate Exchange,
or ECX, plan to launch a futures contract on our platform in
2005 based on allowances issued under a government-sponsored
program designed to control and reduce greenhouse gas emissions.
During the past three years, we successfully launched over
25 new cleared OTC contracts, and we currently plan to
introduce new products at a similar rate going forward. In
particular, we believe there is an opportunity to increase
electronic trading in oil contracts, since historically only a
small percentage of all OTC oil trades have been executed
electronically. We also intend to continue to introduce
bilateral OTC contracts in less liquid, or niche, markets to
satisfy the specific needs of our participants as they arise. We
may also seek to license our platform to other exchanges for the
operation of their markets on our platform, as we have with ECX
and CCX.
Pursue Select Strategic Opportunities
We intend to pursue strategic acquisitions and alliances that
will enable us to supplement our internal growth, expand our
trading products and related services, advance our technology
and take advantage of new developments in the markets for energy
commodities trading. We focus on these key evaluation criteria
when identifying and assessing potential strategic transactions.
Risk Factors
We face risks in operating our business, including risks that
may prevent us from achieving our business strategy or that may
adversely affect our business, financial condition and operating
results. You should consider these risks before investing in our
company. Risks to our business include the substantial
competition we face from well-established competitors and
potential new entrants, our dependence on trading volume and
liquidity in our markets, our ability to effect an orderly
transition of all open-outcry trading in our futures markets to
our electronic platform, adverse resolution of pending
litigation and potential regulatory changes, among others. For a
discussion of the significant risks associated with operating
our business, our industry or investing in our common stock, you
should read the section entitled "Risk Factors"
beginning on page 10 of this prospectus.
Our Recapitalization
In this prospectus, we refer to the changes described below as
our recapitalization. Effective upon the closing of this
offering, we will amend our charter and bylaws to, among other
things:
•
create a new class of common stock, which we refer to as new
    common stock, to be issued to investors who purchase shares in
    this offering;
•
authorize our board of directors to grant holders of our
    outstanding shares of Class A common stock, Series 1,
    which we refer to as our Class A1 shares, and holders
    of our outstanding shares of Class A common stock,
    Series 2, which we refer to as our
    Class A2 shares, a right to convert these shares into
    shares of new common stock at the holder's option, subject
    to such conditions as our board of directors may deem
    appropriate;
•
adopt customary anti-takeover provisions in our charter; and
•
reduce the number of authorized and outstanding Class A1
    and Class A2 shares by way of
    a      for 1 reverse stock split.
Unless the context otherwise requires, we refer to our
Class A1 shares and our Class A2 shares,
collectively, as our Class A common stock, and we refer to
our Class A common stock and shares of our new common stock
that will be sold in this offering, collectively, as our common
stock. Any shares to be sold by the selling shareholders in this
offering will be converted from the Class A2 shares
held by such holder into shares of new common stock upon the
closing of this offering.
5
Unless otherwise specified, all information in this prospectus
assumes that we have obtained all necessary approvals from our
shareholders and that the recapitalization has been completed,
including the      for 1 reverse stock
split of the Class A common stock, and all references to
our common stock and our charter and bylaws refer to those items
as they will be in effect at the closing of this offering.
You may contact us at our principal executive offices, located
at 2100 RiverEdge Parkway, Suite 500, Atlanta, Georgia
30328, or by telephone at (770) 857-4700. You may find us
on the Internet at www.theinterchange.com. Information contained
on our website does not constitute a part of this prospectus. We
have included our website address only as an inactive textual
reference and do not intend it to be an active link to our
website.
6
The Offering
Common stock offered by us
shares
Common stock offered by the selling shareholders
shares(1)
Total common stock offered
shares(1)
Common stock to be outstanding after the offering
shares(1)(2)
Use of proceeds
We will receive net proceeds from our sale of common stock in
    the offering of approximately
    $           million
    (assuming a per share price equal to the midpoint of the
    estimated price range set forth on the cover of this
    prospectus). We intend to use the net proceeds for general
    corporate purposes, including expanding and diversifying our
    products and services, and for repayment in full of outstanding
    long-term debt, which as of December 31, 2004, amounted to
    $13.0 million. We will not receive any proceeds from the
    sale of common stock by the selling shareholders.
Voting rights
The holders of our common stock will be entitled to one vote per
    share on all matters submitted to a vote of our common
    shareholders.
Dividends
We do not anticipate paying any cash dividends in the
    foreseeable future.
Proposed New York Stock Exchange symbol
"ICE"
Risk Factors
Please read "Risk Factors" and other information
    included in this prospectus for a discussion of factors you
    should carefully consider before deciding to invest in our
    common stock.
The number of shares of our common stock to be outstanding after
this offering, as set forth above and elsewhere in this
prospectus, unless otherwise specified, is based
on                      shares
of our common stock outstanding as of December 31, 2004,
after giving effect to the recapitalization. This number of
shares of common stock to be outstanding excludes:
•
shares
    of our common stock reserved for issuance upon the exercise of
    options under our 2000 Stock Option Plan, of
    which                        shares
    were subject to outstanding options as of December 31,
    2004, at a weighted average exercise price of
    $           per
    share;
•
shares
    of our common stock reserved for issuance under our 2004
    Restricted Stock Plan, of
    which                        shares
    were subject to outstanding grants as of December 31,
    2004; and
•
shares
    of our common stock reserved for issuance under our 2003
    Restricted Stock Deferral Plan for Outside Directors, of
    which                 shares
    were subject to outstanding grants as of December 31, 2004.
(1)
Does not
    include                      shares
    of common stock that may be sold by the selling shareholders if
    the underwriters choose to exercise in full their option to
    purchase additional shares. See "Underwriting". Unless
    otherwise indicated, the information contained in this
    prospectus assumes that the underwriters' option to
    purchase additional shares is not exercised.
(2)
Includes                        shares
    of new common
    stock,                      Class A1 shares
    and                      Class A2 shares.
7
Summary Consolidated Financial Data
The following tables summarize the consolidated financial data
for our business. The following summary consolidated financial
data set forth below should be read in conjunction with our
consolidated financial statements and related notes and
"Management's Discussion and Analysis of Financial
Condition and Results of Operations" included elsewhere in
this prospectus.
We derived the summary consolidated statement of income data and
the consolidated balance sheet data set forth below for the
years ended December 31, 2004, 2003 and 2002 and as of
December 31, 2004 and 2003 from our audited consolidated
financial statements that are included elsewhere in this
prospectus in reliance upon the report of Ernst & Young
LLP, independent registered public accounting firm. Our
historical results do not necessarily indicate results expected
for any future period.
Year Ended December 31,
2004
2003
2002
(in thousands, except for share and per share data)
Consolidated Statement of Income Data
Revenues(1):
Transaction fees, net(2)
$
90,906
$
81,434
$
118,794
Data services fees
9,691
7,742
5,141
Trading access fees
3,595
2,461
490
Other
4,222
2,109
1,065
Total revenues
108,414
93,746
125,490
Operating expenses:
Cost of hosting
1,279
1,715
3,962
Compensation and benefits
30,074
26,236
27,906
Professional services
14,523
15,138
15,876
Selling, general and administrative
13,120
12,398
12,425
Depreciation and amortization
17,024
19,341
14,368
Total operating expenses
76,020
74,828
74,537
Operating income
32,394
18,918
50,953
Total other income, net
1,328
948
1,492
Income before income taxes
33,722
19,866
52,445
Income tax expense
11,773
6,489
17,739
Net income
$
21,949
$
13,377
$
34,706
Deduction for accretion of redeemable common stock(3)
—
(1,768
)
(3,656
)
Net income available to common shareholders
$
21,949
$
11,609
$
31,050
Earnings per common share:
Basic and Diluted
$
0.10
$
0.05
$
0.14
Weighted average common shares outstanding:
Basic
211,460,434
217,315,866
217,570,408
Diluted
212,248,312
218,558,834
219,400,380
(1)
We generate revenues from related parties in the ordinary course
    of our business. For a presentation and discussion of our
    revenues attributable to related parties for the years ended
    December 31, 2004, 2003 and 2002, see our consolidated
    statements of income and note 11 in our consolidated
    financial statements that are included elsewhere in this
    prospectus.
(2)
Our transaction fees are presented net of rebates. See
    "Management's Discussion and Analysis of Financial
    Condition and Results of Operations — Sources of
    Revenues — Transaction Fees".
(3)
We redeemed all of our Class B redeemable common stock on
    November 23, 2004 at a price of $5.895 per share, for
    aggregate consideration of $67.5 million. Upon its issuance
    on June 18, 2001, we recorded our Class B redeemable
    common stock at its discounted present value of
    $60.2 million. We recorded charges to retained earnings for
    the accretion of this amount up to the $67.5 million
    redemption value of our Class B redeemable common stock
    over a two-year period ending in June 2003, which was the
    earliest potential redemption date.
8
As of December 31,
2004(1)
2004
2003
(in thousands)
Consolidated Balance Sheet Data
Cash and cash equivalents
$
$
61,199
$
44,913
Restricted cash and restricted short-term investments
18,421
18,421
36,797
Short-term investments
5,700
5,700
12,000
Total current assets
100,042
105,893
Total assets
207,518
214,879
Total current liabilities
34,440
34,440
17,917
Long-term portion of revolving credit facility
—
13,000
—
Shareholders' equity
149,731
118,776
(1)
As adjusted to reflect the sale of shares of our common stock in
    this offering at an assumed initial public offering price of
    $          per
    share (the mid-point of the estimated price range set forth on
    the cover of this prospectus), after deducting the underwriting
    discount and our estimated expenses in this offering, and our
    repayment, out of the net proceeds of this offering, of
    long-term debt which, as of December 31, 2004, amounted to
    $13.0 million. We will also effect a recapitalization that
    will occur upon the closing of this offering, which will include
    the creation of a new class of common stock and the right to
    convert shares of our Class A common stock into shares of
    our new common stock. For a description of our recapitalization,
    see "Organization and Recapitalization". The
    recapitalization will have no financial impact on our
    consolidated financial statement balances. The Class B
    redeemable common stock was terminated upon its redemption in
    full in November 2004.
Year Ended December 31,
2004
2003
2002
(in thousands)
Operating Data
Our total average daily commission fee and exchange fee revenues
$
353
$
294
$
460
Our Trading Volume:
Annual futures volume(1)
35,541
33,341
30,441
Futures average daily volume(2)
140
132
121
Annual OTC volume(1)
30,978
24,270
44,005
OTC average daily volume(2)
123
97
175
(1)
Volume is calculated based on the number of contracts traded in
    our markets, or the number of round turn trades. Each
    "round turn" represents a matched buy and sell order
    of one contract.
(2)
Represents the total annual volume, in contracts, for the year
    divided by the number of trading days during that year.
9
RISK FACTORS
The purchase of our common stock involves significant
investment risks. Some of these are described below. You should
consider these risks carefully before making a decision to
invest in our common stock. In addition, there may be risks of
which we are currently unaware, or that we currently regard as
immaterial based on the information available to us, that later
prove to be material. These risks may adversely affect our
business, financial condition and operating results. As a
result, the trading price of our common stock could decline, and
you could lose some or all of your investment.
Risks Relating to Our Business
We face intense competition from regulated exchanges,
voice brokers and other electronic platforms, which could
adversely affect our business. If we are not able to compete
successfully, our business will not survive.
The market for commodities trading facilities is highly
competitive and we expect competition to intensify in the
future. Our current and prospective competitors, both
domestically and internationally, are numerous. Our principal
competitor, NYMEX, is a regulated, predominantly open-outcry
futures exchange that offers trading in futures products and
options on those products in the crude oil, gas and metals
markets, among other commodities markets. NYMEX has also
established two electronic platforms: NYMEX Access and
ClearPort. NYMEX is larger than we are and has greater financial
resources, a broader participant base and a longer operating
history. NYMEX also operates its own clearinghouse, which may
give it greater flexibility in introducing new products and
clearing services than we are able to offer through our
relationship with LCH.Clearnet, formerly known as the London
Clearing House, a leading clearinghouse based in London. In
November 2004, NYMEX opened an open-outcry trading floor in
Dublin for trading in a contract that directly competes with our
most important futures contract, the IPE Brent Crude futures
contract. In addition, on February 14, 2005, NYMEX
announced its plans to open a new London open-outcry trading
floor that would compete directly with trading in all of our
futures products, including, in particular, the IPE Brent Crude
futures contract. Given our recent decision to close our
open-outcry trading floor and conduct all futures trading
exclusively on our electronic platform, a NYMEX trading floor
may appeal to traders who prefer the open-outcry method of
trading. If participants trading in our markets move to NYMEX,
we would lose trading volume, which could negatively impact our
results of operations and profitability. In addition, NYMEX has
filed a claim against us that asserts, among other things, that
we have infringed copyrights that it claims exist in its
publicly available settlement prices that we use in connection
with the clearing of certain of our OTC derivative contracts. We
could face significant damages and changes to our business if
this litigation were determined adversely to us. See also
"— We may lose trading volume in our futures
business following the closure of our open-outcry trading
floor" and "— Our principal competitor,
NYMEX, has filed claims of copyright and trademark infringement
against us, which, if determined adversely to us, would have a
material adverse effect on our business".
In addition to NYMEX, we currently compete with:
•
voice brokers active in the commodities markets, including
    Amerex, ICAP, Prebon Yamane and Tradition (North America);
•
other electronic energy trading platforms, such as NGX (a
    subsidiary of the Toronto Stock Exchange), HoustonStreet and
    Bloomberg PowerMatch;
•
energy futures exchanges, such as European Energy Derivatives
    Exchange, or Endex (formerly known as Amsterdam Power Exchange),
    and Powernext; and
•
market data vendors, such as Bloomberg, Reuters, Argus and
    Platts (a division of The McGraw-Hill Companies Inc.).
We may also face additional competition from new entrants to our
markets. Competition in the market for commodities trading could
increase if new electronic trading platforms or futures
exchanges are established, or if existing platforms or exchanges
that currently do not trade energy commodities products
10
decide to do so. Additional competition from new entrants to our
markets could negatively impact our trading volumes and
profitability.
In addition, some of the exchanges, trading systems, dealers and
other companies with which we currently or in the future could
compete are substantially larger than we are and have
substantially greater financial, technical, marketing and other
resources and more diverse revenue streams than we do. Some of
these exchanges and other businesses have long standing, well
established and, in some cases, dominant positions in their
existing markets. They may offer a broader range of products and
services than we do. In addition, our competitors may:
•
respond more quickly to new or evolving opportunities,
    technologies and participant requirements than we can;
•
develop services and products similar to or that compete with
    ours;
•
develop services and products that are preferred by our
    participants;
•
price their products and services more competitively or respond
    more quickly to competitive pressures;
•
take advantage of efficiencies that result from owning their own
    clearinghouses, including the ability to bring new cleared
    products to market faster and offering cross-margining
    opportunities across products that reduce the cost of capital
    for participants;
•
develop and expand their network infrastructure and service
    offerings more efficiently;
•
utilize better, more user-friendly and more reliable technology;
•
consolidate and form alliances, which may create higher trading
    volumes, cost reductions and better pricing than we offer;
•
more effectively market, promote and sell their products and
    services; and
•
better leverage existing relationships with participants and
    alliance partners or exploit better recognized brand names to
    market and sell their services.
Our ability to continually maintain and enhance our
competitiveness and respond to threats from stronger current and
potential competitors will have a direct impact on our results
of operations. We cannot assure you that we will be able to
compete effectively. If our markets, products and services are
not competitive, our business, financial condition and operating
results will be materially affected. In addition, even if new
entrants do not significantly erode our market share, we may be
required to reduce significantly the rates we charge for trade
execution to remain competitive, which could have a material
adverse effect on our profitability.
Our business is primarily transaction-based, and declines
in trading volumes and market liquidity would adversely affect
our business and profitability.
We earn transaction fees for transactions executed in our
markets, from the provision of electronic trade confirmation
services and under order flow agreements shortfalls. We derived
83.9%, 86.9% and 94.7% of our consolidated revenues for 2004,
2003 and 2002, respectively, from our transaction-based
business. Of our consolidated revenues, 1.0%, 7.6% and 2.6% in
2004, 2003 and 2002, respectively, represented shortfall
payments made under order flow agreements with our Initial
Shareholders, the Gas and Power Firms and order flow agreements
in the OTC European gas markets, all of which are no longer in
effect. Even if we are able to further diversify our product and
service offerings, our revenues and profitability will continue
to depend primarily on our transaction-based business.
Accordingly, the occurrence of any event that reduces the amount
of transaction fees we receive, whether as a result of declines
in trading volumes or market liquidity, reductions in commission
rates or regulatory changes, will have a significant impact on
our operating results and profitability. See also
"— Our business depends in large part on
volatility in energy commodity prices and has benefited from
record-high oil prices in recent years".
11
Our business depends in large part on volatility in energy
    commodity prices and has benefited from record-high oil prices
    in recent years.
Participants in the markets for energy commodities trading
pursue a range of trading strategies. While some participants
trade in order to satisfy physical consumption needs, others
seek to hedge contractual price risk or take speculative or
arbitrage positions, seeking returns from price movements in
different markets. Trading volume is driven primarily by the
degree of volatility — the magnitude and frequency of
fluctuations — in prices of commodities. Higher
volatility increases the need to hedge contractual price risk
and creates opportunities for speculative or arbitrage trading.
Energy commodities markets historically have experienced
significant price volatility. We cannot predict whether this
pattern will continue, or for how long, or if this trend will
reverse itself. Were there to be a sustained period of stability
in the prices of energy commodities, we could experience lower
trading volumes, slower growth or even declines in revenues as
compared to recent periods.
In addition to price volatility, we believe that the increase in
global energy prices, particularly for crude oil, during the
past three years has had a positive impact on the trading volume
of global energy commodities, including trading volume in our
markets. As oil prices have risen to record levels, we believe
that additional participants have entered the markets for energy
commodities trading to address their growing risk-management
needs or to take advantage of greater trading opportunities.
Were global crude oil prices to return to the lower levels where
they historically have been, it is possible that many market
participants, particularly the newer entrants, could reduce
their trading activity or leave the trading markets altogether.
Global energy prices are determined by many factors, including
those listed below, that are beyond our control and are
unpredictable. Consequently, we cannot predict whether global
energy prices will remain at their current levels, nor can we
predict the impact that these prices will have on our future
revenues or profitability.
Factors that are particularly likely to affect price volatility
and price levels, and thus trading volume, include:
•
economic, political and market conditions in the United States,
    Europe, the Middle East and elsewhere in the world;
•
weather conditions;
•
the volatility in production volume of the commodities
    underlying our energy products and markets;
•
war and acts of terrorism;
•
legislative and regulatory changes;
•
credit quality of market participants;
•
the availability of capital;
•
broad trends in industry and finance;
•
the level and volatility of interest rates;
•
fluctuating exchange rates and currency values; and
•
concerns over inflation.
Any one or more of these factors may reduce price volatility or
price levels in the markets for energy commodities trading,
which in turn could reduce trading activity in those markets,
including in our markets. Moreover, any reduction in trading
activity could reduce liquidity — the ability to find
ready buyers and sellers at current prices — which in
turn could further discourage existing and potential market
participants and thus accelerate any decline in the level of
trading activity in these markets. In these circumstances, the
markets with the highest trading volumes, and therefore the most
liquidity, would likely have a growing competitive advantage
over other markets. This could put us at a greater disadvantage
relative to our principal competitors, whose markets are larger
and more established than ours.
12
We are unable to predict whether or when these unfavorable
conditions may arise in the future or, if they occur, how long
or severely they will affect our trading volumes. A significant
decline in our trading volumes, due to reduced volatility, lower
prices or any other factor, could have a material adverse effect
on our revenues, since our transaction fees would decline, and
in particular on our profitability, since our revenues would
decline faster than our expenses, many of which are fixed.
Moreover, if these unfavorable conditions were to persist over a
lengthy period of time, and our trading volumes were to decline
substantially and for a long enough period, the liquidity of our
markets — and the critical mass of transaction volume
necessary to support viable markets — could be
jeopardized.
Our revenues depend heavily upon trading volumes in the
    markets for IPE Brent Crude futures contracts and OTC North
    American natural gas and power contracts. A decline in volumes
    or in our market share in these contracts would jeopardize our
    ability to remain profitable and grow.
Our revenues depend heavily on trading volumes in the markets
for Brent Crude futures contracts and OTC North American natural
gas and power contracts. Trading in IPE Brent Crude futures
contracts accounted for 29.7%, 30.4% and 17.6% of our
consolidated revenues for 2004, 2003 and 2002, respectively.
Trading in North American natural gas contracts accounted for
26.8%, 17.9% and 33.3% of our consolidated revenues for 2004,
2003 and 2002, respectively. Trading in North American power
contracts accounted for 8.7%, 6.1% and 17.7% of our consolidated
revenues for 2004, 2003 and 2002, respectively. A decline in
trading volumes or in our market share in these markets,
including as a result of closing our open-outcry trading floor,
the relative stability of commodity prices, competition,
possible regulatory changes, and adverse publicity and
government investigations related to recent events in the North
American natural gas and power markets, could significantly
reduce our revenues and jeopardize our ability to remain
profitable and grow.
In recent years, several of the largest and most active
participants in our North American natural gas and power markets
have terminated or substantially reduced their energy
commodities trading activities in light of increased regulatory
scrutiny and enforcement actions brought against certain market
participants. As a result, we are competing aggressively for new
participants, many of which have only recently begun trading in
our markets — most notably financial institutions,
hedge funds and proprietary trading firms. Competition for these
new market entrants among exchanges and trading operations
across a variety of markets is intense.
A decline in the production of commodities traded in our
    markets could reduce our liquidity and adversely affect our
    revenues and profitability.
We derived 82.1%, 79.1% and 92.0% of our consolidated revenues
in 2004, 2003 and 2002, respectively, from exchange fees and
commission fees generated from trading in commodity products in
our futures and OTC markets. The volume of contracts traded in
the futures and OTC markets for any specific commodity tends to
be a multiple of the physical production of that commodity. If
the physical supply or production of any commodity declines, our
participants could become less willing to trade in contracts
based on that commodity. For example, the IPE Brent Crude
futures contract has been subject to this risk as production of
Brent Crude oil peaked in 1984 and began steadily falling in
subsequent years. We, in consultation with market participants,
altered the mechanism for settlement of the IPE Brent Crude
futures contract to a mechanism based on the Brent/ Forties/
Oseberg North Sea oil fields, known as the BFO Index, to ensure
that the commodity prices on which its settlement price is based
reflect a large enough pool of traders and trading activity so
as to be less susceptible to manipulation. Market participants
that trade in the IPE Brent Crude futures contract may determine
in the future, however, that additional underlying commodity
products need to be considered in the settlement of that
contract or that the settlement mechanism is not credible.
Exchange fees earned from trading in the IPE Brent Crude futures
contract accounted for 58.0%, 58.0% and 57.9% of our total
revenues from our futures business, net of intersegment fees, in
2004, 2003 and 2002, respectively, or 29.7%, 30.4% and 17.6% of
our consolidated revenues in 2004, 2003 and 2002, respectively.
Any uncertainty surrounding the settlement of the IPE Brent
Crude futures contract, or a decline in the physical supply or
production of any other commodity, could result in a decline in
trading volumes in our markets, adversely affecting our revenues
and profitability.
13
We may lose trading volume in our futures business
    following the closure of our open-outcry trading floor.
In response to the increasing acceptance and adoption of
electronic trading and to maintain and enhance our competitive
position in our futures business, we recently announced our
intention to close our open-outcry trading floor and fully
transfer all trading in futures contracts to our electronic
platform on April 7, 2005.
Over the last several years, we have progressively transitioned
our futures business toward electronic execution. We introduced
early morning electronic trading in IPE Brent Crude futures
contracts on our electronic platform in February 2003, and
offered our market participants the opportunity to
simultaneously trade electronically or through the open-outcry
trading floor beginning in October 2003. On November 1,
2004, we closed the morning open-outcry trading session in IPE
Brent Crude futures contracts, thereby making electronic trading
the exclusive means for trading the IPE Brent Crude futures
contract during the morning session. From November 1, 2004
to February 28, 2005, electronic trading has represented on
average 26.9% of overall IPE Brent Crude futures trading
volumes.
We cannot assure you that the market will accept our decision to
offer our electronic platform as the sole forum for trading the
contracts that are currently traded both electronically and
through our open-outcry trading floor, or that we will be able
to maintain our market share and liquidity in our products. As a
result of our decision to close the open-outcry trading floor,
traders who currently trade on our physical exchange floor or
prefer the open-outcry method of trading may not transfer their
trading to our electronic platform and may seek an alternate
trading venue. In November 2004, NYMEX opened an open-outcry
trading floor in Dublin for trading in Brent Crude futures
contracts. In addition, if NYMEX launches an open-outcry trading
floor in London as announced, NYMEX's trading floor may be
more attractive to these traders, who may migrate their trading
to NYMEX from our electronic platform. NYMEX may also offer
incentives that we are unable to match to traders to trade on
their Dublin or London open-outcry trading floors, as it has
done in the past. Any decline in our trading volumes as a result
of the floor closure will negatively impact our transaction fees
and, therefore, our revenues. We have derived a substantial
portion of our futures business revenues from transaction fees
generated from trades executed on our open-outcry trading floor.
In 2004, only 6.9% of our gross transaction fees and only 4.3%
of our net transaction fees in our futures business segment were
derived from exchange fees generated by trades executed on our
electronic platform. Declining trading volumes may also make our
futures markets less liquid than those of competing markets that
trade exclusively on an open-outcry trading floor or on both an
open-outcry trading floor and an electronic platform. Over time,
this decision may prove to be ineffective and costly to us and
could ultimately adversely affect our profitability and
competitive position. We also expect to incur charges, primarily
in the second quarter of 2005, ranging from $6.0 million to
$8.0 million in connection with the closure of the
open-outcry trading floor. See also "— We face
intense competition from regulated exchanges, voice brokers and
other electronic platforms, which could adversely affect our
business. If we are not able to compete successfully, our
business will not survive".
Our principal competitor, NYMEX, has filed claims of
    copyright and trademark infringement against us, which, if
    determined adversely to us, would have a material adverse effect
    on our business.
NYMEX, a regulated commodity futures exchange and our principal
competitor, sued us in federal district court in November 2002
asserting that we are violating its intellectual property
rights. NYMEX's principal claim alleges copyright
infringement by us on the basis of our use of NYMEX's
publicly available settlement prices in two of our cleared OTC
contracts. NYMEX also has alleged that we are infringing and
diluting its trademark rights by referring to NYMEX trademarks
in certain of our swap contract specifications and that we have
tortiously interfered with a contract between NYMEX and the data
provider that provides us with the NYMEX settlement prices
pursuant to a license. These settlement prices constitute the
end-of-day market values used by NYMEX to clear on a daily basis
and to settle at expiration certain commodity futures contracts,
and options on those contracts, traded on NYMEX. We offer
trading on our electronic platform in two cleared OTC swaps
contracts — West Texas Intermediate, or WTI, crude oil
and Henry Hub natural gas — that are settled at
expiration and cleared at the end of each trading day based on
prices determined by us through reference to NYMEX settlement
prices. We derived 17.2%, 5.6% and 0.8% of our consolidated
revenues in 2004, 2003 and 2002, respectively, from
WTI crude oil and Henry Hub natural gas contracts cleared
and settled on the basis of, or by reference to, NYMEX
settlement prices. NYMEX has alleged in its
14
complaint that the settlement prices published by NYMEX are
subject to copyright protection, and that we are infringing on
its rights by using or referring to these settlement prices in
our cleared business. NYMEX has demanded that we stop these
practices and seeks to permanently enjoin us from using or
referring to these settlement prices. This case is presently
pending before the court on cross-motions for summary judgment
filed by us and NYMEX, and no trial date has been set.
We are vigorously defending this lawsuit. While we do not
believe that we infringe any intellectual property rights of
NYMEX or that we have tortiously interfered with any contract of
NYMEX, we cannot assure you that we will prevail in this action.
If we are found to have infringed NYMEX's intellectual
property rights, in whole or in part, through our use of
NYMEX's settlement prices or references to NYMEX in our
contract specifications, we may incur substantial monetary
damages and we may be enjoined permanently from using or
referring to one or more types of NYMEX settlement prices.
If we are enjoined from using or referring to NYMEX settlement
prices, we could lose all or a substantial portion of our
cleared trading volume in WTI crude oil and Henry Hub natural
gas contracts and the related commission fee revenues. We
describe this matter in greater detail under the heading
"Regulation and Legal Proceedings".
Many of our current shareholders are also our participants
and their interests may differ from those of other
shareholders.
Many of our Initial Shareholders and the Gas and Power Firms are
both our principal shareholders and participants in our markets.
These investors, collectively, will own
approximately           %
of our outstanding common stock upon the closing of this
offering. Revenues from these investors accounted for 23.3%,
45.8% and 60.8% of our revenues generated by our OTC business,
net of intersegment fees, in 2004, 2003 and 2002, respectively.
Revenues from all our shareholders that own in excess of 1% of
our outstanding common stock accounted for 27.1%, 36.3% and
50.6% of our consolidated revenues in 2004, 2003 and 2002,
respectively. As participants, these shareholders may have
strategic interests that are different from, or that could
conflict with, your interests. For example, in their capacity as
participants, these investors may favor lower fees for trade
execution or other concessions that would presumably reduce our
revenues, and therefore, the value of your ownership position in
us. In addition, two of the Initial Shareholders are affiliated
with Morgan Stanley & Co. Incorporated and Goldman,
Sachs & Co., the lead underwriters for this offering.
We rely on LCH.Clearnet to provide clearing services for
    the trading of futures and cleared OTC contracts in our markets.
    We cannot continue to operate our futures business without
    clearing services.
We have contracted with LCH.Clearnet, to provide clearing
services to us for all futures contracts traded in our markets
pursuant to a contract for an indefinite term that is terminable
by either party upon one year's notice, if not otherwise
terminated in accordance with its terms. LCH.Clearnet also
provides clearing services to participants in our OTC business
that trade designated contracts eligible for clearing. These
services are provided pursuant to a separate contract we have
entered into with LCH.Clearnet, which continues in force unless
either party gives one year's written notice. Our cleared
OTC contracts have become a significant component of our
business, and accounted for 44.5%, 13.4% and 1.4% of the
revenues, net of the intersegment fees, generated by our OTC
business in 2004, 2003 and 2002, respectively.
The interruption or cessation of these clearing services and our
inability to make alternate arrangements in a timely manner
could have a material adverse effect on our business, financial
condition and results of operations. In particular, if our
agreement with LCH.Clearnet with respect to our futures business
were terminated, and we could not obtain clearing services from
another source, we may be unable to operate a futures market and
would likely be required to cease operations in that segment of
our business. In 2004, 2003 and 2002, transaction fees generated
in our futures business, which are also referred to as exchange
fees, accounted for 42.0%, 42.6% and 25.1%, respectively, of our
consolidated revenues.
If our agreement with LCH.Clearnet relating to OTC trading were
terminated, we may be unable to offer clearing services in
connection with our OTC business for a considerable period of
time. While we would still be able to offer OTC trading in
bilateral contracts, our inability to offer trading in cleared
contracts, assuming
15
that no other clearing alternatives were available, could
significantly impair our ability to compete, particularly in
light of the launch of a competing swaps-to-futures clearing
facility by one of our competitors. In 2004, 2003 and 2002,
transaction fees derived from trading in cleared OTC contracts
accounted for 21.7%, 6.4% and 0.9%, respectively, of our
consolidated revenues. Our principal competitors own their own
clearing facilities and thus do not face the risk of losing the
ability to provide clearing services to participants that we do.
Moreover, because they own their own facilities, they may be
able to provide clearing services more cost-effectively and can
extend them to new products faster than we can. The number of
clearing facilities that are not owned by our competitors is
limited, and developing our own clearing facility would be
costly and time consuming. Requiring our participants to change
clearing facilities would also be disruptive and costly.
LCH.Clearnet could elect for strategic reasons to discontinue
providing clearing services to us for our futures and OTC
businesses at any time with appropriate notice. For example,
LCH.Clearnet could decide to enter into a strategic alliance
with a competing exchange or other trading facility. In
addition, according to the terms of our contract with
LCH.Clearnet with respect to our OTC business, our relationship
may be terminated upon a change in control of either party. The
commodity markets have experienced increased consolidation in
recent years and may continue to do so, and strategic alliances
and changes in control involving various market participants are
possible. LCH.Clearnet is owned by its members, which include
banks and other financial institutions whose commercial
interests are broader than the clearing services business. We
cannot assure you that our futures or OTC businesses would be
able to obtain clearing services from an alternate provider on
acceptable terms or in sufficient time to avoid or mitigate the
material adverse effects described above.
We are currently subject to oversight in the United States
and regulation in the United Kingdom. Failure to comply with
existing regulatory requirements, and possible future changes in
these requirements, could adversely affect our business.
We operate our electronic platform as an "exempt commercial
market", or ECM, under the Commodity Exchange Act. As such,
we are subject to access, reporting and record-keeping
requirements of the CFTC. However, unlike a futures exchange,
our OTC business is not generally regulated by the CFTC. In
contrast, the IPE, through which we conduct our futures
business, operates as a Recognized Investment Exchange, or RIE,
in the United Kingdom. As an RIE, the IPE has regulatory
responsibility in its own right and is subject to regulation by
the Financial Services Authority, or FSA, pursuant to the
Financial Services and Markets Act 2000, or FSMA. The IPE is
required under the FSMA to maintain sufficient financial
resources, adequate systems and controls and effective
arrangements for monitoring and disciplining its members. The
IPE's ability to comply with all applicable laws and rules
is largely dependent on its maintenance of compliance, audit and
reporting systems. We cannot assure you that these systems and
procedures are fully effective. Failure to comply with our
regulatory requirements could subject us to significant
penalties, including termination of our ability to conduct our
regulated businesses.
Future legislative and regulatory initiatives, either in the
United States, the United Kingdom or elsewhere, could affect one
or more of the following aspects of our business:
•
the manner in which we communicate and contract with our
    participants;
•
the pricing of our products;
•
a requirement that we maintain minimum regulatory capital on
    hand;
•
a requirement that we exercise regulatory oversight with respect
    to our OTC participants, and assume responsibility for their
    conduct;
•
a requirement that we implement systems and procedures to
    maintain and enforce compliance by our OTC participants;
•
our financial and regulatory reporting practices;
•
our record-keeping and record-retention procedures;
16
•
the licensing of our employees; and
•
the conduct of our directors, officers, employees and affiliates.
The implementation of new regulations or unfavorable
interpretations of existing regulations by courts or regulatory
bodies could require us to incur significant compliance costs
and impede our ability to operate, expand and enhance our
electronic platform as necessary to remain competitive and
expand our business. Regulatory changes inside or outside the
United States or the United Kingdom could materially and
adversely affect our business, financial condition and results
of operations.
The OTC commodities trading industry in North America has
been subject to increased regulatory scrutiny in the recent
past, and we face the risk of changes to our regulatory
environment in the future, which may diminish trading volumes on
our electronic platform.
Our OTC business is currently subject to only limited regulatory
oversight. As an ECM, we are not subject to registration as an
exchange nor to the type of ongoing comprehensive oversight to
which exchanges are subject. Instead, we are required to comply
with access, reporting and record-keeping requirements of the
CFTC. In recent years, however, the market for OTC energy
commodities trading has been the subject of increased scrutiny
by regulatory and enforcement authorities due to a number of
highly publicized problems involving energy commodities trading
companies. This increased scrutiny has included investigations
by the Department of Justice, the Federal Energy Regulatory
Commission, or the FERC, and the Federal Trade Commission of
alleged manipulative trading practices, misstatements of
financial results, and other matters. As a result of the
foregoing, in 2002 several significant participants in the
energy trading markets shut down their operations and exited the
trading markets. Primarily as a result of this, our trading
volumes declined from 44.0 million contracts in 2002 to
24.3 million contracts in 2003, and while volumes have
since rebounded to 31.0 million in 2004, they have not
returned to our 2002 levels.
In connection with the above referenced investigations,
governmental bodies became concerned that various market
participants may have used our electronic platform, among other
venues such as voice brokers, to conduct potentially
manipulative trading activity, and, during this time, we were
required to provide extensive information to the authorities in
connection with their investigations. This process was costly
and the resulting publicity may have discouraged other
participants or potential participants from using our platform.
Furthermore, in the wake of suggestions that manipulative
trading practices by certain market participants may have
contributed to unseasonably high prices in the wholesale power
market in California and other western states in the summer of
2000, and in response to a number of other factors, including
the collapse of Enron Corporation, legislative and regulatory
authorities at both the federal and state levels, as well as
political and consumer groups, called for increased regulation
and monitoring of the OTC commodities markets in general and the
North American power and natural gas markets (currently our most
important OTC markets), in particular. For example, regulators
in some states publicly questioned whether some form of
regulation, including price controls, should be reimposed in OTC
commodities markets, particularly in states where power markets
were deregulated in recent years. In addition, members of
Congress have, at various times in the last several years,
introduced bills seeking to restrict OTC trading of energy
derivatives contracts generally and to bring electronic trading
of energy within the direct scope of CFTC regulation.
Furthermore, in 2002, the FERC introduced rules requiring that
public utilities and power marketers file quarterly reports
about their power trading activities.
We cannot assure you that future unanticipated events in the
markets for energy commodities trading will not lead to a
recurrence of such regulatory scrutiny or to changes in the
level of regulation to which our OTC business is subject.
Increased regulation of our participants or our markets could
materially adversely affect our business. The imposition of
stabilizing measures such as price controls in the power or
other commodities markets could substantially reduce or
potentially even eliminate trading activity in affected markets.
New laws and rules applicable to our business could
significantly increase our regulatory compliance costs, delay or
prevent us from introducing our products and services as planned
and discourage some market participants from using our
electronic platform. New allegations of manipulative trading by
market participants could subject us to regulatory scrutiny and
possibly fines or restrictions on our business, as well as
adverse publicity.
17
All of this could lead to lower trading volumes and transaction
fees, higher operating costs and lower profitability or losses.
If we are unable to keep up with rapid changes in
technology and participant preferences, we may not be able to
compete effectively.
To remain competitive, we must continue to enhance and improve
the responsiveness, functionality, accessibility and reliability
of our electronic platform and our proprietary technology. The
financial services industry is characterized by rapid
technological change, change in use patterns, change in client
preferences, frequent product and service introductions and the
emergence of new industry standards and practices. These changes
could render our existing proprietary technology uncompetitive
or obsolete. The continued growth of our business and our
ability to pursue our strategic objectives will depend, in part,
on our ability to:
•
enhance our existing services and maintain and improve the
    functionality and reliability of our electronic platform;
•
develop or license new technologies that address the
    increasingly sophisticated and varied needs of our participants;
•
anticipate and respond to technological advances and emerging
    industry practices on a cost-effective and timely basis; and
•
continue to attract and retain highly skilled technology staff
    to maintain and develop our existing technology and to adapt to
    and manage emerging technologies.
We cannot assure you that we will successfully implement new
technologies or adapt our proprietary technology to our
participants' requirements or emerging industry standards
in a timely and cost-effective manner. Any failure on our part
to remain abreast of industry standards in technology and to be
responsive to participant preferences could cause our market
share to decline and negatively impact our profitability.
Our operating results are subject to significant
fluctuations due to a number of factors. As a result, you will
not be able to rely on our operating results in any particular
period as an indication of our future performance.
A number of factors beyond our control may contribute to
substantial fluctuations in our operating results —
particularly in our quarterly results. As a result of the
factors described in the preceding risk factors, you will not be
able to rely on our operating results in any particular period
as an indication of our future performance. The energy
commodities trading industry has historically been subject to
variability in trading volumes due primarily to five key
factors. These factors include geopolitical events, weather,
real and perceived supply and demand imbalances in the
underlying energy commodities, the number of trading days in a
quarter and seasonality. As a result of one or more of these
factors, trading volumes in our markets could decline, possibly
significantly, which would adversely affect our revenues derived
from transaction fees. If we fail to meet securities
analysts' expectations regarding our operating performance,
the price of our common stock could decline substantially. See
also "— Risks Relating to this
Offering — The market price of our common stock may
fluctuate significantly, and it may trade at prices below the
initial public offering price".
Our cost structure is largely fixed. If our revenues
decline and we are unable to reduce our costs, our profitability
will be adversely affected.
Our cost structure is largely fixed. We base our expectations of
our cost structure on historical and expected levels of demand
for our products and services as well as our fixed operating
infrastructure, such as computer hardware and software, hosting
facilities and security and staffing levels. If demand for our
products and services decline and, as a result, our revenues
decline, we may not be able to adjust our cost structure on a
timely basis. In that event, our profitability will be adversely
affected.
18
We have been accused of patent infringement by EBS Dealing
    Resources.
In January 2004, EBS Dealing Resources, Inc., or EBS, sued us in
the U.S. District Court for the Southern District of New
York. EBS' complaint alleges that we infringed two of its
patents relating to the way in which bids and offers are
displayed on an electronic trading system in a manner that
permits parties to act only on those bids and offers from
counterparties with whom the party has available credit. EBS
claims that the credit filter functionality of our trading
platform infringes EBS' patented systems and methods for
displaying a so-called "dealable price".
While we believe that our platform does not infringe EBS'
patents and are vigorously defending this action, we cannot
assure you that we will prevail and that this litigation will be
resolved in our favor. A claim construction hearing, in which
the scope of EBS' patents will be construed by the court,
is scheduled for May 2005, and trial is scheduled for
February 2006. The outcome of the claim construction
hearing, including a broad construction of EBS' patents
(which would generally favor EBS) or a narrow construction
(which would generally favor us), could have a significant
impact on this action. A broad construction of EBS' patents
may reduce the number of arguments we have regarding
non-infringement. If this litigation is resolved in a manner
adverse to us, we may be required to pay substantial damages to
EBS and cease using the credit filter on our electronic
platform. If we are enjoined from using our credit filter
technology, we might attempt to negotiate a royalty bearing
license with EBS for the continued use of our credit filter
technology if such a license were available on reasonable terms.
The payment of damages, discontinuation of our use of this
technology or payment of royalties to EBS could have a material
adverse effect on our business, financial condition and results
of operations. In addition, EBS has additional patent
applications pending in the United States Patent and
Trademark Office that may form the basis for future suits.
Fluctuations in currency exchange rates may adversely
affect our operating results.
We currently generate a significant portion of our revenues and
net income and corresponding accounts receivable and cash
through sales denominated in pounds sterling, which is the
functional currency of our foreign subsidiaries. Of our
consolidated revenues, 46.1%, 47.1% and 33.7% were denominated
in pounds sterling in 2004, 2003 and 2002, respectively, and we
expect our exposure to foreign currency exchange risk to
increase to the extent we are able to expand our futures
business. We have foreign currency translation risk equal to our
net investment in these subsidiaries. As of December 31,
2004, $46.0 million of our cash and cash equivalents,
$4.5 million of our accounts receivable, $85.6 million
of our goodwill and other intangible assets and
$134.0 million of our net assets were denominated in pounds
sterling.
We also have foreign currency transaction risk related to the
settlement of foreign receivables or payables incurred with
respect to trades executed on our electronic platform, including
for our OTC European gas and power markets, which are paid in
pounds sterling, and for cash accounts of our
U.K. subsidiaries held in U.S. dollars. For example,
we had foreign currency transaction losses of $1.4 million,
$644,000 and $149,000 in 2004, 2003 and 2002, respectively.
While we currently enter into hedging transactions to help
mitigate our foreign exchange risk exposure, primarily with
respect to our net investment in our U.K. subsidiaries,
these hedging arrangements may not always be effective,
particularly in the event of imprecise forecasts of the levels
of our non-U.S. denominated assets and liabilities.
Accordingly, if there is an adverse movement in exchange rates,
we may suffer significant losses, which would adversely affect
our operating results and financial condition.
Any infringement by us on the intellectual property rights
of others could result in litigation and adversely affect our
ability to continue to provide, or increase the cost of
providing, our products and services.
Patents and other intellectual property rights of third parties
may have an important bearing on our ability to offer certain of
our products and services. Our competitors as well as other
companies and individuals may have obtained, and may be expected
to obtain in the future, patent rights related to the types of
products and services we offer or plan to offer. We cannot
assure you that we are or will be aware of all patents that may
pose a risk of infringement by our products and services. In
addition, some patent applications in the United States are
confidential until a patent is issued, and therefore we cannot
evaluate the extent to which our
19
products and services may be covered or asserted to be covered
in pending patent applications. Thus, we cannot be sure that our
products and services do not infringe on the rights of others or
that others will not make claims of infringement against us. In
general, if one or more of our products or services is found to
infringe patents held by others, we may be required to stop
developing or marketing the products or services, to obtain
licenses to develop and market the services from the holders of
the patents or to redesign the products or services in such a
way as to avoid infringing the patents. We also could be
required to pay damages if we were found to infringe patents
held by others, which could materially adversely affect our
business, financial condition and operating results. We cannot
assess the extent to which we may be required in the future to
obtain licenses with respect to patents held by others, whether
such licenses would be available or, if available, whether we
would be able to obtain such licenses on commercially reasonable
terms. If we were unable to obtain such licenses, we may not be
able to redesign our products or services at a reasonable cost
to avoid infringement, which could materially adversely affect
our business, financial condition and operating results. See
also "— Our principal competitor, NYMEX, has
filed claims of copyright and trademark infringement against us,
which, if determined adversely to us, would have a material
adverse effect on our business" and "— We
have been accused of patent infringement by EBS Dealing
Resources".
Some of the proprietary technology we employ may be
    vulnerable to infringement by others.
Our business is dependent on proprietary technology and other
intellectual property that we own or license from third parties.
Despite precautions we have taken or may take to protect our
intellectual property rights, third parties could copy or
otherwise obtain and use our proprietary technology without
authorization. It may be difficult for us to monitor
unauthorized use of our intellectual property. We cannot assure
you that the steps that we have taken will prevent
misappropriation of our proprietary technology or intellectual
property.
We have filed U.S. patent applications for our electronic
trade confirmation service, our method to allow a participant to
engage in program trading while protecting its data, referred to
as ICEMaker, and our method for displaying both cleared and
bilateral OTC contracts in single price stream. We have also
filed patent applications in the European Patent Office and
Canada for our electronic trade confirmation service and our
method for displaying cleared and bilateral OTC contracts in a
single price stream, as well as having made a filing under the
Patent Cooperation Treaty with respect to ICEMaker. We cannot
assure you that we will obtain any final patents covering these
services, nor can we predict the scope of any patents issued. In
addition, we cannot assure you that any patent issued will be
effective to protect this intellectual property against
misappropriation. Third parties in Europe or elsewhere could
acquire patents covering this or other intellectual property for
which we obtain patents in the United States, or equivalent
intellectual property, as a result of differences in local laws
affecting patentability and patent validity. Third parties in
other jurisdictions might also misappropriate our intellectual
property rights with impunity, if intellectual property
protection laws are not actively enforced in those
jurisdictions. Patent infringement and/or the grant of parallel
patents would erode the value of our intellectual property.
We have secured trademark registrations for
"IntercontinentalExchange", "ICE" and our
globe design from the United States Patent and Trademark Office,
as well as registrations for other trademarks we use in our
business. We also have several U.S. and foreign applications
pending for other trademarks we use in our business. We cannot
assure you that any of these marks for which applications are
pending will be registered.
We may have to resort to litigation to enforce our intellectual
property rights, protect our trade secrets, determine the
validity and scope of the intellectual property rights of others
or defend ourselves from claims of infringement. We may not
receive an adequate remedy for any infringement of our
intellectual property rights, and we may incur substantial costs
and diversion of resources and the attention of management as a
result of litigation, even if we prevail. As a result, we may
choose not to enforce our infringed intellectual property
rights, depending on our strategic evaluation and judgment
regarding the best use of our resources, the relative strength
of our intellectual property portfolio and the recourse
available to us.
20
Our limited operating history may make it difficult to
    evaluate our future prospects, may increase the risk that we
    will not continue to be successful and may increase the risk of
    your investment.
We began operations in 2000. As a result, we have a limited
operating history for you to evaluate in assessing our future
prospects. In addition, while the IPE was established in 1980,
we did not begin to operate the IPE until we acquired the IPE in
June 2001 and integrated it into our business. We also have not
previously offered trading in futures contracts or options on
futures contracts exclusively on our electronic platform.
Accordingly, our historic and recent financial results may not
be representative of what they may be in the future. We cannot
assure you that our growth will continue at the same rate or at
all, or that we will not experience declines in revenues and
profitability in the future. You must consider our business and
prospects in light of the risks and difficulties we will
encounter as an early-stage company with a limited operating
history.
We face significant challenges in implementing our
strategic goals of expanding product and service offerings and
attracting new market participants to our markets. If we do not
meet these challenges, we may not be able to increase our
revenues or remain profitable.
We seek to expand the range of commodity products that can be
traded in our markets and to ensure that trading in those new
products becomes liquid within a sufficiently short period of
time to support viable trading markets. In meeting these
strategic goals, however, we face a number of significant
challenges, including the following:
•
To introduce new cleared contracts, we must first obtain the
    approval of LCH.Clearnet, our provider of clearing services. The
    timing of LCH.Clearnet's approval may prevent us from
    bringing new cleared contracts to market as quickly as some of
    our competitors. The approval of LCH.Clearnet and the timing of
    its receipt will depend upon the type of product proposed, the
    type and extent of system modification required to establish
    clearing functionality for the relevant product and the
    integration of the new contract with our electronic platform and
    other challenges posed. This could result in a substantial delay
    between development of a cleared contract and its offering on
    our electronic platform.
•
When we introduced new OTC products initially, we obtained order
    flow commitments from leading market participants, which were
    instrumental in the development of liquid markets for those
    products. However, we do not intend to obtain comparable
    commitments with regard to new products that we introduce, which
    could make successful development of new trading markets
    particularly uncertain.
•
To expand the use of our electronic platform and to introduce
    new trading-related services, we must develop additional systems
    technology that will interface successfully with the wide
    variety of unique internal systems used by our participants.
    These challenges may involve unforeseen costs and delays.
•
As an early-stage company, we must continue to build significant
    brand recognition among commodities market participants in order
    to attract new participants to our markets. This will require us
    to increase our marketing expenditures. The cost of our
    marketing efforts may be greater than we expect, and we cannot
    assure you that these efforts will be successful.
Even if we resolve these issues and are able to introduce new
products and services, there is no assurance that they will be
accepted by our participants, attract new market participants,
or be competitive with those offered by other companies. If we
do not succeed in these efforts on a consistent, sustained
basis, we will be unable to implement our strategic objectives.
This would seriously jeopardize our ability to increase and
diversify our revenues, remain profitable and continue as a
viable competitor in our markets.
Reductions in our commission rates resulting from
    competitive pressures could lower our revenues and
    profitability.
We expect to experience pressure on our commission rates as a
result of competition we face in our futures and OTC markets.
Some of our competitors offer a broader range of products and
services to a larger participant base, and enjoy higher trading
volumes, than we do. Consequently, our competitors may be able
and willing to offer commodity trading services at lower
commission rates than we currently offer or may be
21
able to offer. As a result of this pricing competition, we could
lose both market share and revenues. We believe that any
downward pressure on commission rates would likely continue and
intensify as we continue to develop our business and gain
recognition in our markets. A decline in commission rates could
lower our revenues, which would adversely affect our
profitability.
For example, we have offered our trade execution services to
market participants without charge for trading WTI crude oil
bullets in our OTC market in an effort to increase the liquidity
of this market. This fee waiver began in November 2004 and
extends through the end of 2005. We recognized $113,000,
$240,000 and $858,000 in commission fee revenues for WTI crude
oil bullet contracts in 2004, 2003 and 2002, respectively.
Similar efforts by us or our competitors in the future could
have an adverse effect on our profitability.
Our business may be harmed by computer and communications
    systems failures and delays.
We support and maintain many of the systems that comprise our
electronic platform. Our failure to monitor or maintain these
systems, or to find replacements for defective components within
a system in a timely and cost-effective manner when necessary,
could have a material adverse effect on our ability to conduct
our business. Our systems are located primarily in Atlanta,
Georgia and our backup facilities fully replicate our primary
data center. Our redundant systems or disaster recovery plans
may prove to be inadequate.
Our systems, or those of our third party providers, may fail or,
due to capacity constraints, may operate slowly, causing one or
more of the following:
•
unanticipated disruption in service to our participants;
•
slower response time and delays in our participants' trade
    execution and processing;
•
failed settlement by participants to whom we provide trade
    confirmation or clearing services;
•
incomplete or inaccurate accounting, recording or processing of
    trades;
•
our distribution of inaccurate or untimely market data to
    participants who rely on this data in their trading
    activity; and
•
financial loss.
We could experience system failures due to power or
telecommunications failures, human error on our part or on the
part of our vendors or participants, natural disasters, fire,
sabotage, hardware or software malfunctions or defects, computer
viruses, intentional acts of vandalism or terrorism and similar
events. In these instances, our disaster recovery plan may prove
ineffective. If any one or more of these situations were to
arise, they could result in participant dissatisfaction with our
electronic platform, prompting participants to trade elsewhere,
or exposure to litigation or regulatory sanctions. As a
consequence, our business, financial condition and results of
operations could suffer materially.
Our systems and those of our third party service providers
    may be vulnerable to security risks, which could result in
    wrongful use of our information, or which could make our
    participants reluctant to use our electronic platform.
We regard the secure transmission of confidential information on
our electronic platform as a critical element of our operations.
Our networks and those of our participants and our third party
service providers, including LCH.Clearnet, may, however, be
vulnerable to unauthorized access, computer viruses, firewall or
encryption failures and other security problems. We may be
required to expend significant resources to protect ourselves
and our participants against the threat of security breaches or
to alleviate problems caused by security breaches. Although we
intend to continue to implement industry standard security
measures, we cannot assure you that those measures will be
sufficient to protect our business against losses or any reduced
trading volume incurred in our markets as a result of any
significant security breaches on our platform.
22
We rely on specialized management and employees.
Our future success depends, in part, upon the continued
contributions of our executive officers and key employees who we
rely on for executing our business strategy and identifying new
strategic initiatives. These individuals possess extensive
experience in the energy commodities trading industry and
financial services markets generally, and possess extensive
technology skills. We have entered into employment agreements
with our executive officers, including our chief executive
officer, our chief operating officer, our chief financial
officer, our chief technology officer, our vice presidents, our
futures business chief executive officer, as well as certain
other employees responsible for product development and
technological development within our company. It is possible,
however, that one or more of these persons could voluntarily
terminate their employment agreements with us. Any loss or
interruption of the services of our executive officers or key
product development or technology personnel could result in our
inability to manage our operations effectively or to execute our
business strategy. We cannot assure you that we would be able to
find appropriate replacements for these key personnel if the
need arose. We may have to incur significant costs to replace
key employees who leave, and our ability to execute our business
strategy could be impaired if we cannot replace departing
employees in a timely manner. Competition in our industry for
persons with trading industry and technology expertise is
intense.
We rely on third party providers and other suppliers for a
    number of services that are important to our business. An
    interruption or cessation of an important service or supply by
    any third party could have a material adverse effect on our
    business.
In addition to our dependence on LCH.Clearnet as a clearing
service provider, we depend on a number of suppliers, such as
online service providers, hosting service and software
providers, data processors, software and hardware vendors,
banks, and telephone companies, for elements of our trading,
clearing and other systems. For example, we rely on LIFFE
Services Company Limited for the provision of a trade
registration system that routes trades executed in our markets
to LCH.Clearnet for clearing. Both LIFFE Services Company
Limited and its parent company, Euronext N.V., are potential
competitors to both our futures business and our OTC business,
which may affect LIFFE's willingness to continue to provide
these services in the future. In addition, we rely on a large
international telecommunications company for the provision of
hosting services. If this company were to discontinue providing
these services to us, we would likely experience significant
disruption to our business until we were able to establish
connectivity with another provider.
We cannot assure you that any of these providers will be able to
continue to provide these services in an efficient,
cost-effective manner or that they will be able to adequately
expand their services to meet our needs. An interruption in or
the cessation of an important service or supply by any third
party and our inability to make alternative arrangements in a
timely manner, or at all, would result in lost revenues and
higher costs.
In addition, our participants may access our electronic platform
through seven ISVs, which represent a substantial portion of the
ISVs that serve the commodities markets. The loss of a
significant number of ISVs providing access could make our
platform less attractive to participants who prefer this form of
access.
As a financial service provider, we are subject to
    significant litigation and liability risks.
Many aspects of our business, and the businesses of our
participants, involve substantial risks of liability. These
risks include, among others, potential liability from disputes
over terms of a trade, the claim that a system failure or delay
caused monetary loss to a participant or that an unauthorized
trade occurred. For example, dissatisfied participants that have
traded on our electronic platform, or those on whose behalf our
participants have traded, may make claims regarding the quality
of trade execution, or alleged improperly confirmed or settled
trades, abusive trading practices, security and confidentiality
breaches, mismanagement or even fraud against us or our
participants. In addition, because of the ease and speed with
which sizable trades can be executed on our electronic platform,
participants can lose substantial amounts by inadvertently
entering trade orders or by entering them inaccurately. A large
number of significant error trades could result in participant
dissatisfaction.
23
As a result, we could incur significant legal expenses defending
claims against us, even those without merit. The adverse
resolution of any lawsuits or claims against us could result in
our obligation to pay substantial damages, and cause us
reputational harm. Our participants may face similar legal
challenges, and these challenges could affect their ability or
willingness to trade on our electronic platform. The initiation
of lawsuits or other claims against us, or against our
participants with regard to their trading activities, could
adversely affect our business, financial condition and results
of operations, whether or not these lawsuits or other claims are
resolved in our favor. If we violate the terms and provisions of
the Commodity Exchange Act under which we operate our OTC
business, or if the CFTC concludes or believes we have violated
other provisions of the Commodity Exchange Act, we could also be
exposed to substantial liability. See also "— We
are currently subject to oversight in the United States and
regulation in the United Kingdom. Failure to comply with
existing regulatory requirements, and possible future changes in
these requirements, could adversely affect our business".
If we are compelled to monitor our OTC participants'
    compliance with applicable standards, our operating expenses and
    exposure to private litigation could increase.
While we have self regulatory status in our futures business, we
currently do not assume responsibility for enforcing compliance
with applicable commercial and legal standards by our
participants when they trade OTC contracts in our markets. If we
determined that it was necessary to undertake such a role in
respect of OTC products — for example, to deter
unfavorable regulatory actions, to respond to regulatory actions
or simply to maintain our participants' confidence in the
integrity of our OTC markets — we would have to invest
heavily in developing new compliance and surveillance systems,
and our operating expenses could increase significantly. Our
assumption of such a role could also increase our exposure to
lawsuits from dissatisfied participants and other parties
claiming that we failed to deter inappropriate or illegal
conduct.
Our compliance and risk management methods might not be
    effective and may result in outcomes that could adversely affect
    our financial condition and operating results.
Our ability to comply with applicable laws and rules is largely
dependent on our establishment and maintenance of compliance,
audit and reporting systems, as well as our ability to attract
and retain qualified compliance and other risk management
personnel. Our policies and procedures to identify, monitor and
manage our risks may not be fully effective. Management of
operational, legal and regulatory risk requires, among other
things, policies and procedures to record properly and verify a
large number of transactions and events. We cannot assure you
that our policies and procedures will always be effective or
that we will always be successful in monitoring or evaluating
the risks to which we are or may be exposed.
We may acquire other businesses, products or technologies.
    If we do, we may be unable to integrate them with our business,
    or we may impair our financial performance.
If appropriate opportunities present themselves, we may acquire
businesses, products or technologies that we believe have
strategic value. We may not be able to identify, negotiate or
finance any future acquisition successfully. Even if we do
succeed in acquiring a business, product or technology, we have
limited experience, other than with respect to the IPE, in
integrating a significant acquisition into our business. The
process of integration may produce unforeseen operating
difficulties and expenditures and may absorb significant
attention of our management that would otherwise be available
for the ongoing development of our business. If we make future
acquisitions, we may issue shares of our stock that dilute
shareholders, expend cash, incur debt, assume contingent
liabilities or create additional expenses related to amortizing
intangible assets with estimable useful lives, any of which
could harm our business, financial condition or results of
operations.
24
Risks Relating to this Offering
There has been no prior public market for our common
    stock, and we cannot assure you that an active trading market in
    our stock will develop or be sustained.
Prior to this offering, there has been no public market for our
common stock. We cannot assure you that an active trading market
will develop or be sustained after this offering. Although we
intend to apply to list our common stock on the New York Stock
Exchange, we do not know whether third parties will find our
common stock to be attractive or whether firms will be
interested in making a market in our common stock. Also, if you
purchase shares of common stock in this offering, you will pay a
price that was not established in public trading markets. The
initial public offering price of our common stock will be
determined through negotiation between us and the
representatives of the underwriters and thus may not be
indicative of the market price for our common stock after this
offering. Consequently, you may not be able to resell your
shares above the initial public offering price and may suffer a
loss on your investment.
Our current shareholders may have the ability to influence
    our business.
Upon completion of this offering, our current shareholders will
collectively
own            shares
of our common stock,
or           %
of the total shares of our common stock outstanding. As a
result, these shareholders may have the ability to influence the
election of our directors, the appointment of new management and
the potential outcome of all matters submitted to a vote of our
shareholders, including entering into mergers, the sale of
substantially all of our assets and other extraordinary events.
The market price of our common stock may fluctuate
    significantly, and it may trade at prices below the initial
    public offering price.
The market price of our common stock after this offering may
fluctuate significantly from time to time as a result of many
factors, including:
•
investors' perceptions of our prospects;
•
investors' perceptions of the prospects of the commodities
    markets and more broadly, the energy markets;
•
differences between our actual financial and operating results
    and those expected by investors and analysts;
•
changes in analysts' recommendations or projections;
•
fluctuations in quarterly operating results;
•
announcements by us or our competitors of significant
    acquisitions, strategic partnerships or divestitures;
•
changes or trends in our industry, including trading volumes,
    competitive or regulatory changes or changes in the commodities
    markets;
•
changes in valuations for exchanges and other trading facilities
    in general;
•
adverse resolution of pending litigation against us;
•
additions or departures of key personnel;
•
changes in general economic conditions; and
•
broad market fluctuations.
In particular, announcements of potentially adverse
developments, such as proposed regulatory changes, new
government investigations or the commencement or threat of
litigation against us or our major participants, as well as
announced changes in our business plans or those of our
competitors, could adversely affect the trading price of our
stock, regardless of the likely outcome of those developments.
Broad market and
25
industry factors may adversely affect the market price of our
common stock, regardless of our actual operating performance. As
a result, our common stock may trade at prices significantly
below the initial public offering price.
Future sales of our shares could adversely affect the
    market price of our common stock.
If our existing shareholders sell substantial amounts of our
common stock in the public market following this offering, or if
we issue a large number of shares of our common stock in
connection with future acquisitions, the market price of our
common stock could decline significantly. Sales by our existing
shareholders might also make it more difficult for us to raise
equity capital by selling new common stock at a time and price
that we deem appropriate.
Based on shares outstanding as of December 31, 2004, upon
completion of this offering, we will
have                      shares
of common stock outstanding. Of these outstanding shares,
the                      shares
sold in this offering will be freely tradable in the public
market. The
remaining                      shares
will be restricted securities as defined in the SEC's
Rule 144 and may be sold by the holders into the public
market from time to time in accordance with Rule 144.
Approximately           %
of these restricted shares will be eligible for sale under
Rule 144 following expiration of the lockup agreements
described below.
We and the holders
of           %
of our shares outstanding
and           %
of our shares issuable under options and restricted stock award
agreements outstanding as of December 31, 2004 —
including our directors and officers — have agreed to
a 180-day lockup, meaning that, for a period of 180 days
following the date of this prospectus, we and they will not sell
shares of our common stock. However, this lockup is subject to
several exceptions, and our lead underwriters in their sole
discretion may release any of the securities subject to the
lockup, at any time without notice.
After this offering, we intend to register
initially                      shares
of our common stock, or
approximately           %
of the shares of our common stock that will be outstanding at
that time, for issuance under our employee stock purchase plan
and upon the exercise of options granted under our employee
stock option plan or the issuance of shares pursuant to certain
restricted stock award agreements. We may increase the number of
shares registered for this purpose from time to time. Once we
register these shares, they will be able to be sold in the
public market upon issuance. We also intend to enter into a
registration rights agreement with designated holders of our
Class A2 shares. See "Shares Eligible for Future
Sale".
Delaware law and some provisions of our organizational
    documents make a takeover of our company more difficult.
Provisions of our charter and bylaws may have the effect of
delaying, deferring or preventing a change in control of our
company. A change of control could be proposed in the form of a
tender offer or takeover proposal that might result in a premium
over the market price for our common stock. In addition, these
provisions could make it more difficult to bring about a change
in the composition of our board of directors, which could result
in entrenchment of current management. For example, our charter
and bylaws will:
•
require that the number of directors be determined, and any
    vacancy or new board seat be filled, only by the board;
•
not permit shareholders to act by written consent, other than
    for certain class votes by holders of the Class A common
    stock;
•
not permit shareholders to call a special meeting unless at
    least a majority of the shareholders join in the request to call
    such a meeting;
•
allow a meeting of shareholders to be adjourned or postponed
    without the vote of shareholders;
•
permit the bylaws to be amended by a majority of the board
    without shareholder approval, and require that a bylaw amendment
    proposed by shareholders be approved by
    66
2
/
3
%
    of all outstanding shares;
26
•
require that notice of shareholder proposals be submitted
    between 90 and 120 days prior to the scheduled meeting; and
•
authorize the issuance of undesignated preferred stock, or
    "blank check" preferred stock, by our board of
    directors without shareholder approval.
In addition, Section 203 of the Delaware General
Corporation Law, or DGCL, imposes restrictions on mergers and
other business combinations between us and any holder of 15% or
more of our common stock. Delaware law prohibits a publicly held
corporation from engaging in a "business combination"
with an "interested shareholder" for three years after
the shareholder becomes an interested shareholder, unless the
corporation's board of directors and shareholders approve
the business combination in a prescribed manner or the
interested shareholder has acquired a designated percentage of
our voting stock at the time it becomes an interested
shareholder.
These and other provisions of our organizational documents and
Delaware law may have the effect of delaying, deferring or
preventing changes of control or changes in management of our
company, even if such transactions or changes would have
significant benefits for our shareholders. As a result, these
provisions could limit the price some investors might be willing
to pay in the future for shares of our common stock.
Your share ownership in our company will be immediately
    and substantially diluted.
If you purchase shares of our common stock in this offering, you
will experience an immediate and substantial dilution of
$           per
share (assuming the common stock is offered at
$           per
share, the midpoint of the estimated price range set forth on
the cover of this prospectus) because the price that you pay
will be substantially greater than the pro forma net tangible
book value per share of such stock based on the pro forma net
tangible book value per share as of December 31, 2004. This
dilution is due to the fact that when our existing shareholders
purchased or were otherwise issued shares of our common stock in
the past, they did so at prices that were significantly lower
than the price at which our common stock is being offered to the
public in this offering.
We do not expect to pay any dividends for the foreseeable
    future.
We do not anticipate paying any dividends to our shareholders
for the foreseeable future. Accordingly, investors must be
prepared to rely on sales of their common stock after price
appreciation to earn an investment return, which may never
occur. Investors seeking cash dividends should not purchase our
common stock. Any determination to pay dividends in the future
will be made at the discretion of our board of directors and
will depend upon our results of operations, financial
conditions, contractual restrictions, restrictions imposed by
applicable law or the SEC and other factors our board deems
relevant.
We will have broad discretion over the use of proceeds to
    us from this offering, and we may not use these funds in a
    manner of which you will approve.
We will have broad discretion to use the net proceeds to us from
this offering, and you will be relying on the judgment of our
board of directors and management regarding the use and
application of these proceeds. Although we expect to use the net
proceeds for working capital and general corporate purposes, we
have not allocated these net proceeds for specific purposes and
cannot assure you that we will use these funds in a manner of
which you will approve.
27
FORWARD-LOOKING STATEMENTS
This prospectus, including the sections entitled
"Prospectus Summary", "Risk Factors",
"Management's Discussion and Analysis of Financial
Condition and Results of Operations" and
"Business", contains forward-looking statements that
are based on our present beliefs and assumptions and on
information currently available to us. You can identify
forward-looking statements by terminology such as
"may", "will", "should",
"expects", "intends", "plans",
"anticipates", "believes",
"estimates", "predicts",
"potential", "continue", or the negative of
these terms or other comparable terminology. These statements
relate to future events or our future financial performance and
involve known and unknown risks, uncertainties and other factors
that may cause our actual results, levels of activity,
performance or achievements to differ materially from those
expressed or implied by these forward-looking statements. These
risks and other factors include those listed under "Risk
Factors" and elsewhere in this prospectus. Although we
believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements. We caution you
not to place undue reliance on these forward-looking statements.
Forward-looking statements include, but are not limited to, our
discussion of the following matters:
•
The statements in "Prospectus Summary — The
    Offering" and "Dividend Policy" concerning our
    current intention not to pay any cash dividends.
•
The statements in "Management's Discussion and
    Analysis of Financial Condition and Results of
    Operations — Our Business Environment" and
    "Industry Overview — Industry Trends —
    Increasing Adoption of Energy Commodities as an Investable Asset
    Class" and "— New Market Participants"
    concerning management's expectations regarding the business
    environment in which it operates and trends in our industry.
•
The statements in "Management's Discussion and
    Analysis of Financial Condition and Results of
    Operations — Sources of Revenues" concerning our
    plans not to adjust commission rates and our belief that we will
    attract trading without entering into order flow agreements.
•
The statements in "Management's Discussion and
    Analysis of Financial Condition and Results of
    Operations — Components of Expenses" concerning
    management's expectations of various costs.
•
The statements in "Management's Discussion and
    Analysis of Financial Condition and Results of
    Operations — Future Capital Requirements"
    concerning our belief that cash flows will be sufficient to fund
    our working capital needs and capital expenditures through the
    end of 2006.
•
The statements in "Business — Our Growth
    Strategy" concerning our plans and intentions to attract
    new market participants, increase the connectivity to our
    marketplace, expand our market data business, develop new
    products and services, and pursue select strategic acquisitions
    and alliances.
•
The statements in "Business — Recent
    Developments" concerning the benefits that we anticipate
    will result from the complete migration of our open-outcry
    futures trading activity to our electronic platform.
•
The statements "Business — Our Products and
    Services" concerning our belief that our electronic trade
    confirmation service could attract new market participants.
•
The statements in "Business — Product
    Development" concerning our plans to introduce trading in
    futures and spot contracts linked to E.U. Emissions Allowances.
•
The statements in "Business — Technology"
    concerning our electronic platform and disaster recovery system
    technologies and our belief that we would be able to gain access
    on a timely basis to comparable products and services if our key
    technology contracts were terminated.
•
The statements in "Regulation and Legal Proceedings"
    concerning regulation and litigation involving our company.
28
USE OF PROCEEDS
Assuming an initial offering price of
$          per
share, which is the mid-point of the estimated price range set
forth on the cover of this prospectus, we expect to receive net
proceeds from this offering of approximately
$          after
deducting the estimated underwriting discount and offering
expenses, which are payable by us. We will not receive any of
the proceeds from the sale of shares of our common stock by the
selling shareholders, including any proceeds from the selling
shareholders' sale of additional shares upon exercise of
the underwriters' option to purchase additional shares.
The principal purposes of this offering are to obtain additional
capital, create a public market for our common stock, facilitate
our future access to public equity markets, enable us to provide
incentives to our employees through equity-linked compensation
programs and provide increased visibility in the market.
Publicly tradable shares of our common stock may also be used as
an acquisition currency. On November 23, 2004, we borrowed
the entire $25.0 million available under our credit
facility with Wachovia Bank, National Association to fund a
portion of the $67.5 million redemption of our Class B
common stock. We intend to use a portion of the proceeds of this
offering for the repayment in full of all outstanding debt under
this facility, which as of December 31, 2004, amounted to
$13.0 million, bearing interest at a six-month LIBOR locked
interest rate of 3.40%. We otherwise currently do not have
specific plans for the use of the net proceeds of the offering.
We expect that we will use the net proceeds for general
corporate purposes, including expanding and diversifying our
products and services.
We may also use a portion of the net proceeds to acquire
complementary businesses, products and technologies, although we
have no current agreements or commitments to do so. Pending
these uses, we intend to invest the net proceeds of this
offering in short-term money-market and money-market equivalent
securities.
DIVIDEND POLICY
We have never declared or paid cash dividends on our capital
stock. We do not anticipate paying any cash dividends in the
foreseeable future. We currently intend to retain all available
funds and any future earnings to fund the development and growth
of our business.
29
CAPITALIZATION
The following table sets forth our cash and cash equivalents,
restricted cash, short-term investments and capitalization as of
December 31, 2004 on a pro forma as adjusted basis to
reflect the sale
of                      shares
of our common stock offered by us in this offering at an assumed
initial public offering price of
$          per
share, the midpoint of the estimated price range set forth on
the cover of this prospectus, after deducting the estimated
underwriting discounts and commissions and our estimated
offering expenses payable by us.
The outstanding share information excludes:
•
shares
    of our common stock issuable upon the exercise of stock options
    outstanding as of December 31, 2004 under our 2000 Stock
    Option
    Plan,                      shares
    issuable pursuant to outstanding awards under the 2004
    Restricted Stock Plan as of December 31, 2004
    and                      shares
    issuable pursuant to outstanding awards under the 2003
    Restricted Stock Deferral Plan for Outside Directors as of
    December 31, 2004; and
•
shares
    available for future issuance under our 2000 Stock Option
    Plan,                      shares
    available for future issuance under our 2004 Restricted Stock
    Plan
    and                      shares
    available for future issuance under our 2003 Restricted Stock
    Deferral Plan for Outside Directors as of December 31, 2004.
This table should be read in conjunction with "Selected
Consolidated Financial Data", "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" and our consolidated financial statements and
related notes included elsewhere in this prospectus.
As of December 31,
2004
As
Adjusted
for this
Actual
Offering
(in thousands)
Cash and cash equivalents
$
61,199
$
Restricted cash
18,421
18,421
Short-term investments
5,700
5,700
Current portion of revolving credit facility(1)
12,000
—
Long-term portion of revolving credit facility
13,000
—
Shareholders' equity(2):
Preferred Stock, $0.01 par value per share, no shares
    authorized, issued or outstanding, actual;
    25,000,000 shares authorized and no shares issued or
    outstanding, as adjusted for this offering
—
—
Common Stock, $0.01 par value per share, no shares
    authorized, issued or outstanding and undesignated,
    actual;         shares
    authorized
    and         shares
    issued and outstanding, as adjusted for this offering(3)
—
Class A, Series 1 common stock, $0.01 per value
    per share, 22,900,638 shares authorized;
    11,450,319 shares issued and outstanding,
    actual;         shares
    authorized
    and         shares
    issued and outstanding, as adjusted for the recapitalization and
    this offering
115
Class A, Series 2 common stock, $0.01 par value
    per share, 300,000,000 shares authorized,
    206,146,905 shares issued and 200,009,670 shares
    outstanding,
    actual;         shares
    authorized
    and         shares
    issued and outstanding, as adjusted for the recapitalization and
    this offering
2,061
Treasury stock, at cost
(5,541
)
(5,541
)
Additional paid-in capital
53,484
Deferred stock compensation
(6,087
)
(6,087
)
Retained earnings
71,172
71,172
Accumulated other comprehensive income
34,527
34,527
Total shareholders' equity
149,731
Total capitalization
$
174,731
$
(1)
This amount was repaid in full in January 2005.
(2)
In connection with our recapitalization, effective upon the
    closing of this offering, we will amend our charter and bylaws
    to authorize the creation of a new class of common stock and
    preferred stock, and effect
    a            for
    1 reverse stock split of our outstanding shares of Class A
    common stock. For a description of our recapitalization, see
    "Organization and Recapitalization".
(3)
In November 2004, we exercised the mandatory redemption option
    and redeemed all 11,450,319 shares of Class B redeemable
    common stock. Until the effectiveness of our recapitalization,
    these shares hold the status of undesignated shares of common
    stock.
30
DILUTION
If you invest in our common stock, your interest will be diluted
to the extent of the difference between the initial public
offering price per share of our common stock and the net
tangible book value per share of common stock upon the
completion of this offering.
The following information is presented on a pro forma basis
reflecting the recapitalization and the creation of a new class
of common stock, which together with our Class A common
stock, we refer to as common stock. The recapitalization is
described in greater detail under the heading "Organization
and Recapitalization".
The table below illustrates per share dilution to new investors,
beginning with pro forma net tangible book value per share. We
determined pro forma net tangible book value per share by
dividing the pro forma net tangible book value (total book value
of tangible assets less total liabilities) by the pro forma
number of shares of common stock outstanding as of
December 31, 2004. Our pro forma net tangible book value as
of December 31, 2004 equaled $63.7 million, or
$          per
share of common stock.
After giving effect to the sale of shares of common stock to be
sold in this offering at an assumed initial public offering
price of
$          per
share, as specified above, and after deducting the estimated
underwriting discount and offering expenses payable by us, our
pro forma net tangible book value as adjusted, as of
December 31, 2004, would have equaled approximately
$           million,
or
$          per
share of common stock. This represents an immediate increase in
pro forma net tangible book value of
$          per
share to our existing shareholders and an immediate dilution in
pro forma net tangible book value of
$          per
share to new investors of common stock in this offering. If the
initial public offering price is higher or lower, the dilution
to new investors will be greater or less, respectively. The
following table illustrates this per share dilution to new
investors purchasing our common stock in this offering:
Assumed initial public offering price per share
$
Pro forma net tangible book value per share as of
    December 31, 2004
$
Increase in pro forma net tangible book value per share
    attributable to this offering
Pro forma net tangible book value per share after this offering
Dilution per share to new investors
$
$
The following table summarizes, as of December 31, 2004,
the differences between our existing shareholders and new
investors with respect to the number of shares of common stock
issued by us, the total consideration paid and the average price
per share paid. The calculations with respect to shares
purchased by new investors in this offering reflect an assumed
initial public offering price of
$          per
share, as specified above.
Shares Purchased
Total Consideration
Average
Price Per
Number
Percentage
Amount
Percentage
Share
Existing shareholders
%
%
$
New investors(1)
Total
100
%
$
100
%
(1)
If the underwriters exercise their option to purchase additional
    shares in full, the selling shareholders will sell an
    additional                      shares,
    and new investors will
    own                     %
    of our outstanding common stock.
The preceding tables assume no issuance of shares of common
stock under our stock plans after December 31, 2004. As of
December 31,
2004,                      shares
were subject to outstanding options under our 2000 Stock Option
Plan at a weighted average exercise price of
$           per
share. Also, there
were                      shares
subject to outstanding awards under the 2004 Restricted Stock
Plan
and                      shares
subject to outstanding awards under the 2003 Restricted Stock
Deferral Plan for Outside Directors as of December 31,
2004. To the extent that these outstanding options are exercised
or restricted shares are issued, there will be further dilution
to new investors.
31
SELECTED CONSOLIDATED FINANCIAL DATA
The following tables present our selected consolidated financial
data as of and for the dates and periods indicated. We derived
the selected consolidated financial data set forth below for the
years ended December 31, 2004, 2003 and 2002 and as of
December 31, 2004 and 2003 from our consolidated financial
statements, which have been audited by Ernst & Young
LLP, independent registered public accounting firm, and are
included elsewhere in this prospectus. We derived the selected
consolidated financial data set forth below as of
December 31, 2002, 2001 and 2000, for the year ended
December 31, 2001, for the period from May 11, 2000
through December 31, 2000 and for the period from
January 1, 2000 through May 10, 2000 from our audited
consolidated financial statements, which are not included in
this prospectus.
The selected consolidated financial data, captioned as
"Predecessor Company", with respect to the period
January 1, 2000 to May 10, 2000, reflects the
financial statements of our predecessor, CPEX. Upon our
formation on May  11, 2000, CPEX contributed all of
its assets and liabilities to us. CPEX's operations prior
to our formation on May 11, 2000 qualify as a predecessor
entity under regulations of the SEC and have therefore been
included in our consolidated financial statements. We converted
from a limited liability company to a corporation on
June 15, 2001.
Effective upon the closing of this offering, we will amend our
charter and bylaws to simplify our capital structure and
governance procedures. We describe the transactions that are
part of our planned recapitalization under the heading
"Organization and Recapitalization".
The historical results presented below are not necessarily
indicative of the results to be expected for any future period.
The following selected consolidated financial data set forth
below should be read in conjunction with our consolidated
financial statements and related notes and
"Management's Discussion and Analysis of Financial
Condition and Results of Operations" included elsewhere in
this prospectus.
Predecessor
Company
Period from
Period from
May 11, 2000
January 1, 2000
Year Ended December 31,
through
through
December 31,
May 10,
2004
2003
2002
2001
2000
2000
(in thousands, except for share and per share data)
Consolidated Statement of Income/(Loss) Data
Revenues(1):
Transaction fees, net(2)
$
90,906
$
81,434
$
118,794
$
63,526
$
2,711
$
—
Data services fees
9,691
7,742
5,141
2,589
—
—
Trading access fees
3,595
2,461
490
102
—
—
Other
4,222
2,109
1,065
646
—
—
Total revenues
108,414
93,746
125,490
66,863
2,711
—
Operating expenses:
Cost of hosting
1,279
1,715
3,962
2,245
766
—
Compensation and benefits
30,074
26,236
27,906
15,970
2,777
193
Professional services
14,523
15,138
15,876
8,301
2,695
—
Selling, general and administrative
13,120
12,398
12,425
6,365
1,102
391
Depreciation and amortization(3)
17,024
19,341
14,368
7,052
1,232
(12
)
Total operating expenses
76,020
74,828
74,537
39,933
8,572
572
32
Predecessor
Company
Period from
Period from
May 11, 2000
January 1, 2000
Year Ended December 31,
through
through
December 31,
May 10,
2004
2003
2002
2001
2000
2000
(in thousands, except for share and per share data)
Operating income (loss)
32,394
18,918
50,953
26,930
(5,861
)
(572
)
Other income (expense), net
1,328
948
1,492
(385
)
(331
)
(23
)
Income (loss) before income taxes
33,722
19,866
52,445
26,545
(6,192
)
(595
)
Income tax expense
11,773
6,489
17,739
10,748
—
—
Net income (loss)
$
21,949
$
13,377
$
34,706
$
15,797
$
(6,192
)
$
(595
)
Deduction for accretion of redeemable common stock(4)
—
(1,768
)
(3,656
)
(1,876
)
—
—
Net income (loss) available to common shareholders
$
21,949
$
11,609
$
31,050
$
13,921
$
(6,192
)
$
(595
)
Earnings per common share (pro forma and actual)(5):
Basic and Diluted
$
0.10
$
0.05
$
0.14
$
0.12
Weighted average common shares outstanding (pro forma and
    actual)(5):
Basic
211,460,434
217,315,866
217,570,408
119,114,688
Diluted
212,248,312
218,558,834
219,400,380
119,495,156
(1)
We generate revenues from related parties in the ordinary course
    of our business. For a presentation and discussion of our
    revenues attributable to related parties for the years ended
    December 31, 2004, 2003 and 2002, see our consolidated
    statements of income and note 11 in our consolidated
    financial statements that are included elsewhere in this
    prospectus.
(2)
Our transaction fees are presented net of rebates. See
    "Management's Discussion and Analysis of Financial
    Condition and Results of Operations — Sources of
    Revenues — Transaction Fees."
(3)
Our chief executive officer purchased CPEX in October 1997,
    which resulted in negative goodwill of $266,000 and a writedown
    of property and equipment. The negative amounts of depreciation
    and amortization expense during the period from January 1,
    2000 through May 10, 2000 primarily relate to the
    amortization of the negative goodwill in excess of the
    depreciation of property and equipment. In connection with our
    acquisition of the IPE in June 2001, we amortized
    $1.7 million in goodwill and indefinite-lived other
    intangible assets during the year ended December 31, 2001.
    We did not record any amortization expense on these assets, in
    accordance with the accounting standards, subsequent to 2001.
(4)
We redeemed all of our Class B redeemable common stock on
    November 23, 2004 at a price of $5.895 per share, for
    aggregate consideration of $67.5 million. Upon its issuance
    on June 18, 2001, we recorded our Class B redeemable
    common stock at its discounted present value of
    $60.2 million. We recorded charges to retained earnings for
    the accretion of this amount up to the $67.5 million
    redemption value of our Class B redeemable common stock
    over a two-year period ending in June 2003, which was the
    earliest potential redemption date.
(5)
We have presented our data for the year ended December 31,
    2001 on a pro forma basis as if our conversion from a limited
    liability company to a corporation, which occurred on
    June 15, 2001, had occurred on January 1, 2001. For
    more details of this conversion, see the description under the
    heading "Organization and Recapitalization". The share
    and per share data for the years ended December 31, 2004,
    2003 and 2002 are based on actual historical data.
33
As of December 31,
2004
2003
2002
2001
2000
(in thousands)
Consolidated Balance Sheet Data
Cash and cash equivalents(1)
$
61,199
$
44,913
$
33,627
$
25,610
$
9,485
Short-term investments
5,700
12,000
4,000
—
—
Restricted cash and restricted short-term investments(1)(2)
18,421
36,797
8,876
8,157
—
Total current assets
100,042
105,893
60,841
46,814
13,234
Property and equipment, net
19,364
25,625
32,843
18,567
9,104
Goodwill and other intangible assets, net
86,075
81,448
73,950
67,727
—
Total assets
207,518
214,879
170,053
134,957
22,357
Total current liabilities
34,440
17,917
17,603
30,023
5,183
Revolving credit facility — current and long-term(1)
25,000
—
—
—
—
Related-party notes payable — current and long-term
—
—
—
16,201
15,540
Obligations under capital leases — current and
    long-term
482
2,130
2,656
1,306
—
Class B redeemable common stock(1)
—
67,500
65,732
62,076
—
Shareholders' and members' equity(2)
149,731
118,776
75,981
34,770
1,634
(1)
The redemption of the Class B redeemable common stock
    occurred in November 2004, which resulted in an
    $18.5 million reduction in cash and cash equivalents, a
    $24.0 million reduction in restricted short-term
    investments, a $25.0 million increase in current and
    long-term debt and a corresponding $67.5 million reduction
    in Class B redeemable common stock.
(2)
We early adopted FASB Interpretation No. 46,
    "Consolidation of Variable Interest Entities", during
    2003 which resulted in the consolidation of a variable interest
    entity and an increase in restricted short-term investments and
    a corresponding increase in additional paid-in capital for
    $24.0 million.
34
Year Ended December 31,
2004
2003
2002
2001(1)
(in thousands, except for percentages)
Operating Data:
Our Market Share of Selected Key Products:
Total crude oil futures contracts traded globally
78,477
69,450
67,173
55,926
IPE Brent Crude oil futures contracts traded
25,458
24,013
21,493
18,395
Our crude oil futures market share(2)
32.4
%
34.6
%
32.0
%
32.9
%
Total cleared Henry Hub natural gas contracts traded on us and
    NYMEX-ClearPort
22,308
6,869
1,170
—
Our cleared Henry Hub natural gas contracts traded
16,954
4,512
792
—
Our market share — cleared Henry Hub natural gas vs.
    NYMEX-ClearPort(3)
76.0
%
65.7
%
67.7
%
—
%
Total cleared PJM financial power contracts traded on us and
    NYMEX-ClearPort
1,256
149
—
—
Our cleared PJM financial power contracts traded
1,022
6
—
—
Our market share — cleared PJM financial power vs.
    NYMEX-ClearPort(4)
81.4
%
4.0
%
—
%
—
%
Our Average Daily Trading Fee Revenues(5):
Our futures business average daily exchange fee revenues
$
179
$
158
$
125
$
92
Our bilateral OTC business average daily commission fee revenues
80
112
330
194
Our cleared OTC business average daily commission fee revenues
94
24
5
—
Our total average daily commission fee and exchange fee revenues
$
353
$
294
$
460
$
286
Our Trading Volume(6):
Annual futures volume
35,541
33,341
30,441
26,423
Futures average daily volume
140
132
121
104
Annual OTC volume
30,978
24,270
44,005
24,881
OTC average daily volume
123
97
175
99
(1)
Information for 2001 for our futures business reflects trading
    activity for the entire year, including trading activity that
    occurred prior to our acquisition of the IPE in June 2001.
(2)
Our crude oil futures market share is calculated based on the
    number of IPE Brent Crude futures contracts traded as compared
    to the total IPE Brent Crude futures contracts and NYMEX Light
    Sweet Crude and Dublin Brent Crude futures contracts traded.
(3)
Our cleared Henry Hub market share versus NYMEX-ClearPort is
    calculated based on the number of IntercontinentalExchange
    cleared Henry Hub natural gas contracts traded as a percentage
    of the total IntercontinentalExchange cleared Henry Hub natural
    gas contracts and NYMEX-ClearPort Henry Hub natural gas futures
    contracts traded.
(4)
Our cleared PJM financial power market share versus
    NYMEX-ClearPort is calculated based on the number of
    IntercontinentalExchange cleared PJM financial power contracts
    traded as a percentage of the total IntercontinentalExchange
    cleared PJM financial power contracts and NYMEX-ClearPort
    cleared PJM financial power contracts traded. PJM refers to the
    Pennsylvania, New Jersey and Maryland power trading hub. The
    NYMEX-ClearPort cleared PJM financial power contract was
    launched in April 2003 and our PJM financial power contract was
    launched in November 2003. Data regarding the volumes of
    NYMEX-ClearPort cleared PJM financial power contracts traded is
    derived from the Futures Industry Association.
(5)
Represents the total commission fee and exchange fee revenues
    for the year divided by the number of trading days during that
    year.
(6)
Volume is calculated based on the number of contracts traded in
    our markets, or the number of round turn trades. Each round turn
    represents a matched buy and sell order of one contract. Average
    daily volume represents the total volume, in contracts, for the
    year divided by the number of trading days during that year.
35
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION
AND RESULTS OF OPERATIONS
The following discussion contains forward-looking statements
that involve risks and uncertainties. Our actual results could
differ materially from those anticipated in these
forward-looking statements for many reasons, including those set
forth under the heading "Risk Factors" and elsewhere
in this prospectus. The following discussion is qualified in its
entirety by, and should be read in conjunction with, the more
detailed information contained in our "Selected
Consolidated Financial Data" and our consolidated financial
statements and related notes included elsewhere in this
prospectus.
Overview
We operate the leading global futures and over-the-counter, or
OTC, marketplace for trading a broad array of energy products.
Our marketplace brings together buyers and sellers of
derivatives and physical energy commodities contracts through
our leading, Internet-based electronic trading platform. We
operate our business in two distinct markets: futures markets
and OTC markets. Futures markets offer trading in standardized
derivative contracts on a regulated exchange and OTC markets
offer trading in over-the-counter derivative contracts,
including contracts that provide for the physical delivery of an
underlying commodity and financial settlement based on the
prices of underlying commodities. During 2004, 35.5 million
contracts were traded in our futures markets and
31.0 million contracts were traded in our OTC markets, up
6.6% from 33.3 million futures contracts traded in 2003 and
up 27.6.% from 24.3 million OTC contracts traded in 2003.
For financial reporting purposes, our business is comprised of
two segments: our futures business segment and our OTC business
segment. Our futures business segment consists of trade
execution in futures contracts and options on futures contracts,
which we conduct through our subsidiary, the IPE. We presently
offer futures trading both on our electronic platform and on our
open-outcry trading floor. We recently announced our intention
to close our open-outcry trading floor in London on
April 7, 2005. Thereafter, all of our futures trading will
be conducted exclusively on our electronic platform. We made
this decision to maintain and enhance our competitive position
in our futures markets, and to take advantage of the increasing
acceptance and adoption of electronic trading. Our OTC business
segment consists of trade execution in OTC energy contracts
conducted exclusively on our electronic platform and the
provision of trading-related services, including OTC electronic
trade confirmation and OTC risk management functionality. As
part of both our futures and OTC business segments, we also
offer a variety of market data services.
We have experienced rapid growth in our revenues, net income and
operating cash flow since trading commenced on our electronic
platform in August 2000. Our consolidated revenues grew to
$108.4 million for the year ended December 31, 2004
from $2.7 million for the combined year ended
December 31, 2000. Our consolidated net income increased to
$21.9 million for the year ended December 31, 2004
from a net loss of $6.8 million for the combined year ended
December 31, 2000. Our consolidated net cash flows from
operating activities grew to $40.2 million in net cash
provided by operating activities for the year ended
December 31, 2004 from $2.9 million in net cash used
in operating activities for the combined year ended
December 31, 2000.
Corporate Structure and Ownership
In 1997, Jeffrey C. Sprecher, our founder, chairman and chief
executive officer, acquired Continental Power Exchange, Inc., or
CPEX, our predecessor company, to develop a platform to provide
a more transparent and efficient market structure for OTC energy
commodities trading. In May 2000, our company was formed, and
CPEX contributed all of its assets to us, which consisted
principally of electronic trading technology, and its
liabilities, in return for a minority equity interest in our
company. In connection with our formation, seven leading
wholesale commodities market participants, which we refer to as
our Initial Shareholders, acquired equity interests in our
company and entered into order flow agreements with us. In
November 2000, six leading natural gas and power companies,
which we refer to as the Gas and Power Firms, acquired equity
interests in our business, entered into order flow agreements
with us and made a $30.0 million cash payment to us. The
following firms are our Initial Shareholders:
BP Exploration and Oil, Inc., Deutsche
36
Bank Sharps Pixley Inc., The Goldman Sachs Group, Inc., Morgan
Stanley Capital Group Inc., S T Exchange Inc. (an affiliate
of Royal Dutch Shell), Société Générale
Financial Corporation and Total Investments USA Inc. (an
affiliate of Total). The Gas and Power Firms that are currently
shareholders are affiliated with the following firms: American
Electric Power Company, Duke Energy, El Paso Energy
Partners and Mirant. Two additional Gas and Power Firms, Aquila
and Reliant, are no longer shareholders. The order flow
agreements committed the Initial Shareholders and the Gas and
Power Firms to execute minimum annual volumes of transactions on
our electronic platform. These order flow agreements expired
between 2002 and 2003. See "— Sources of
Revenues — Transaction Fees" and "Certain
Relationships and Related Transactions".
On June 18, 2001, we expanded our marketplace to include
futures trading by acquiring IPE Holdings Plc, the owner of the
IPE, in a share-for-share exchange. At that time, the IPE was
operated predominantly as a floor-based open-outcry exchange. In
connection with this acquisition, we converted from a limited
liability company, IntercontinentalExchange LLC, to our present
corporate form by merging into IntercontinentalExchange, Inc., a
Delaware corporation and the surviving entity of the merger. In
connection with the acquisition, we issued 11,450,319
Class A1 shares and 11,450,319 Class B redeemable
shares to the IPE shareholders in return for their shares in the
IPE. The Class B redeemable shares were subject to
redemption at $5.895 per share under certain circumstances
related to the IPE's benchmark contracts being traded
exclusively on our electronic platform for a period of time. In
November 2004, we amended our charter to permit early redemption
of the Class B redeemable shares at $5.895 per share,
and redeemed all 11,450,319 Class B redeemable shares for
an aggregate redemption price of $67.5 million.
Effective upon the closing of this offering, we will amend our
charter and bylaws to create a new class of common stock, which
we refer to as new common stock, and we will grant conversion
rights to our holders of Class A1 shares and
Class A2 shares, which will permit them to convert
their shares into shares of new common stock, subject to such
conditions as our board deems appropriate. In our amended
charter, we also intend to authorize a reverse stock split to
reduce the number of outstanding Class A1 shares and
Class A2 shares. For a detailed discussion of our
recapitalization, please refer to "Organization and
Recapitalization" elsewhere in this prospectus.
Our Business Environment
Trading activity in global derivatives markets has risen in the
past decade as the number of available trading products and
venues has increased. This, in turn, has enabled a growing
number and range of market participants to access these markets.
As energy markets began to deregulate in the early 1990's,
new derivatives products were developed to satisfy the
increasing demand for energy risk management tools and
investment strategies. The range of derivative energy products
has expanded to include instruments such as futures, forwards,
swaps, differentials, spreads and options. Volume growth in both
our futures markets and our OTC markets has been driven by
steadily increasing demand for these contracts and our ability
to provide liquidity in the markets for these products.
Our business is primarily transaction-based, and changes in
trading volumes have a direct impact on our business and
profitability. Trading volumes are driven primarily by the
degree of volatility in commodities prices. Higher price
volatility increases the need to hedge contractual price risk
and creates opportunities for arbitrage or speculative trading.
In addition to price volatility, changes in global energy
prices, such as those experienced in recent years in crude oil,
can have a significant impact on our trading volumes. While our
trading volumes and transaction fees decreased in our OTC
business segment in 2003 from the levels in 2002, following a
period of reduced liquidity in the OTC markets, our trading
volumes and transaction fees increased in our futures business
segment during the same period. Trends in our trading volumes
and transaction fees have also been driven by varying levels of
liquidity both in our markets and in the broader markets for
energy commodities trading, which influence trading volumes
across all of the markets in which we operate. Our trading
volumes in our futures business segment may also be affected by
our decision to close our open-outcry trading floor.
37
The futures markets are highly regulated and offer trading of
standardized contracts. The futures markets are also more
structured and mature than the institutional markets for OTC
energy trading. According to the Futures Industry Association,
the number of energy futures contracts traded in 2004 was
243.5 million, up from 68.7 million contracts traded
in 1995, representing an average compounded growth rate of
15.1% per annum. In our futures business segment, rising
demand for, among other things, risk management instruments in
the energy sector has driven record trading volumes for seven
consecutive years.
Unlike the futures markets, the OTC markets generally involve
limited regulation and offer customization of contract terms by
counterparties. While the OTC markets are maturing, contracts
traded in the OTC markets generally remain less standardized
than the futures markets and the markets generally have been
characterized by opaqueness and fragmentation of liquidity. We
have introduced a number of structural changes to OTC markets to
increase both transparency and liquidity, including the
introduction of our electronic platform, cleared OTC contracts
and transaction-based indices.
In our OTC business segment, we experienced rapid growth in
trading volumes through the middle of 2002. Beginning in
mid-2002, however, the North American OTC markets experienced a
dramatic decline in liquidity and trading volumes following
highly publicized problems involving energy companies, including
widespread credit downgrades, investigations by the Department
of Justice, the Federal Energy Regulatory Commission and the
Federal Trade Commission, relating to alleged manipulative
trading and price reporting practices, misstatements of
financial results, and other matters. As a result of the
foregoing, several significant market participants reduced or
eliminated their energy trading operations near the end of 2002.
While trading volumes in our OTC markets declined to
24.3 million contracts in 2003 from 44.0 million
contracts in 2002, primarily as a result of these events, we
experienced a 9.5% increase from 2002 to 2003 in trading volumes
in our futures markets, partially as a result of some
participants migrating their trading to the more regulated
futures markets.
As a result of these events, participants in the OTC markets
became increasingly focused on managing counterparty credit risk
and trading for hedging needs, rather than speculation or
arbitrage. As the credit quality of trading counterparties and
the overall credit environment improved during late 2003 and new
risk management tools were introduced, participants began to
increase their activity in the OTC markets. With the
introduction of cleared OTC contracts, the market began to
experience an influx of new OTC market participants. Financial
services companies, such as financial institutions, hedge funds
and proprietary trading firms began entering the OTC markets in
increasing numbers due to the introduction of new bilateral and
cleared trading products, electronically available markets, risk
management tools, increased price volatility, and the
availability of experienced energy traders displaced from
merchant energy companies.
We launched the industry's first cleared OTC energy
contracts in March 2002, which reduced the amount of capital
required to trade and the credit risk associated with bilateral
OTC trading by interposing an independent clearinghouse as a
counterparty to trades in these new contracts. Clearing through
a central clearinghouse offers market participants the ability
to cross-margin, which generally lowers the amount of capital
participants are required to post. As a result of the
introduction of OTC clearing, the addition of new participants
and an improved credit environment in the markets for energy
commodities trading, our OTC markets experienced steady growth
in 2004, although still below the record trading volumes
experienced in 2002. Trading volumes in our OTC markets
increased 27.6% to 31.0 million contracts in 2004 from
24.3 million contracts in 2003. This trend of volume growth
has continued from 2004 into the first quarter of 2005.
We believe that the long-standing move toward electronic trade
execution, together with the lower barriers to entry for new
market participants and the increased adoption of energy
commodities as an investable asset class, will support continued
growth in our markets. As participants continue to use more
sophisticated financial instruments and risk management
approaches and strategies to help manage their exposure to
energy commodities, we believe there remains considerable
opportunity for further growth in energy derivatives trading on
a global basis.
38
Variability in Quarterly Comparisons
In addition to general conditions in the financial markets and
in the energy markets in particular, energy trading has
historically been subject to variability in trading volumes due
primarily to five key factors. These factors include
geopolitical events, weather, perceived supply and demand
imbalances in underlying energy commodities, the number of
trading days in a quarter and seasonality.
•
Geopolitical Events:
Geopolitical events tend to impact
    global oil prices and may impact global oil supply. Because
    crude oil prices often move in conjunction with changes in the
    perception of geopolitical risk, these events in the past have
    impacted trading activities in our markets due to the increased
    need for risk management in times of uncertainty.
•
Weather:
Weather events have been an important factor in
    energy price volatility and the supply and demand of energy
    commodities and, therefore, the trading activities of market
    participants. Unexpected or extreme weather conditions, such as
    low temperatures or hurricanes, and other events that cause
    demand increases, supply disruptions or unexpected volatility
    tend to result in business disruptions and expanded hedging and
    trading activity in our markets.
•
Real and Perceived Supply and Demand Imbalances:
Government agencies, such as the Energy Information Agency,
    regularly track energy supply data. Reporting on supply or
    production may impact trading volumes due to real or perceived
    supply and demand imbalances.
•
Number of Trading Days:
The variability in the number of
    business days in each quarter affects our revenues, and will
    affect quarter-to-quarter revenue comparisons, since trading
    generally only takes place on business days.
•
Seasonality:
Participants engaged in oil, natural gas and
    power businesses tend to experience moderate seasonal
    fluctuations in demand, although such seasonal impacts have been
    negated in periods of high volume trading.
These and other factors could cause our revenues to fluctuate
from quarter to quarter. These fluctuations may affect the
reliability of quarter to quarter comparisons of our revenues
and operating results when, for example, these comparisons are
between quarters in different seasons. Inter-seasonal
comparisons will not necessarily be indicative of our results
for future periods.
Segment Reporting
For financial reporting purposes, our business is divided into
two segments: our futures business segment and our OTC business
segment. For a discussion of these segments and related
financial disclosure, refer to note 15 to our consolidated
financial statements and related notes included elsewhere in
this prospectus.
Our Futures Business Segment
We conduct our futures business through our subsidiary, the IPE.
The IPE operates as a RIE in the United Kingdom, where it is
regulated by the FSA. The IPE was founded in 1980 as a
traditional open-outcry exchange by a group of leading energy
and trading companies. All futures and options trades executed
in our futures markets are cleared by LCH.Clearnet. Only
exchange members may execute trades in our futures markets, for
their own or their clients' account. Members and their
participants include many of the world's largest energy
companies and leading financial institutions. We do not risk our
own capital by engaging in any trading activities or by
extending credit to market participants.
We currently offer futures trading both on our electronic
platform and on our open-outcry trading floor. We recently
announced our intention to close our open-outcry trading floor
on April 7, 2005 in London. Thereafter, all of our futures
trading will be conducted exclusively on our electronic
platform. Our decision was made to take advantage of the
increasing acceptance and adoption of electronic trading and to
maintain and enhance our competitive position in our futures
markets. See "Business — Recent
Developments".
39
We expect to achieve cost savings ranging from $5.0 million
to $8.0 million per annum on an ongoing basis in connection
with our decision to close the trading floor. These cost savings
primarily relate to reduced compensation and benefits expenses,
rent and occupancy expenses and selling, general and
administrative expenses. However, in the near term, any cost
savings will be offset by a charge we expect to take primarily
in the second quarter of 2005 ranging from $6.0 million to
$9.0 million in connection with expenses we expect to incur
as part of the closure of the open-outcry trading floor and full
migration of futures trading to our electronic platform. These
expenses primarily include lease termination costs, employee
termination costs and property and equipment disposals relating
to our open-outcry trading floor. Furthermore, because our
electronic platform can accommodate substantially greater
trading volumes, and the cost of operating our platform is
largely fixed, we expect to benefit from increased operating
leverage in our futures business.
We offer market participants trading in two types of instruments
in our futures markets:
•
Futures:
A futures contract is a standardized contract to
    buy or sell a specified quantity of an underlying asset during a
    particular month.
•
Options:
An option is a contract that conveys to the
    buyer the right, but not the obligation, to call (buy) or
    put (sell) an underlying futures contract at a price
    determined at the time of execution of the option.
Our IPE Brent Crude futures contract is a benchmark contract
relied upon by certain large oil producing nations to price
their crude oil. In 2004, on an average trading day, futures
contracts for approximately 100 million barrels of Brent
Crude are traded in our markets, with an average notional daily
value of over $3.7 billion. We believe that market
participants are increasingly relying on this contract for their
risk management activities, as evidenced by steady increases in
traded volumes over the past several years.
Following our acquisition of the IPE in June 2001, we made
significant modifications to adapt our electronic trading
platform to the technical, regulatory and clearing requirements
of regulated futures and options trading. Since 2002, we have
progressively transitioned our futures markets toward electronic
trading. In November 2004, we closed the morning session for
floor-based trading in the IPE Brent Crude futures contract and
began offering trading in that contract exclusively on our
electronic platform during that session. From November 1,
2004 through February 28, 2005, electronic trading has
represented an average of 26.9% of overall IPE Brent Crude
futures trading volume.
40
The following table presents, for the periods indicated,
selected statement of income data in dollars and as a percentage
of revenues for our futures business segment:
Year Ended December 31,
2004
%
2003
%
2002
%
(dollar amounts in thousands)
Revenues:
Transaction fees, net(1):
IPE Brent Crude futures
$
32,176
57.6
%
$
28,497
58.0
%
$
22,092
57.9
%
Other futures products and options
13,323
23.9
11,463
23.3
9,445
24.8
Data services fees
6,319
11.3
6,292
12.8
5,073
13.3
Intersegment fees
353
0.6
79
0.2
—
—
Trading access fees
1,224
2.2
762
1.5
395
1.0
Other
2,465
4.4
2,080
4.2
1,140
3.0
Total revenues
55,860
100.0
49,173
100.0
38,145
100.0
Operating expenses:
Selling, general and administrative
expenses
23,823
42.6
22,681
46.1
20,809
54.6
Intersegment expenses(2)
7,530
13.5
4,735
9.6
62
0.2
Depreciation and amortization
2,415
4.3
2,117
4.3
962
2.5
Total operating expenses
33,768
60.5
29,533
60.1
21,833
57.2
Operating income
22,092
39.5
19,640
39.9
16,312
42.8
Other income, net
1,927
3.4
1,133
2.3
1,002
2.6
Income tax expense
8,407
15.1
7,270
14.8
6,060
15.9
Net income
$
15,612
27.9
%
$
13,503
27.5
%
$
11,254
29.5
%
(1)
Our transaction fees are presented net of rebates. For a
    discussion of these rebates, see "— Sources of
    Revenues — Transaction Fees". We generate
    revenues from related parties in the ordinary course of our
    business. Revenues attributable to related parties were
    $6.4 million, $5.5 million and $9.2 million for
    the years ended December 31, 2004, 2003 and 2002,
    respectively. For a discussion of our related parties, see
    note 11 in our consolidated financial statements, which are
    included elsewhere in this prospectus.
(2)
Intersegment expenses represent fees paid by our futures
    business segment for support provided by the OTC business
    segment to operate the electronic trading platform used in our
    futures business.
In our futures business segment, we earn fees from both parties
to each futures contract or option on futures contract that is
traded, based on the volume of the commodity underlying the
futures or option contract that is traded. In our futures
business, we refer to these fees as exchange fees. We derived
exchange fees of $45.5 million, $40.0 million and
$31.5 million in 2004, 2003 and 2002, respectively,
representing 42.0%, 42.6% and 25.1%, respectively, of our
consolidated revenues. A contract is a standardized quantity of
the physical commodity underlying each futures contract. For
example, the IPE Brent Crude futures contract trades in a
contract size of 1,000 net barrels, or 42,000
U.S. gallons of Brent Crude.
The following table presents the underlying commodity size per
futures and options contract traded in our futures markets as
well as the relevant standard of measure for each contract:
IPE Futures Contract
Size
Measure
IPE Brent Crude
1,000
Barrels
IPE Gas Oil
100
Metric Tonnes
IPE Natural Gas
1,000
Therms per day
IPE Electricity
1
Megawatt Hours
41
IPE Options Contract
Size
Measure
IPE Brent Crude options
1
IPE Brent futures contracts
IPE Gas Oil options
1
IPE Gas Oil futures contracts
The following table presents, for the periods indicated, trading
activity in our futures markets for commodity type based on the
total number of contracts traded:
Year Ended December 31,
2004
2003
2002
(in thousands)
Number of contracts traded:
IPE Brent Crude futures
25,458
24,013
21,493
IPE Gas Oil futures
9,356
8,430
8,156
Other(1)
727
898
792
Total
35,541
33,341
30,441
(1)
Consists primarily of IPE Natural Gas futures, IPE Brent Crude
    options and IPE Gas Oil options.
The following chart presents the futures exchange fee revenues
by contract traded in our markets for the periods presented:
42
The following table presents our average daily open interest for
our futures contracts. Open interest is the number of contracts
(long or short) that a member holds either for its own account
or on behalf of its clients. Open interest refers to the total
number of contracts that are currently open — in other
words, contracts that have been traded but not yet liquidated by
either an offsetting trade, exercise, expiration or assignment.
The level of open interest in a contract is often considered a
measure of the strength of an exchange's competitive
position in that contract. In general, the higher the level of
open interest, the greater the extent it is being used as a
hedging and risk management tool. Open interest is also a
measure of the health of a market both in terms of the number of
contracts which members and their clients continue to hold in
the particular contract and by the number of contracts held for
each contract month listed by our exchange.
Year Ended December 31,
2004
2003
2002
(in thousands)
Open Interest (in contracts):
IPE Brent Crude futures
336
299
260
IPE Gas Oil futures
164
148
191
Other(1)
35
43
54
Total
535
490
505
(1)
Consists primarily of IPE Natural Gas futures, IPE Brent Crude
    options and IPE Gas Oil options.
We charge exchange fees to the IPE's 32 clearing members
for contracts traded for their own account and for contracts
traded on behalf of their participants or local traders. As the
IPE's operations are currently centered in London, we
consider all revenues derived from exchange fees to be generated
in the United Kingdom. We also provide market data services in
our futures business segment based on trading volumes and prices
in our futures markets. Some indication of the geographical
dispersal of the IPE's external participants can be
discerned from the location of the market data terminals through
which our futures data is distributed. Of the approximately
19,000 terminals through which our futures data is distributed,
51.2% are located in Europe, 42.0% in North America and the
remaining 6.8% are located primarily in Asia.
The revenues generated in our futures business are denominated
in pounds sterling, which is the functional currency of the IPE
and related U.K. subsidiaries. We translate these revenues and
expenses into U.S. dollars using the average exchange rates
for the reporting period. Gains and losses from foreign currency
transactions are included in other income (expense) in our
consolidated statements of income. We may experience substantial
gains or losses from foreign currency transactions given the
significant operations of our futures business segment. We
record any translation adjustments in accumulated other
comprehensive income, a separate component of shareholders'
equity.
Our OTC Business Segment
Our OTC business segment consists primarily of the operation of
global OTC commodities markets on our electronic platform. We
offer market participants a wide selection of derivative
contracts, as well as contracts for physical delivery of
commodities, to satisfy their trading objectives, whether they
relate to risk management, asset allocation, ensuring physical
delivery of select commodity products, speculation or arbitrage.
A substantial portion of the trading volume in our OTC business
segment relates to approximately 15-20 highly liquid contracts
in natural gas, power and oil. In addition, we offer trading in
a wide range of complementary "niche" products that
are customized to specific market requirements and preferences.
The OTC products available for trading in our markets fall into
the following general contract types:
•
Forwards and Swaps:
Forwards are individually negotiated
    agreements between two parties to deliver a specified quantity
    of an underlying asset, on a specified date, and at a specified
    location. Swaps are financially settled derivative contracts
    through which counterparties exchange or "swap" risk
    of two different assets with differing risk and performance
    profiles.
43
•
Differentials and Spreads:
Differentials, or basis swaps,
    are contracts that allow counterparties to "swap"
    delivery (or the financial equivalent of delivery) of a
    commodity between two different delivery points. Spreads are the
    simultaneous purchase and sale of forward or swap contracts for
    different months, different commodities or different grades of
    the same commodity.
•
Options:
Options are contracts that convey to the buyer
    the right, but not the obligation, to require the seller to make
    or take delivery of a stated quantity of a specified commodity
    at a specified price.
Our most liquid and actively traded OTC markets include
contracts that can be traded bilaterally or cleared at the
participant's option. In order to provide participants with
access to centralized clearing and settlement, we launched the
industry's first cleared natural gas and global oil
contracts in the OTC markets in March 2002, followed by our
first cleared OTC power contracts in November 2003. Our
participants, representing many of the world's largest
energy companies and leading financial institutions, as well as
hedge funds, proprietary trading firms, and natural gas and
electric utilities, rely on our platform for price discovery,
hedging and risk management. Unlike the futures market, the OTC
market does not have an exchange membership structure.
Revenues in our OTC business segment are generated primarily
through commission fees earned from trades, and from the
provision of OTC market data and electronic trade confirmation
services. While we charge a monthly minimum commission fee for
access to our electronic platform, we derive a substantial
portion of our OTC revenues from commission fees paid by
participants for each trade that they execute or clear based on
the underlying commodity volume. Commission fees are payable by
each counterparty to a trade and, for bilateral trades, are
generally due within 30 days of the invoice date. We do not
risk our own capital by engaging in any trading activities or by
extending credit to market participants.
In addition to our commission fees, a participant that chooses
to clear a trade must pay a fee to LCH.Clearnet for the benefit
of clearing and another for the services of the relevant member
clearing firm, or futures commission merchant. Consistent with
our futures business, we derive no direct revenues from the
clearing process and participants pay the clearing fees directly
to LCH.Clearnet and the futures commission merchants. However,
we believe that the introduction of cleared OTC contracts has
attracted new participants to our platform, which has led to
increased liquidity in our markets. We believe that the increase
in liquidity has led to increased trading volumes in North
American natural gas and power traded in our OTC markets.
Transaction or commission fees derived from trading in cleared
OTC contracts represent an increasing percentage of our total
OTC revenues. In 2004, 2003 and 2002, these transaction fees
represented 44.5%, 13.4% and 1.4% of our total OTC revenues,
respectively, net of intersegment fees. We intend to continue to
support the introduction of these products in response to the
requirements of our participants.
Trading participants located in North America accounted for
88.9% of our OTC commission fee revenues for 2004, trading
participants located in Europe generated 6.0% of our OTC
commission fee revenues for 2004, and the remaining 5.1%
represents trading participants located primarily in Asia. We
derived commission fees for OTC trades executed on our
electronic platform of $43.5 million, $34.2 million
and $84.0 million in 2004, 2003 and 2003, respectively, or
40.2%, 36.5% and 66.9%, respectively, of our consolidated
revenues. Our OTC commission rates vary by product and are based
on the volume of the commodity underlying the contract that is
traded.
44
The following table presents, for the periods indicated,
selected statement of income (loss) data in dollars and as a
percentage of revenues for our OTC business segment:
Year Ended December 31,
2004
%
2003
%
2002
%
(dollar amounts in thousands)
Revenues(1):
Transaction fees, net(2):
North American natural gas
$
29,046
48.1
%
$
16,814
34.0
%
$
41,845
47.9
%
North American power
9,462
15.7
5,739
11.6
22,255
25.5
Global oil
3,999
6.6
8,844
17.9
14,205
16.3
Other commodities markets
1,043
1.7
2,821
5.7
5,654
6.5
Electronic trade confirmation
789
1.3
165
0.3
39
—
Order flow agreements shortfall
payments
1,068
1.8
7,091
14.4
3,259
3.7
Data services fees
3,372
5.6
1,450
2.9
68
0.1
Intersegment fees
7,530
12.5
4,735
9.6
62
0.1
Trading access fees
2,371
3.9
1,699
3.4
95
0.1
Other
1,757
2.9
29
0.1
(75
)
(0.1
)
Total revenues
60,437
100.0
49,387
100.0
87,407
100.0
Operating expenses:
Selling, general, administrative and hosting expenses
35,173
58.2
32,806
66.4
39,360
45.0
Intersegment expenses
353
0.6
79
0.2
—
—
Depreciation and amortization
14,609
24.2
17,224
34.9
13,406
15.3
Total operating expenses
50,135
83.0
50,109
101.5
52,766
60.4
Operating income (loss)
10,302
17.0
(722
)
(1.5
)
34,641
39.6
Other income (expense), net
(599
)
(1.0
)
(185
)
(0.4
)
490
0.6
Income tax expense (benefit)
3,366
5.6
(781
)
(1.6
)
11,679
13.4
Net income (loss)
$
6,337
10.5
%
$
(126
)
(0.3
)%
$
23,452
26.8
%
(1)
We generate revenues from related parties in the ordinary course
    of our business. Related party revenues were $6.5 million,
    $6.7 million and $43.6 million for the years ended
    December 31, 2004, 2003 and 2002, respectively. For a
    discussion of our related parties, see note 11 in our
    consolidated financial statements, which are included elsewhere
    in this prospectus.
(2)
Our transaction fees are presented net of rebates. See
    "— Sources of Revenues — Transaction
    Fees".
45
The following tables present, for the periods indicated, the
total volume of the underlying commodity and number of contracts
traded in our OTC markets, measured in the units indicated in
the footnotes:
Year Ended December 31,
2004
2003
2002
(in millions)
Total Volume:
North American natural gas(1)
63,935
34,257
84,302
North American power(2)
1,153
575
2,230
Global oil(3)
926
1,667
2,439
Year Ended December 31,
2004
2003
2002
(in thousands)
Number of contracts traded(4):
North American natural gas
25,574
13,703
33,721
North American power
1,700
848
3,363
Global oil
3,580
6,636
6,563
Other(5)
124
3,083
358
Total
30,978
24,270
44,005
(1)
Measured in million British thermal units, or MMBtu.
(2)
Measured in megawatt hours.
(3)
Measured in equivalent barrels of oil.
(4)
These OTC market volumes are converted into contracts based on
    the conversion ratios in the table below.
(5)
Consists of the North American emissions, North American
    weather, North American coal, North American natural gas
    liquids, European power, European gas, global precious metals
    and/or global base metals commodities markets.
The following table presents the underlying commodity size for
selected OTC contracts traded in our OTC markets as well as the
relevant standard of measure for such contracts:
OTC Contract
Size
Measure
Financial gas
2,500
MMBtu
Physical gas
2,500
MMBtu
European gas
25,000
Therms per day
East power
800
Megawatt Hours per day
West power
400
Megawatt Hours per day
Crude oil
1,000
Barrels
Refined oil
100
Barrels
Precious metals
1,000
Ounces
46
The following chart presents the OTC commission fee revenues by
commodity traded in our markets for the periods presented:
The following table presents our average daily open interest for
our cleared OTC contracts:
Year Ended
December 31,
2004
2003
2002
(in thousands)
Open Interest (in contracts):
North American gas
533
131
39
North American power
117
—
—
Global oil
28
3
—
Total
678
134
39
Our participants rely on our platform for price discovery,
hedging of physical commodities and risk management and comprise
a broad range of participant types. At December 31, 2004,
we had over 660 trading participant firms in our OTC markets.
The concentration of revenues derived in our OTC business
segment from commercial users, including merchant energy
companies, oil producers and utilities, decreased to 56.5% in
2004 from 79.4% in 2001 as a result of the entry of
non-commercial participants into the markets for energy
commodities trading. The fastest growing participant segment of
our OTC commission revenues is the financial services sector,
which includes financial institutions, hedge funds and
proprietary trading firms. The entry of these market
participants is largely the result of the availability of both
electronically traded energy commodity contracts and cleared OTC
contracts. See "Business — Our Participant
Base".
We also offer trade confirmation and market data services
through our electronic trade confirmation service and market
data business, respectively. In April 2002, we began offering
our electronic trade confirmation service for trades executed in
OTC commodity markets. We do not expect fees from this service
to be a significant source of revenues in the near term,
although we believe that the availability of electronic
47
trade confirmation attracts a broader range of market
participants to our electronic platform, and increases the
operational incentives for them to trade on our electronic
platform. In November 2002, we launched our market data business
in response to growing demand for objective, transparent and
verifiable energy market data. Through our market data
subsidiary, the 10x Group, or 10x, we generate market
information and transaction-based indices based upon data
derived from actual trades executed, and trade confirmations
issued, in our marketplace.
Intersegment
Our OTC business segment provides and supports the platform for
electronic trading in our futures business segment. We determine
the intercompany or intersegment fees to be paid by the futures
business segment for using the electronic platform based on
transfer pricing standards and independent documentation.
Intersegment fees include charges for developing, operating,
managing and supporting the platform for electronic trading in
our futures business. The intersegment fees allocated to our
futures business segment were $7.5 million,
$4.7 million and $62,000 during 2004, 2003 and 2002,
respectively. These intersegment fees have no impact on our
consolidated operating results. We expect the structure of these
intersegment fees to remain unchanged and expect that they will
continue to have no impact on our consolidated operating results.
Sources of Revenues
Our revenues are comprised of transaction fees, data services
fees, trading access fees and other revenues.
Transaction Fees
Transaction fees, including both futures exchange fees and OTC
commission fees, have accounted for, and are expected to
continue to account for, a substantial portion of our revenues.
Transaction fees consist of:
•
exchange fees earned on futures transactions;
•
commission fees earned on OTC transactions;
•
electronic confirmation fees; and
•
shortfall payments made under our order flow agreements, which
    applied through the end of 2004.
Transaction fees were $90.9 million, $81.4 million
and $118.8 million in 2004, 2003 and 2002, respectively,
and accounted for 83.9%, 86.9% and 94.7% of our consolidated
revenues for 2004, 2003 and 2002, respectively. Transaction
fees, net of intersegment fees, accounted for 82.0%, 81.4% and
82.7% of revenues generated by our futures business segment in
2004, 2003 and 2002, respectively, and accounted for 85.8%,
92.9% and 99.9% of revenues generated by our OTC business
segment in 2004, 2003 and 2002, respectively. Transaction fees,
except for shortfall payments, are recognized as revenues as
services are provided. Transaction fees in our futures business
segment are denominated in pounds sterling prior to translation
and consolidation.
In our futures business segment, we charge exchange fees to both
the buyer and the seller in each transaction. In this segment,
our exchange fees are calculated and collected by LCH.Clearnet
on our behalf. Exchange fees are based on the number of
contracts traded during each month multiplied by the commission
rate. A change to either our commission rate or to the volume of
contracts executed through our futures business directly affects
the revenues of our futures business.
Transaction fees in our futures business segment are presented
net of rebates. We have granted trade rebates to local floor
members to generate market liquidity. Under this arrangement, we
rebate a percentage of the exchange fee for contracts bought and
sold on our open-outcry trading floor on the same day for the
same price. In addition, in November 2004, we implemented a two
month fee rebate program when we transitioned the morning IPE
Brent Crude futures session exclusively to our electronic
platform. Under this program, we rebated to each member all
exchange fees paid to execute trades in IPE Brent Crude futures
contracts on our electronic platform during the morning session,
as well as exchange fees paid to execute these contracts by
certain local floor members trading on our open-outcry trading
floor during our afternoon trading session. This program
terminated on December 31, 2004. Trade rebates to local
floor members amounted to $625,000,
48
$687,000 and $562,000 in 2004, 2003 and 2002, respectively. The
rebate fees under the 2004 rebate program amounted to
$2.3 million in the aggregate for the months of November
and December 2004. While we do not currently have any plans to
adjust our commission rates, we evaluate these rates on a
regular basis.
In our OTC business segment, we charge commission fees to both
the buyer and the seller in each transaction executed on our
platform. The commission fees are based on the underlying
commodity volume of each product traded multiplied by the
commission rate for that product. We also accept transactions
that participants execute off-platform but wish to have
processed for clearing. For these transactions, we charge both
the buyer and seller, but at typically half the commission rate
for on-platform execution. We calculate and collect commission
fees from our customers directly, other than trades that are
cleared through LCH.Clearnet, for which LCH.Clearnet performs
the commission fee calculation and collection function. The
transaction fees in our OTC business segment also include fees
derived from our electronic trade confirmation service. We
charge a standard fee across all products for each trade
confirmation successfully submitted by a participant.
Changes in the volume of contracts traded on our electronic
platform and in our commission rates directly affect transaction
fees in our OTC segment. Since launching our electronic platform
in 2000, we have, in limited circumstances, adjusted our
commission rates or waived our commissions with respect to
certain products. We have, for example, waived commission fees
on our WTI oil bullet swap contracts for the period from
November 2004 through December 2005. We also reduced the
commission rate charged in our global precious metal trading in
June 2002 and continue to offer reduced commission rates. While
we do not currently have any plans to make any adjustment to our
commission rates, we continue to evaluate these rates on a
regular basis.
Transaction fees in our OTC business segment are presented net
of rebates. We rebate a portion of the commission fees paid by
certain market makers in the OTC market-maker program. In this
program, certain participants agree to make a two-sided market
(
i.e.
, posting a simultaneous bid and offer) with respect
to a particular contract at a specified price spread (the
difference between the bid and offer). The OTC fee rebates to
market makers amounted to $436,000, $283,000 and $325,000 in
2004, 2003 and 2002, respectively. The market-maker program also
includes a monthly fee that we pay to certain participants that
participate in this program. See "— Components of
Expenses — Selling, General and Administrative".
In order to build and maintain liquidity in the products traded
on our platform, we entered into order flow agreements with our
Initial Shareholders upon our formation and the Gas and Power
Firms in November 2000, in each case pursuant to which these
parties committed collectively to provide a minimum aggregate
amount of order flow. The commission rates for the Initial
Shareholders and Gas and Power Firms under the order flow
agreements were the same as the rates for all other participants
on our electronic platform. If the volume traded in any period
fell short of the agreed minimum, these parties were required to
pay us a shortfall payment based on the additional commission
revenues we would have earned had the minimum volume been met.
We also entered into order flow commitments with seven companies
during November 2001 to trade OTC European gas products on our
electronic platform. We recognized order flow shortfall revenues
of $1.1 million, $7.1 million and $3.3 million in
2004, 2003 and 2002, respectively. The order flow agreements
with our Initial Shareholders and the Gas and Power Firms
expired in 2002 and 2003, respectively, and the European gas
order flow agreements expired in 2004. For a discussion of our
order flow agreements with our Initial Shareholders and the Gas
and Power Firms, please refer to "Certain Relationships and
Related Transactions" and notes 1 and 12 to our
audited consolidated financial statements and related notes
included elsewhere in this prospectus.
We have maintained liquidity following the expiration of all of
our order flow agreements. We are currently not a party to any
order flow agreements and do not intend to enter into order flow
agreements in the future. We believe that the willingness of our
previously committed order flow providers to continue to trade
at current levels will be influenced by a variety of factors,
including prevailing conditions in the commodities markets. We
experienced a decline in our OTC global oil commission fee
revenues following the expiration of certain order flow
agreements in October 2002. While this may have been caused by a
combination of factors relating to order flow, sales and
marketing activities, market conditions and competition, we
believe that we will be able to continue to attract trading in
these markets in the future without order flow agreements.
49
The following table presents, for the periods indicated, the
commission fees that were required to be paid under the order
flow agreements and the expiration dates of these agreements.
Year Ended December 31,
2004
2003
2002
Expiration Date
(in thousands)
North American natural gas and power
$
—
$
6,000
$
12,000
June 2003
Global oil
—
—
7,692
October 2002
Global precious metals
—
—
401
August 2002
European gas
1,075
1,303
2,691
December 2004
Total commission fees
$
1,075
$
7,303
$
22,784
Data Services Fees
We generate data services fees in both our futures and OTC
business segments. Data services fees were $9.7 million,
$7.7 million and $5.1 million in 2004, 2003 and 2002,
respectively.
In our futures business segment, data services fees consist of
terminal fees and license fees that we receive from data vendors
in exchange for the provision of real-time price information
generated in our futures markets. We invoice these data vendors
monthly for terminal fees based on the number of terminals that
carry our futures market data. Each data vendor also pays an
annual license fee to us. Annual license fee revenues are
deferred and amortized ratably over the period to which they
relate.
In our OTC business segment, data services fees consist of
subscription fees that we receive from market participants that
subscribe to our data services through 10x. 10x has an exclusive
license to use our OTC market data and publishes the 10x End of
Day report on a monthly basis, as well as Market Price
Validation curves, which are available to subscribers for a
monthly subscription fee. 10x also markets real-time view only
screen access to OTC markets and charges subscribers a fee that
varies depending on the number of users and the markets accessed
at each subscribing company. We invoice view only subscribers
either on a monthly or annual basis. The revenues we receive
from data services fees are deferred and amortized ratably over
the period to which they relate.
Trading Access Fees
Trading access fees are revenues generated from membership and
system user fees charged to our futures exchange members and
from minimum monthly commission fees charged to our OTC
participants. We recorded trading access fees of
$3.6 million, $2.5 million and $490,000 in 2004, 2003
and 2002, respectively.
In our futures business, we generate revenue from IPE members
from, among other things, annual membership and subscription
fees and system user fees to IPE members who access our
electronic platform. We recorded annual fees related to futures
exchange membership, subscription fees and system user fees of
$1.2 million, $762,000 and $395,000 in 2004, 2003 and 2002,
respectively. We defer revenues derived from membership and
subscription fees and amortize them ratably over the period to
which they relate. We recognize revenues derived from system
user fees as services are provided.
In our OTC business segment, we charge monthly minimum
commission fees to participants that are registered to trade OTC
natural gas and power products on our electronic platform. For
participants that are not active traders, the minimum commission
fees are based on their historic trading activity and the number
of users the participant firm has registered to trade on our
platform. We recognize the difference between the monthly
minimum commission fee for a given participant and the actual
amount of commission fees generated by such participant for
trading activity in that month as minimum commission trading
access revenues. As of December 2004, of the
661 participant trading firms that had trading access to
our platform, 211 participants were required to pay monthly
minimum commission fees. From these participants, we recognized
$2.4 million, $1.7 million and $95,000 in minimum
commission trading access revenues during 2004, 2003 and 2002,
respectively, relating to minimum commission trading shortfalls.
50
Other Revenues
Other revenues primarily relate to revenues generated from
training seminars, communication charges and equipment rentals,
and licensing, service and technology development fees charged
to CCX. We generated $4.2 million, $2.1 million and
$1.1 million in other revenues in 2004, 2003 and 2002,
respectively. We recognize revenues generated from training
seminars and communication charges and equipment rentals as
services are provided. We charge equipment rentals in advance
and amortize the fee over the period to which it relates. We
have been contracted to provide, design and service an
electronic futures and OTC trading platform on behalf of CCX.
CCX is a self-regulated exchange that administers a voluntary
multi-sector greenhouse gas reduction and trading program for
North America. We invoice CCX for license and service fees
monthly in advance of the period to which they apply. We
recognize these fees as revenues as the services are provided,
and we recognize technology development fees as revenues when
the development work is completed and accepted by CCX. Our
arrangement with CCX began in July 2003, and we recognized
revenues of $1.7 million and $605,000 in 2004 and 2003,
respectively, pursuant to our contractual relationship. For a
discussion of this arrangement, see "Certain Relationships
and Related Transactions".
Components of Expenses
Cost of Hosting
Cost of hosting primarily consists of hosting and participant
network expenses. Cost of hosting expenses were
$1.3 million, $1.7 million and $4.0 million in
2004, 2003 and 2002, respectively. Our hosting expenses include
the amounts we pay for the physical facilities, maintenance and
other variable costs associated with securely housing the
hardware used to operate our electronic platform, as well as our
redundant disaster recovery facility. Our participant network
expenses include the amounts we pay to provide a participant
with direct connectivity to our platform. Because our
Internet-based electronic platform is highly scalable, we
anticipate that the cost of hosting will remain relatively
constant in the near term, even though we believe that we will
continue to increase the number of participants trading on our
electronic platform. Prior to 2003, we used a private network
connection that did not have the scalability and cost efficiency
associated with our current Internet-based platform. In
addition, in early 2003, we began to maintain and support our
information security system with internal resources. Prior to
2003, we outsourced our information security to a nationally
recognized encryption technology company. By changing certain
vendors and by transitioning our participant base to our
Internet browser for access to our electronic platform, we have
been able to reduce our participant network expenses while
improving system performance, resulting in faster execution and
increased system availability.
Compensation and Benefits
Compensation and benefits expenses primarily consist of
salaries, bonuses, payroll taxes, employer-provided medical and
other benefit plan costs and recruiting costs. Compensation and
benefits expenses were $30.1 million, $26.2 million
and $27.9 million in 2004, 2003 and 2002, respectively.
Substantially all of our employees are full-time employees. We
capitalized and recorded as property and equipment a portion of
our compensation and benefits costs for technology employees
engaged in software development and enhancement to our
electronic platform. We expect that our compensation and
benefits expense will remain consistent with current levels as a
percentage of total revenues due to additional employees
associated with the growth of our business, partially offset by
a reduction in our headcount due to the closure of our
open-outcry trading floor.
Professional Services
Professional services expenses primarily consist of outside
legal, accounting and other professional and consulting services
expenses. Professional expenses were $14.5 million,
$15.1 million and $15.9 million in 2004, 2003 and
2002, respectively. We capitalized and recorded as property and
equipment a portion of the costs associated with fees for
technology consultants engaged in software development and
enhancements to our electronic platform. We expensed the
remaining portion of these fees in the month in which they were
incurred. We engaged a number of consultants in our futures
business segment to facilitate ongoing technology development,
maintenance and support work in connection with the migration of
trading of our futures contracts to our electronic platform and
the support of the legacy systems used in the operation of the
51
exchange floor. We reduced the number of consultants in our
futures business segment during 2004 following the substantial
completion of development relating to futures trading on our
electronic platform and due to the replacement of consultants
with permanent staff over the course of 2004.
We incurred substantial accounting and legal fees in connection
with external and internal audit functions, the regulatory and
disciplinary functions of our futures markets, the negotiation
of new clearing agreements with LCH.Clearnet and the ongoing
legal fees associated with the NYMEX and EBS copyright and
patent infringement litigation. As a public company, we will be
subject to the requirements of the Sarbanes-Oxley Act of 2002,
which may require us to incur significant expenditures in the
near term to establish systems and hire and train personnel to
comply with these requirements. In addition, as a public
company, we expect to incur additional costs for external
advisors such as legal, accounting and auditing fees, as well as
additional marketing and investor relations expenses. Even with
these additional public company expenses, we anticipate that
professional services expenses will decrease in the current and
future periods due to the reduction in consultants at the IPE
and the reduction in legal fees at the conclusion of the NYMEX
and EBS cases.
Selling, General and Administrative
Selling, general and administrative expenses were
$13.1 million, $12.4 million and $12.4 million in
2004, 2003 and 2002, respectively. Rent and occupancy expenses
and marketing and market-maker expenses are the two major
expense categories in selling, general and administrative
expenses in 2004, 2003 and 2002.
Rent and Occupancy Expenses.
Rent and occupancy expenses
were $4.1 million, $3.8 million and $3.2 million
in 2004, 2003 and 2002, respectively. We currently lease office
space in Atlanta, New York, Houston, Chicago, London, Singapore
and Calgary. Our rent costs consist primarily of rent expense
for these properties. See "Business —
Property" for a discussion on our rental properties. Our
occupancy expenses primarily relate to the use of electricity,
telephone lines and other miscellaneous operating costs. As a
result of our recent decision to close our open-outcry trading
floor on April 7, 2005, we expect our rent and occupancy
expenses will decrease in future periods.
Marketing and Market-Maker Expenses.
Marketing and
market-maker expenses were $1.6 million, $1.2 million
and $1.4 million during 2004, 2003 and 2002, respectively.
Marketing expenses primarily consist of advertising, public
relations and product promotion campaigns used to promote brand
awareness as well as new and existing products and services.
These expenses also include our participation in seminars, trade
shows, conferences and other industry events. The level of
marketing activity, and thus the amount of related expenses, may
vary from period to period based upon management's
discretion and available opportunities.
Market-maker expenses include fees we incur under our
market-maker program. Under this program, we allow certain
participants to execute trades on our platform at no charge and,
beginning in 2004, paid them a monthly fee in exchange for their
commitment to make markets on our platform within a specified
price range for specific commodity markets. We recognized
$778,000 in market-maker expenses in 2004. Such amounts are
treated as expenses as we receive no fees from these market
makers. As of February 2005, we maintained market-maker programs
only in OTC oil bullet swaps.
Other.
Other costs include all selling, general and
administrative costs not included in separate expense categories
and primarily consist of insurance expense, hardware and
software support expense, telephone and communications expense,
corporate insurance expense, travel expense, meals and
entertainment expense and dues, subscriptions and registration
expense. We expect our selling, general and administrative
expenses to increase slightly in absolute terms in future
periods in connection with the growth of our business, partially
offset by lower selling, general and administrative costs
associated with closure of our open-outcry trading floor. As a
percentage of total revenues, our selling, general and
administrative expenses may decrease in future periods due to
higher revenue growth.
Depreciation and Amortization
Depreciation and amortization expenses were $17.0 million,
$19.3 million and $14.4 million in 2004, 2003 and
2002, respectively. We depreciate and/or amortize costs related
to our property and equipment, including computer and network
equipment, software and internally developed software, office
furniture and equipment and leasehold improvements. We compute
depreciation expense using the straight-line method based on
52
estimated useful lives of the assets, or in the case of
leasehold improvements, the shorter of the lease term or the
estimated useful life of the assets, which range from three to
seven years. Gains on disposal of property and equipment are
included in other income, losses on disposals of property and
equipment are included in depreciation expense and maintenance
and repairs are expensed as incurred. In accordance with
SFAS No. 142, beginning in 2002, we ceased amortizing
goodwill and intangible assets with indefinite lives. We
continue to amortize intangible assets with contractual or
finite useful lives, in each case over the estimated useful life
of five years.
We capitalize costs, both internal and external, direct and
incremental, related to software developed or obtained for
internal use in accordance with AICPA Statement of Position
98-1,
Accounting for Costs of Computer Software Developed or
Obtained for Internal Use
. Costs incurred in the application
development phase are capitalized and amortized over the useful
life of the software, for a period not to exceed three years.
We amortize the licensing fees we pay to eSpeed for a
non-exclusive license to use its patent related to an automated
futures trading system in the United States over the period to
which the license fees relate. We recognized $2.0 million,
$2.0 million and $1.5 million of such amortization
expense in 2004, 2003 and 2002, respectively. This patent
expires in February 2007.
We anticipate that depreciation and amortization expenses will
decrease in the current and future periods due to certain
property and equipment purchased in prior years becoming fully
depreciated, the expiration of the eSpeed patent in February
2007 and lower computer hardware costs in the future due to
declining costs of technology.
Other Income (Expense)
We had other income of $1.3 million, $949,000 and
$1.5 million in 2004, 2003 and 2002, respectively. Other
income (expense) consists primarily of interest income and
expense, as well as gains and losses on currency transactions.
In our OTC business segment, we generate interest income from
the investment of our cash and cash equivalents, short-term
investments, restricted cash and restricted short-term
investments. Our OTC business segment strategy is to invest
excess cash in short-term AAA-rated securities. In our futures
business segment, we earn interest income on excess cash
balances that primarily relate to money market deposits in the
United Kingdom. Our futures business segment policy is to invest
two-thirds of all our cash funds at no more than six banks with
an IBCA credit rating of AAA or AA+, with no more than 50% at
any one bank. Under this policy, the remaining one-third of all
cash funds may be invested at no more than three additional
banks with an IBCA rating of AA or above.
Interest expense currently consists of interest from capitalized
leases and interest on outstanding indebtedness under our
revolving credit facility. Prior to repayment in November 2002,
we also incurred interest expense on the related-parties notes
payable.
Other income (expense) also relates to gains and losses
from foreign currency transactions, such as those resulting from
the settlement of foreign receivables or payables or cash
accounts held in U.S. dollars by our U.K. subsidiaries. We
seek to manage our foreign exchange translation risk and
exposure in part through converting our U.K. subsidiaries'
cash to investments denominated in U.S. dollars. However,
because the functional currency of our U.K. subsidiaries is
pounds sterling, we are subject to transaction gains and losses
for the re-measurement of the U.S. dollar cash investments
held by our U.K. subsidiaries due to foreign currency exchange
rate fluctuations between periods.
Provision for Income Taxes
We incurred income tax expenses of $11.8 million,
$6.5 million and $17.7 million in 2004, 2003 and 2002,
respectively. Our provision for income taxes consists of current
and deferred tax provisions relating to federal, state and local
taxes, as well as taxes related to foreign subsidiaries. We file
a consolidated United States federal income tax return and file
state income tax returns on a separate, combined or consolidated
basis in accordance with relevant state laws and regulations.
Our foreign subsidiaries are based in the United Kingdom and we
file separate local country income tax returns and take
advantage of the United Kingdom's group relief provisions
when applicable. The difference between our actual income tax
rate and our effective tax rate for a
53
given fiscal period is primarily a reflection of the tax effects
of our foreign operations, general business and tax credits,
state income taxes and the non-deductibility of certain
expenses. We have made provisions for U.S. income taxes on
all undistributed earnings of our foreign subsidiaries as such
earnings are not expected to be permanently reinvested.
Results of Operations
Year Ended December 31,
2004
2003
2002
(in thousands, except for share and per share data)
Consolidated Statement of Income Data
Revenues:(1)
Transaction fees, net(2)
$
90,906
$
81,434
$
118,794
Data services fees
9,691
7,742
5,141
Trading access fees
3,595
2,461
490
Other
4,222
2,109
1,065
Total revenues
108,414
93,746
125,490
Operating expenses:
Cost of hosting
1,279
1,715
3,962
Compensation and benefits
30,074
26,236
27,906
Professional services
14,523
15,138
15,876
Selling, general and administrative
13,120
12,398
12,425
Depreciation and amortization
17,024
19,341
14,368
Total operating expenses
76,020
74,828
74,537
Operating income
32,394
18,918
50,953
Total other income, net
1,328
948
1,492
Income before income taxes
33,722
19,866
52,445
Income tax expense
11,773
6,489
17,739
Net income
$
21,949
$
13,377
$
34,706
Deduction for accretion of redeemable common stock(3)
—
(1,768
)
(3,656
)
Net income available to common shareholders
$
21,949
$
11,609
$
31,050
Earnings per common share:
Basic and Diluted
$
0.10
$
0.05
$
0.14
Weighted average common shares outstanding:
Basic
211,460,434
217,315,866
217,570,408
Diluted
212,248,312
218,558,834
219,400,380
(1)
We generate revenues from related parties in the ordinary course
    of our business. For a presentation and discussion of our
    revenues attributable to related parties for the years ended
    December 31, 2004, 2003 and 2002, see our consolidated
    statements of income and note 11 in our consolidated
    financial statements that are included elsewhere in this
    prospectus.
(2)
Our transaction fees are presented net of rebates. See
    "— Sources of Revenues — Transaction
    Fees".
(3)
We recorded our Class B redeemable common stock upon its
    issuance on June 18, 2001 at its discounted present value
    of $60.2 million. We recorded charges to retained earnings
    for the accretion of this amount up to the $67.5 million
    redemption value of our Class B redeemable common stock
    over a two-year period ending in June 2003, which was the
    earliest potential redemption date.
54
Key Statistical Information
The following table presents key transaction volume information,
as well as other selected operating information, for the periods
presented. A description of how we calculate our market share,
our trading volumes and other operating measures is set forth
below.
Year Ended December 31,
2004
2003
2002
(in thousands, except for
percentages)
Operating Data:
Our Market Share of Selected Key Products:
Total crude oil futures contracts traded globally
78,477
69,450
67,173
IPE Brent Crude oil futures contracts traded
25,458
24,013
21,493
Our crude oil futures market share(1)
32.4
%
34.6
%
32.0
%
Total cleared Henry Hub natural gas contracts traded on us and
    NYMEX-ClearPort
22,308
6,869
1,170
Our cleared Henry Hub natural gas contracts traded
16,954
4,512
792
Our market share — cleared Henry Hub natural gas vs.
    NYMEX-ClearPort(2)
76.0
%
65.7
%
67.7
%
Total cleared PJM financial power contracts traded on us and
    NYMEX-ClearPort
1,256
149
—
Our cleared PJM financial power contracts traded
1,022
6
—
Our market share — cleared PJM financial power vs.
    NYMEX-ClearPort(3)
81.4
%
4.0
%
—
%
Our Average Daily Trading Fee Revenues(4):
Our futures business average daily exchange fee revenues
$
179
$
158
$
125
Our bilateral OTC business average daily commission fee revenues
80
112
330
Our cleared OTC business average daily commission fee revenues
94
24
5
Our total average daily commission fee and exchange fee revenues
$
353
$
294
$
460
Our Trading Volume(5):
Annual futures volume
35,541
33,341
30,441
Futures average daily volume
140
132
121
Annual OTC volume
30,978
24,270
44,005
OTC average daily volume
123
97
175
OTC Participants Trading Commission Percentages:
Commercial companies (including merchant energy)
56.5
%
64.1
%
81.7
%
Banks and financial institutions
22.4
%
31.3
%
18.1
%
Hedge funds, locals and proprietary trading shops
21.1
%
4.6
%
0.2
%
OTC Trading Commission fees:
Percentage of commission fees by the top 20 customers
64.8
%
69.3
%
75.6
%
Percentage of commission fees by our shareholders
25.1
%
40.4
%
61.2
%
(1)
Our crude oil futures market share is calculated based on the
    number of IPE Brent Crude futures contracts traded as compared
    to the total number of IPE Brent Crude futures contracts and
    NYMEX Light Sweet Crude and Dublin Brent Crude futures contracts
    traded.
(2)
Our cleared Henry Hub natural gas market share versus
    NYMEX-ClearPort is calculated based on the number of
    IntercontinentalExchange cleared Henry Hub natural gas contracts
    traded as a percentage of the total IntercontinentalExchange
    cleared Henry Hub natural gas contracts and NYMEX-ClearPort
    Henry Hub natural gas futures contracts traded.
(3)
Our cleared PJM financial power market share versus
    NYMEX-ClearPort is calculated based on the number of
    IntercontinentalExchange cleared PJM financial power contracts
    traded as a percentage of the total IntercontinentalExchange
    cleared PJM financial power contracts and NYMEX-ClearPort
    cleared PJM financial power contracts traded. PJM refers to the
    Pennsylvania, New Jersey and Maryland power hub. The
    NYMEX-ClearPort cleared PJM financial power contract was
    launched in April 2003 and our PJM financial power contract
    was launched in November 2003. Data regarding the volumes of
    NYMEX-ClearPort cleared PJM for annual contracts traded is
    derived from the Futures Industry Association.
(4)
Represents the total commission fee and exchange fee revenues
    for the year divided by the number of trading days during that
    year.
(5)
Represents the total volume, in contracts, for the year divided
    by the number of trading days during that year.
55
For purposes of our operating data, we calculate our volumes
based on the number of contracts traded in our markets, or based
on the number of round turn trades. Each "round turn"
represents a matched buy and sell order of one contract. Each
side to a contract is matched and treated as one contract and
each side is not separately calculated. The volume of contracts
traded in a given market is a widely recognized indicator of the
liquidity in that market, including our markets.
Year Ended December 31, 2004 Compared to Year Ended
    December 31, 2003
Overview
Consolidated net income increased $8.6 million, or 64.1%,
to $21.9 million in 2004 from $13.4 million in 2003.
During this period, net income from our futures business segment
increased $2.1 million, or 15.6%, to $15.6 million in
2004 from $13.5 million in 2003 and net income from our OTC
business segment increased to $6.3 million in 2004 from a
net loss of $126,000 in 2003. Consolidated operating income, as
a percentage of consolidated revenues, increased to 29.9% in
2004 from 20.2% in 2003. Consolidated net income, as a
percentage of consolidated revenues, increased to 20.2% in 2004
from 14.3% in 2003.
Our consolidated revenues grew by $14.7 million, or 15.6%,
to $108.4 million in 2004 from $93.7 million in 2003.
This increase is attributable to increased trading volumes on
our electronic platform and increased non-transaction revenues,
including data services fees, trading access fees and CCX
licensing, service and development fees. A significant factor
driving our revenues and volume growth during this period was
the growth in trading volumes of our cleared OTC contracts.
Consolidated operating expenses increased slightly to
$76.0 million in 2004 from $74.8 million in 2003,
representing an increase of 1.6%, compared to a 15.6% increase
in consolidated revenues during the same period. Given the fixed
nature of our operating expenses, we generally have been able to
increase revenues through increased trading volumes while
holding operating expenses relatively constant. This operating
leverage has resulted in improved profitability and we believe
is one of the key benefits of operating our electronic platform.
Revenues
Transaction Fees
Consolidated transaction fees increased $9.5 million, or
11.6%, to $90.9 million in 2004 from $81.4 million in
2003. Transaction fees, as a percentage of consolidated
revenues, decreased to 83.9% in 2004 from 86.9% in 2003.
Transaction fees generated in our futures business segment
increased $5.5 million, or 13.9%, to $45.5 million in
2004 from $40.0 million in 2003, while declining slightly
as a percentage of consolidated revenues to 42.0% in 2004 from
42.6% in 2003. The absolute increase in transaction fees was
primarily due to increased trading volumes and an increase in
the pounds sterling to U.S. dollar exchange rate, partially
offset by $2.3 million in fees rebated in November and
December 2004 as part of our rebate program for IPE Brent Crude
futures contracts traded electronically. Volumes in our futures
business segment increased 6.6%, to 35.5 million contracts
traded in 2004 from 33.3 million contracts traded in 2003.
The average exchange rate of pounds sterling to the
U.S. dollar increased 12.0%, to 1.8296 in 2004 from 1.6341
in 2003.
Transaction fees generated in our OTC business segment increased
$3.9 million, or 9.5%, to $45.4 million in 2004 from
$41.5 million in 2003, primarily due to increased trading
volumes, which was partially offset by a reduction in our order
flow shortfall payments. Transaction fees in this segment, as a
percentage of consolidated revenues, decreased to 41.9% in 2004
from 44.2% in 2003. The number of transactions or trades
executed in our OTC business segment increased by 55.1% to
1,061,629 trades in 2004 from 684,495 trades in 2003. The
increase in trades was partially offset by a 29.4% decrease in
the average revenues per transaction in 2004 as compared to
2003. The decline in average revenues per transaction was due in
part to an increased number of lower volume transactions,
primarily as a result of newer market participants generally
trading in smaller contract sizes, and a change in the mix of
contracts traded, with a larger number of contracts traded
related to commodities with lower commission rates. Increased
volumes in our OTC business segment were
56
primarily due to increased trading volumes in North American
natural gas and power markets as a result of the availability of
cleared OTC contracts and the improvement in credit quality in
the merchant energy sector, as well as increased liquidity
brought by new market participants. Transaction fees generated
by trading in North American natural gas contracts increased
$12.2 million, or 72.7%, to $29.0 million in 2004 from
$16.8 million in 2003. In addition, transaction fees
generated by trading in North American power contracts increased
$3.7 million, or 64.9%, to $9.5 million in 2004 from
$5.7 million in 2003. The continued growth in trading
volumes in cleared OTC contracts can be attributed to the
following trends:
•
The use of cleared OTC contracts eliminates the need for a
    counterparty to post capital against each trade and also reduces
    requirements for entering into multiple negotiated bilateral
    settlement agreements to enable trading with other
    counterparties. We believe that the introduction of cleared
    contracts has facilitated trading by market participants that
    otherwise would not have engaged in trading in energy
    derivatives.
•
The increase in participants in the markets for energy
    commodities trading has increased overall liquidity in our
    markets, particularly the liquidity of cleared North American
    natural gas and power contracts.
The increase in transaction fees generated by trading in OTC
North American natural gas and power contracts was partially
offset by a decrease in transaction fees generated by our OTC
global oil contracts. Transaction fees derived from trading in
global oil contracts decreased $4.8 million, or 54.8%, to
$4.0 million in 2004 from $8.8 million in 2003. This
decrease is attributable to several factors, including the
expiration of order flow agreements in late 2002, the effect of
which manifested itself in 2003 and 2004, sales and marketing
approaches, competition and specific differences in trading in
the global oil market compared to the North American natural gas
and power markets.
Revenues derived from order flow shortfall payments in our OTC
business segment decreased $6.0 million, or 84.9%, to
$1.1 million in 2004 from $7.1 million in 2003. This
decrease was due to a $6.4 million shortfall payment
recognized from the Gas and Power Firms in 2003, partially
offset by an increase of $365,000 in the 2004 European gas
shortfall payments as compared to 2003 European gas shortfall
payments. Consolidated order flow shortfall payments, as a
percentage of consolidated revenues, decreased to 1.0% in 2004
from 7.6% in 2003. These agreements are no longer in effect.
Revenues derived from electronic trade confirmation fees in our
OTC business segment increased 378.3% from 2003 to 2004. During
2004, 199,290 trades were matched through our electronic trade
confirmation service, compared to 64,383 trades in 2003.
Consolidated electronic trade confirmation fees, as a percentage
of consolidated revenues, increased to 0.7% in 2004 from 0.2% in
2003.
Data Services Fees
Consolidated data services fees increased $1.9 million, or
25.2%, to $9.7 million in 2004 from $7.7 million in
2003. This increase was primarily due to increased data services
fees in our OTC business segment related to fees from 10x view
only screen access and End of Day reports, which we introduced
in November 2002. The number of individual subscribers for 10x
view only screen access increased to 272 as of December 31,
2004 from 193 as of December 31, 2003. We continued to
enroll new monthly subscribers for these services. In March
2004, we also launched a data service known as MPV, which
provides monthly price validation curves, and 21 companies
subscribed to this service as of December 31, 2004.
Consolidated data services fees, as a percentage of consolidated
revenues, increased to 8.9% in 2004 from 8.3% in 2003.
Trading Access Fees
Consolidated trading access fees increased $1.1 million, or
46.1%, to $3.6 million in 2004 from $2.5 million in
2003. This increase was primarily due to increased monthly
minimum commission fees received in our OTC business segment.
The monthly weighted-average number of participants required to
pay monthly minimum commission fees increased to 212 in 2004
from 143 in 2003. We continued to increase both the number of
participants subject to monthly minimum commission fees as well
as the number of users
57
accessing the platform at these participants. During 2004 and
2003, we received $2.4 million and $1.7 million,
respectively, in monthly minimum commission fees in our OTC
business segment and $1.2 million and $762,000,
respectively, in membership subscriptions and system user fees
in our futures business segment. Consolidated trading access
fees, as a percentage of consolidated revenues, increased to
3.3% in 2004 from 2.6% in 2003.
Other Revenue
Consolidated other revenues increased $2.1 million, or
100.2%, to $4.2 million in 2004 from $2.1 million in
2003. This increase was primarily due to increased licensing,
service and technology development fees charged to CCX and
increased communication charges in our futures business segment.
Consolidated other revenues, as a percentage of consolidated
revenues, increased to 3.9% in 2004 from 2.2% in 2003.
Expenses
Cost of Hosting
Consolidated cost of hosting expenses decreased $436,000, or
25.4%, to $1.3 million in 2004 from $1.7 million in
2003, primarily due to reduced costs associated with our move to
an Internet-based platform from a private network connection in
early 2003. During 2004, we paid $1.2 million for hosting
expenses and $76,000 for participant network expenses, compared
to $1.3 million for hosting expenses, $268,000 for
participant network expenses and $111,000 for security services
expenses in 2003. Consolidated cost of hosting expenses, as a
percentage of consolidated revenues, decreased to 1.2% in 2004
from 1.8% in 2003.
Compensation and Benefits
Consolidated compensation and benefits expenses increased
$3.8 million, or 14.6%, to $30.1 million in 2004 from
$26.2 million in 2003. This increase was primarily due to
the increase in our employee headcount and an increase in our
discretionary bonus payments. Our discretionary bonus payments
increased primarily due to improved operating results in 2004 as
compared to 2003 and an increased number of employees receiving
a bonus in 2004. As of December 31, 2004, we had
200 employees, compared to 186 employees as of
December 31, 2003. Consolidated compensation and benefits
expenses, as a percentage of consolidated revenues, decreased to
27.7% in 2004 from 28.0% in 2003.
Professional Services
Consolidated professional services expenses decreased $615,000,
or 4.1%, to $14.5 million in 2004 from $15.1 million
in 2003. This decrease was primarily due to the renegotiation of
a major vendor consulting contract in 2004 that substantially
reduced fees incurred in our futures business segment, as well
as to the replacement of contractors with permanent staff over
the course of 2004. These reduced professional services expenses
were partially offset by an increase in legal fees primarily
related to ongoing litigation with NYMEX and EBS. Consolidated
professional services expenses, as a percentage of consolidated
revenues, decreased to 13.4% in 2004 from 16.1% in 2003.
Selling, General and Administrative
Consolidated selling, general and administrative expenses
increased $722,000, or 5.8%, to $13.1 million in 2004 from
$12.4 million in 2003. This increase was due to the
market-maker program that we initiated during 2004. Consolidated
selling, general and administrative expenses, as a percentage of
consolidated revenues, decreased to 12.1% in 2004 from 13.2% in
2003.
Depreciation and Amortization
Consolidated depreciation and amortization expenses decreased
$2.3 million, or 12.0%, to $17.0 million in 2004 from
$19.3 million in 2003. This decrease was due to certain
property and equipment purchased in 2000 and 2001 with estimated
useful lives of three years becoming fully depreciated over the
course of 2003 and
58
2004, as well as to our decision to extend the useful lives of
certain of our property and equipment during 2004. In the first
quarter of 2004, we extended the remaining estimated useful
lives of various computer hardware property and equipment to
December 2005. The majority of these assets had estimated useful
lives that ended in March 2005. The decision to increase the
estimated useful lives of these assets was based on internal
analysis that indicated that the useful lives of these assets
would extend beyond the original estimate of three years. The
original three year life was based on information available in
2002. However, given our limited operating history, the
information available in 2002 did not include prior experience
of the useful lives of this property and equipment to include in
our initial estimate. The change in estimated useful lives had
the impact of delaying the recognition of $676,000 of
depreciation expense from 2004 to 2005. We will continue to
review the remaining estimated useful lives of our property and
equipment and will make adjustments whenever events or changes
in circumstances indicate that the remaining useful life of an
asset has changed. Consolidated depreciation and amortization
expenses, as a percentage of consolidated revenues, decreased to
15.7% in 2004 from 20.6% in 2003.
Other Income (Expense)
Consolidated other income increased $380,000, or 40.0%, to
$1.3 million in 2004 from $949,000 in 2003. This increase
primarily related to an increase of $1.2 million in
interest income, partially offset by an increase of $754,000 in
foreign currency transaction losses. The increase in interest
income was primarily due to the increase in the cash balances in
2004 compared to 2003, as well as to our cash earning a higher
return in 2004 compared to 2003. The average monthly ending cash
balance in 2004, including cash and cash equivalents, short-term
investments, restricted cash and restricted short-term
investments, was $100.7 million, compared to
$78.4 million in 2003. Our average interest rate in 2004
was 2.9%, compared to 2.2% in 2003.
The foreign currency transaction losses primarily related to the
revaluation of the U.S. dollar cash balances held by our
foreign subsidiaries due to the increase in the period-end
foreign currency exchange rates during 2004. The functional
currency of our foreign subsidiaries is pounds sterling. Foreign
currency transaction losses increased to $1.4 million in
2004 from $644,000 in 2003. The year-end foreign currency
exchange rate of pounds sterling to the U.S. dollar
increased 7.4% to 1.9160 as of December 31, 2004 from
1.7846 as of December 31, 2003. As of December 31,
2004, our foreign subsidiaries held $20.6 million in
U.S. dollar denominated cash balances, compared to
$4.7 million as of December 31, 2003.
Income Taxes
Consolidated tax expense increased $5.3 million, or 81.4%,
to $11.8 million in 2004 from $6.5 million in 2003
primarily due to the increase in our pre-tax income. Our
effective tax rate increased to 34.9% in 2004 from 32.7% in
2003. The 2004 and 2003 effective tax rates are lower than the
statutory rate primarily due to the impact of tax credits, which
were partially offset by state income taxes. The increase in the
effective tax rate from 2003 to 2004 was primarily due to lower
tax credits taken in 2004 and higher state income taxes in 2004.
Year Ended December 31, 2003 Compared to Year Ended
December 31, 2002
Overview
Consolidated net income decreased $21.3 million, or 61.5%,
to $13.4 million in 2003 from $34.7 million in 2002.
During this period, net income for our futures business segment
increased $2.2 million, or 20.0%, to $13.5 million in
2003 from $11.3 million in 2002, and we incurred a net loss
for our OTC business segment of $126,000 in 2003 versus net
income of $23.5 million in 2002. Consolidated operating
income, as a percentage of revenues, decreased to 20.2% in 2003
from 40.6% in 2002. Consolidated net income, as a percentage of
consolidated revenues, decreased to 14.3% in 2003 from 27.7% in
2002.
Our consolidated revenues decreased $31.7 million, or
25.3%, to $93.7 million in 2003 from $125.5 million in
2002. This decrease was primarily the result of decreased
trading volumes on our electronic platform as trading volumes in
the North American OTC energy market significantly declined due
to the business
59
environment. Consolidated operating expenses remained relatively
flat at $74.8 million in 2003, compared to
$74.5 million in 2002.
Revenues
Transaction Fees
Consolidated transaction fees decreased $37.4 million, or
31.4%, to $81.4 million in 2003 from $118.8 million in
2002. Consolidated transaction fees, as a percentage of
consolidated revenues, decreased to 86.9% in 2003 from 94.7% in
2002.
Transaction fees generated by our futures business segment
increased $8.4 million, or 26.7%, to $40.0 million in
2003 from $31.5 million in 2002. Transaction fees generated
by this segment, as a percentage of consolidated revenues,
increased to 42.6% in 2003 from 25.1% in 2002. This increase was
due to a 9.5% increase in the trading volumes in our futures
business segment, a 14.8% increase in our commission rates
instituted in May 2002, as well as an 8.4% increase in the
foreign currency exchange rate. Trading volumes in this segment
increased to 33.3 million contracts traded in 2003 from
30.4 million contracts traded in 2002. The average exchange
rate of pounds sterling to the U.S. dollar increased to
1.6341 in 2003 from 1.5071 in 2002. In May 2002, we implemented
a fee increase across all futures markets from 30.5 pence per
contract per side to 35 pence per contract per side. In June
2002, we implemented a fee increase in respect of Exchange for
Physical, or EFP, and Exchange for Swap, or EFS, transactions
from 35 pence per contract per side to 60 pence per
contract per side. EFP and EFS are trades that occur off
exchange and are blocked into our futures business segment.
Transaction fees generated by our OTC business segment decreased
$45.8 million, or 52.5%, to $41.5 million in 2003 from
$87.3 million in 2002, primarily due to decreased trading
volumes on our electronic platform, partially offset by an
increase in our order flow shortfall payments. Transaction fees
generated by our OTC business segment, as a percentage of
consolidated revenues, decreased to 44.2% in 2003 from 69.5% in
2002. Transaction fees derived from trading in North American
natural gas contracts decreased $25.0 million, or 59.8%, to
$16.8 million in 2003 from $41.8 million in 2002,
North American power contracts decreased $16.5 million, or
74.2%, to $5.7 million in 2003 from $22.3 million in
2002 and global oil contracts decreased $5.4 million, or
37.7%, to $8.8 million in 2003 from $14.2 million in
2002. The number of transactions executed in our OTC business
segment decreased 29.6% to 684,495 trades in 2003 from 971,760
trades in 2002. In addition, average revenues per OTC
transaction decreased 32.5% from 2002 to 2003. The reduced
number of transactions, trading volume, revenue per trade and
associated revenues were due to several factors, including:
•
Highly publicized problems involving merchant energy companies,
    including alleged manipulative trading and price reporting
    practices, misstatements of financial results, and other
    matters, which resulted in many trading companies reducing or
    eliminating their energy trading.
•
Severely restricted credit lines for trading desks, limiting
    trading to asset-based transactions.
•
A general loss of liquidity in the broader energy market
    resulting from fewer participants and reduced trading activity.
Revenues derived from order flow shortfall payments in our OTC
business segment increased to $7.1 million in 2003 from
$3.3 million in 2002. This $3.8 million increase was
due to a $6.4 million shortfall payment from the Gas and
Power Firms recognized in 2003, partially offset by a
$2.2 million shortfall payment recognized from the Initial
Shareholders in 2002 and a decrease of $373,000 in the 2003
European gas shortfall payment as compared to the 2002 European
gas shortfall payment. Consolidated order flow shortfall
payments, as a percentage of consolidated revenues, increased to
7.6% in 2003 from 2.6% in 2002.
Revenues derived from our electronic confirmation fees increased
323.6% from 2002 to 2003. We began offering this service in
April 2002. During 2003, 64,383 trades were matched, an increase
of 109.7% compared to 30,696 trades matched in 2002.
60
Data Services Fees
Consolidated data services fees increased $2.6 million, or
50.6%, to $7.7 million in 2003 from $5.1 million in
2002. This increase was due to increased data services fees
derived from both our futures business segment and our OTC
business segment of $1.2 million and $1.4 million,
respectively. Data services fees derived from our futures
business segment increased due to changes in the foreign
currency exchange rate. 10x view only screen access and End of
Day reports were both launched in November 2002. The number of
individual subscribers to 10x view only screen access increased
to 193 as of December 31, 2003 from 75 as of
December 31, 2002. Consolidated data services fees, as a
percentage of consolidated revenues, increased to 8.3% in 2003
from 4.1% in 2002.
Trading Access Fees
Consolidated trading access fees increased to $2.5 million
in 2003 from $490,000 in 2002. This increase was primarily due
to increased monthly minimum commission fees in our OTC business
segment, which we introduced in November 2002. We initiated
minimum commission fees during the last two months of 2002.
During 2003 and 2002, we received $762,000 and $395,000,
respectively, in membership subscriptions and system user fees
in our futures business segment and $1.7 million and
$95,000, respectively, in monthly minimum commission fees in our
OTC business segment. These system user fees were introduced as
part of the addition of trading in futures contracts to our
electronic platform in 2003. Consolidated trading access fees,
as a percentage of consolidated revenues, increased to 2.6% in
2003 from 0.4% in 2002.
Other Revenue
Consolidated other revenues increased $1.0 million, or
98.1%, to $2.1 million in 2003 from $1.1 million in
2002. This increase was due to increased licensing, service and
technology development fees charged to CCX and to increased
training and communication charges in our futures business
segment. Consolidated other revenues, as a percentage of
consolidated revenues, increased to 2.2% in 2003 from 0.8% in
2002.
Expenses
Cost of Hosting
Consolidated cost of hosting expenses decreased
$2.2 million, or 56.7%, to $1.7 million in 2003 from
$4.0 million in 2002, primarily due to reduced costs
associated with the migration to an Internet-based platform from
a private network connection in early 2003. During 2003, we paid
$1.3 million in hosting expenses, $268,000 in customer
network expenses and $111,000 in security services expenses,
compared to $2.4 million in hosting expenses, $516,000 in
customer network expenses and $1.1 million in security
services expenses in 2002. Consolidated cost of hosting
expenses, as a percentage of consolidated revenues, decreased to
1.8% in 2003 from 3.2% in 2002.
Compensation and Benefits
Consolidated compensation and benefits expenses decreased
$1.7 million, or 6.0%, to $26.2 million in 2003 from
$27.9 million in 2002. This decrease was primarily due to a
reduction in our employee headcount and a reduction in our
discretionary bonus payments. As of December 31, 2003, we
had 186 employees, compared to 201 employees at
December 31, 2002. Our discretionary bonus payments
decreased primarily due to lower bonuses paid in 2003 compared
to 2002, reflecting our reduced operating results in 2003, and
fewer employees receiving a bonus in 2003 as compared to 2002.
Consolidated compensation and benefits expenses, as a percentage
of consolidated revenues, increased to 28.0% in 2003 from 22.2%
in 2002.
Professional Services
Consolidated professional services expenses decreased $737,000,
or 4.6%, to $15.1 million in 2003 from $15.9 million
in 2002. This decrease was primarily due to a $2.4 million
charge in 2002 relating to legal and accounting expenses
incurred with respect to our initial public offering that was
suspended in 2002, which was
61
partially offset by an increase in legal fees in 2003 primarily
related to our litigation with NYMEX. Consolidated professional
services expenses, as a percentage of consolidated revenues,
increased to 16.1% in 2003 from 12.7% in 2002.
Selling, General and Administrative
Consolidated selling, general and administrative expenses
remained constant at $12.4 million in 2002 and 2003.
Consolidated selling, general and administrative expenses, as a
percentage of consolidated revenues, increased to 13.2% in 2003
from 9.9% in 2002.
Depreciation and Amortization
Consolidated depreciation and amortization expenses increased
$5.0 million, or 34.6%, to $19.3 million in 2003 from
$14.4 million in 2002. This increase was due to additional
depreciation expense recorded on capital expenditures of
$1.6 million incurred in 2003 and capitalized software
development costs of $5.2 million incurred in 2003. We also
had a full year of depreciation expense recorded on the
$14.8 million in capital expenditures and $6.0 million
in capitalized software development costs incurred in 2002.
Consolidated depreciation and amortization expenses, as a
percentage of consolidated revenues, increased to 20.6% in 2003
from 11.4% in 2002.
Other Income (Expense)
Consolidated other income decreased $544,000, or 36.4%, to
$949,000 in 2003 from $1.5 million in 2002. The difference
primarily related to a decrease of $263,000 in interest income
and an increase of $602,000 in foreign currency transaction
losses, partially offset by a decrease of $320,000 in interest
expense. The decrease in interest income and interest expense
were both related to the repayment of our related-party term
loan note agreements in November 2002 for $16.5 million in
cash.
The foreign currency transaction losses related to the
re-valuation of the U.S. dollar cash balances held by our
foreign subsidiaries due to the increase in the period-end
foreign currency exchange rates during 2003. The functional
currency of our foreign subsidiaries is pounds sterling. The
foreign currency transaction losses increased to $644,000 in
2003 from $149,000 in 2002. The year-end foreign currency
exchange rate of pounds sterling to the U.S. dollar
increased 10.9%, to 1.7846 at December 31, 2003 from 1.6095
at December 31, 2002. As of December 31, 2003, our
foreign subsidiaries held $4.7 million in U.S. dollar
denominated cash balances, compared to $1.6 million as of
December 31, 2002.
Income Taxes
Consolidated tax expense decreased $11.2 million, or 63.4%,
to $6.5 million in 2003 from $17.7 million in 2002
primarily due to the decrease in our pre-tax income. Our
effective tax rate decreased to 32.7% in 2003 from 33.8% in
2002. The 2002 and 2003 effective tax rates are lower than the
statutory rate primarily due to the impact of tax credits, which
were partially offset by state income taxes.
62
Quarterly Results of Operations
The following table sets forth quarterly unaudited condensed
consolidated statements of income for the periods presented. We
believe that this data has been prepared on substantially the
same basis as our audited consolidated financial statements and
includes all adjustments, consisting only of normal recurring
adjustments, necessary for the fair presentation of our
consolidated results of operations for the quarters presented.
This unaudited condensed consolidated quarterly data should be
read together with our consolidated financial statements and
related notes included elsewhere in this prospectus. The
historical results for any quarter do not necessarily indicate
the results expected for any future period.
Three Months Ended,
December 31,
September 30,
June 30,
March 31,
December 31,
2004
2004
2004
2004
2003
(in thousands)
Revenues:
Transaction fees, net:
Futures:
Brent Crude futures
$
8,685
$
8,824
$
8,563
$
8,365
$
7,239
Other futures products and options
3,361
3,302
3,160
3,500
3,036
Two month fee rebate program
(2,261
)
—
—
—
—
OTC:
North American natural gas
8,913
8,620
6,622
4,891
4,639
North American power
2,835
2,801
2,242
1,584
1,260
Global oil
758
915
954
1,372
1,627
Other commodities markets
247
245
291
260
435
Electronic trade confirmation services
264
239
166
120
77
Order flow agreements shortfall payments
272
265
263
268
238
Data services fees
2,678
2,501
2,382
2,130
2,105
Trading access fess
969
842
859
925
755
Other
1,775
893
756
798
969
Total revenues
28,496
29,447
26,258
24,213
22,380
Operating expenses:
Cost of hosting
219
362
341
357
398
Compensation and benefits
8,401
8,455
6,674
6,544
6,509
Professional services
3,379
3,583
4,316
3,245
3,600
Selling, general and administrative
3,667
3,252
3,092
3,109
2,821
Depreciation and amortization
4,776
4,078
4,090
4,080
4,625
Total operating expenses
20,442
19,730
18,513
17,335
17,953
Operating income
8,054
9,717
7,745
6,878
4,427
Other income (expense), net
(589
)
895
679
343
122
Income tax expense
2,626
3,561
2,987
2,599
1,024
Net income
$
4,839
$
7,051
$
5,437
$
4,622
$
3,525
63
Liquidity and Capital Resources
Since our inception on May 11, 2000, we have financed our
operations, growth and cash needs primarily through income from
operations, borrowings under our related-party loan agreement
and borrowings under our revolving credit facility. Our
principal capital requirements have been to fund:
•
capital expenditures;
•
working capital;
•
strategic acquisitions; and
•
marketing and development of our electronic platform.
We may need to incur additional debt or issue additional equity
to make strategic acquisitions or investments in the future.
Cash and Cash Equivalents, Short-term Investments,
    Restricted Cash and Restricted Short-Term Investments
We had consolidated cash and cash equivalents of
$61.2 million and $44.9 million as of
December 31, 2004 and 2003, respectively. We had
$5.7 million and $12.0 million in short-term
investments as of December 31, 2004 and 2003, respectively,
and $18.4 million and $36.8 million in restricted cash
and restricted short-term investments held as of
December 31, 2004 and 2003, respectively. We consider all
short-term, highly liquid investments with original maturity
dates of three months or less at the time of purchase to be cash
equivalents. We classify all investments with original maturity
dates in excess of three months as short-term investments. We
classify all cash that is not available for general use, either
due to FSA requirements or through restrictions in specific
agreements, as restricted cash or restricted short-term
investments.
We invest a portion of our cash in excess of short-term
operating needs in U.S. AAA rated 28-day Auction Rate
Securities, or ARS. We classify these investments as
available-for-sale in accordance with Statement of Financial
Accounting Standards, or SFAS, 115,
Accounting for
Certain Investments in Debt and Equity Securities
. ARS are
instruments whose interest rates or dividends are reset
frequently, usually every seven to 49 days. The reset
mechanism occurs via a Dutch auction, wherein purchasers and
sellers submit their orders for ARS to registered
broker-dealers. The highest bid that clears the auction is the
interest rate or dividend applied to the entire issue until the
next auction date. While there is no guarantee that a sell order
will be filled, it is rare for it not to be filled due to the
high credit quality of the ARS. Even though we
purchase 28-day auction rate issues, we are required to
classify these securities as short-term investments instead of
cash and cash equivalents as the original maturity of the ARS is
in excess of three months. The ARS investments are classified as
current assets based on our intent and ability to use these
investments as necessary for short-term requirements. We had ARS
investments of $5.7 million and $12.0 million as of
December 31, 2004 and 2003, respectively, and our ARS
investments are presented as short-term investments on our
consolidated balance sheets.
We had $12.4 million and $11.9 million in restricted
cash held at the IPE as of December 31, 2004 and 2003,
respectively. The FSA requires the IPE, as an RIE, to restrict
the use of the equivalent of six months' operating
expenditures in cash or cash equivalents at all times. Our
subsidiary, IntercontinentalExchange Services (UK) Limited, or
ICE Services UK, is authorized and regulated by the FSA as an
arranger of deals in investments and as an agency broker. The
FSA requires ICE Services UK to maintain a minimum level of
financial resources, which is calculated annually on the basis
of 25% of the relevant annual expenditures, adjusted for any
illiquid assets. As of December 31, 2004 and 2003, we had
$1.0 million and $874,000, respectively, in restricted cash
held at ICE Services UK.
When we acquired the IPE in June 2001, $24.0 million of
cash collateral was pledged by certain shareholders to secure a
letter of credit issued to support our redemption obligations in
respect of our Class B redeemable common stock, which we
issued as a portion of our payment to the sellers. This cash was
held in a facility that was controlled by the Gas and Power
Firms and originally was not reflected in our consolidated
64
financial statements. In January 2003, the FASB issued
Interpretation No. 46, or FIN 46,
Consolidation of
Variable Interest Entities.
FIN 46 requires a variable
interest entity to be consolidated by a company if that company
is subject to a majority of the risk of loss from the variable
interest entity's activities or entitled to receive a
majority of the entity's residual returns or both. We
adopted FIN 46 in November 2003. Given our ability to
receive all of the variable interest entity's expected
residual losses and returns, we were considered the primary
beneficiary under FIN 46 and we were required to
consolidate the entity. The result of the adoption of
FIN 46 and the consolidation of the variable interest
entity was to increase restricted short-term investments by
$24.0 million and to increase additional paid-in capital by
$24.0 million in 2003. The letter of credit was paid and
the $24.0 million was released to the letter of credit bank
for the benefit of the holders of our Class B redeemable
common stock. We have no further obligation or interest in
respect of this arrangement.
In November 2004, we entered into a $25.0 million revolving
credit agreement with Wachovia Bank, National Association, or
Wachovia. We are required to maintain a $5.0 million money
market account with Wachovia until we have transferred our
primary domestic and international deposit accounts to Wachovia,
which will likely occur during 2005. As of December 31,
2004, this $5.0 million balance is reflected as restricted
cash.
We maintain cash and short-term investments in an amount
sufficient to meet our working capital requirements. In our OTC
business segment, in addition to the ARS described above, we
currently invest our excess cash predominantly in commercial
paper and overnight deposits that are highly liquid, are of
high-quality investment grade and have maturities of three
months or less with the intent of having these funds readily
available for operating, acquisition and strategic equity
investment purposes. In our futures business segment, we earn
interest income on our excess cash balances which primarily
relates to interest earned on money market deposits in the
United Kingdom. Our futures business policy is to invest
two-thirds of all cash funds at no more than six banks with an
IBCA credit rating of AAA or AA+, with no more than 50% in any
one bank. Under this policy, the remaining one-third of all cash
funds may be invested in no more than three additional banks
with an IBCA rating of AA or above.
Cash Flow
The following tables present, for the periods indicated, the
major components of net increases (decreases) in cash and
cash equivalents:
Year Ended December 31,
2004
2003
2002
(in thousands)
Net cash provided by (used in):
Operating activities
$
40,161
$
27,093
$
51,172
Investing activities
(4,777
)
(18,131
)
(25,209
)
Financing activities
(20,324
)
(1,324
)
(20,051
)
Effect of exchange rate changes
1,226
3,648
2,105
Net increase in cash and cash equivalents
$
16,286
$
11,286
$
8,017
Operating Activities
Consolidated net cash provided by operating activities was
$40.2 million, $27.1 million and $51.2 million in
2004, 2003 and 2002, respectively. Net cash provided by
operating activities primarily consists of net income adjusted
for certain non-cash items, including depreciation and
amortization and the effects of changes in working capital.
Fluctuations in net cash provided by operating activities are
primarily attributable to increases and decreases in our net
income between periods and, to a lesser extent, due to
fluctuations in working capital. The $13.1 million increase
in net cash provided by operating activities in 2004 from 2003
is primarily due to the $6.5 million increase in the OTC
business segment's net income in 2004 from 2003, the
increase in the futures business segment's net income and
the net increases in accrued salaries and benefits
65
and other accrued liabilities. The $24.1 million decrease
in net cash provided by operating activities in 2003 from 2002
is primarily due to the $23.6 million decrease in the OTC
business segment's net income in 2003 from 2002.
Investing Activities
Consolidated net cash used in investing activities was
$4.8 million, $18.1 million and $25.2 million in
2004, 2003 and 2002, respectively. These activities primarily
relate to capital expenditures in each period for software,
including internally developed software, and for computer and
network equipment. We incurred capitalized software development
costs of $4.8 million, $5.2 million and
$6.0 million in 2004, 2003 and 2002, respectively. We had
additional capital expenditures of $1.7 million,
$1.6 million and $14.8 million in 2004, 2003 and 2002,
respectively. The $14.8 million in capitalized expenditures
in 2002 included $10.4 million in computer network
equipment relating to the development of our electronic platform
and disaster recovery platform. We also had a net decrease
(increase) in short-term investments classified as available
for-sale of $6.5 million, ($7.9 million) and
($3.8 million) in 2004, 2003 and 2002, respectively, and a
net decrease (increase) in restricted cash of
($4.7 million), ($2.8 million) and $142,000,
respectively, due to changes in the short-term investments and
restricted cash balances between periods.
Financing Activities
Consolidated net cash used in financing activities was
$20.3 million, $1.3 million and $20.1 million in
2004, 2003 and 2002, respectively. Consolidated net cash used in
financing activities for 2004 primarily relates to
$43.5 million paid in connection with the redemption of the
Class B redeemable common stock, partially offset by
$25.0 million in cash drawn down under our revolving credit
facility. Consolidated net cash used in financing activities for
2002 primarily relates to $16.5 million in repayments of
related-party notes payable. We also had payments on capital
lease obligations, primarily related to computer and network
equipment, of $1.6 million, $1.9 million and
$3.6 million in 2004, 2003 and 2002, respectively.
We intend to use a portion of the net proceeds of this offering
to repay all amounts outstanding under our revolving credit
facility. During January 2005, $12.0 million of the
$25.0 million outstanding under that facility was repaid
using excess cash.
Loan Agreements
We entered into our revolving credit agreement with Wachovia on
November 17, 2004. Under this agreement, we may borrow an
aggregate principal amount of up to $25.0 million at any
time through November 17, 2006. The facility includes an
unused line fee that is equal to the unused maximum revolver
amount multiplied by an applicable margin rate and is payable on
a quarterly basis, which as of December 31, 2004 was 0.15%.
Loans under the Wachovia facility bear interest on the principal
amounts outstanding at LIBOR plus an applicable margin rate,
which as of December 31, 2004 was 0.85%. We have the option
to select the interest rate and interest period applicable to
any loans at the time of borrowing, which can be either a daily
LIBOR market index loan or a LIBOR rate loan with a period of
one, three or six months. Interest on each LIBOR market index
loans is payable monthly and the interest on the LIBOR rate
loans is payable on the last day of each interest period
generally.
On November 23, 2004, we borrowed the entire
$25.0 million available under the Wachovia facility to fund
a portion of the $67.5 million redemption of our
Class B redeemable common stock. As of December 31,
2004, $13.0 million was held in a six-month LIBOR rate loan
with a locked in interest rate, including the applicable margin
rate, of 3.40%. The remaining balance of $12.0 million was
held in a daily LIBOR market index loan with an interest rate at
December 31, 2004, including the applicable margin rate, of
3.25%. The $12.0 million LIBOR market index loan was repaid
in January 2005.
This facility provides for a negative pledge on all of our
assets. We pledged 65% of the stock of our foreign subsidiary
holding company in connection with this facility. The facility
also contains affirmative and negative
66
covenants including, but not limited to, cash flow leverage
ratios, minimum tangible net worth ratios and limitations or
approvals needed from Wachovia for acquisitions, external debt
and other fundamental changes to our business.
On May 11, 2000, we entered into a term loan agreement with
Goldman Sachs Credit Partners L.P., an affiliate of The Goldman
Sachs Group, Inc., and Morgan Stanley Capital Group, Inc., two
of our Initial Shareholders that are affiliated with the lead
underwriters of this offering. Under the agreement, we could
borrow an aggregate principal amount of up to $20 million
($10 million from each lender) in two term loans. We
borrowed $16.1 million under the term loan agreement in
2000 and repaid the principal balance and accrued interest of
$16.5 million in 2002. In November 2002, the term loan
agreement was cancelled and all liens were released. The loans
bore interest on the principal amounts at one-month LIBOR, with
interest compounding monthly and payable at the maturity date.
Future Capital Requirements
Our future capital requirements will depend on many factors,
including the rate of our trading volume growth, required
technology initiatives, regulatory compliance costs, the
expansion of sales and marketing activities, the timing and
introduction of new products and enhancements to existing
products, and the continuing market acceptance of our electronic
platform. We currently expect to make capital expenditures
ranging between $3.9 million and $5.8 million in 2005
and ranging between $4.1 million and $5.4 million in
2006 to support the continued expansion of our futures and OTC
businesses. We expect that these expenditures will focus on the
further expansion of our electronic futures and OTC participant
base, the expansion of distribution opportunities via the
possible acquisition of existing businesses, the addition of
products in our market data services business, and the provision
of back office service systems as well as technical improvements
to, and enhancements of, our existing systems, products and
services. We expect our capitalized software development costs
to remain relatively consistent with our 2004 software
development costs.
We believe that cash flows from operations and the net proceeds
of this offering will be sufficient to fund our working capital
needs and capital expenditure requirements at least through the
end of 2006. Our revolving credit agreement is currently the
only agreement or arrangement that we have with third parties to
provide us with sources of liquidity and capital resources
following this offering. In the event that we consummate any
strategic acquisitions or investments, or if we are required to
raise capital for any reason, we may need to incur additional
debt or issue additional equity to help raise the necessary
funds. We cannot assure you that we will be able to obtain any
such financing on acceptable terms or at all.
Off-Balance Sheet Entities
We currently do not have any relationships with unconsolidated
entities or financial partnerships, often referred to as
structured finance or special purpose entities, which have been
established for the purpose of facilitating off-balance sheet
arrangements or other contractually narrow or limited purposes.
67
Contractual Obligations and Commercial Commitments
The following tables present, for the periods indicated, our
contractual obligations (which we intend to fund from
operations) and commercial commitments as of December 31,
2004:
Payments Due by Period
Less
Than
1-3
4-5
After 5
Total
1 Year
Years
Years
Years
(in thousands)
Contractual Obligations:
Short-term debt(1)
$
12,000
$
12,000
$
—
$
—
$
—
Capital lease obligations
511
511
—
—
—
Operating leases
4,984
1,867
3,117
—
—
Long-term debt(2)
13,000
—
13,000
—
—
eSpeed licensing agreement(3)
4,000
2,000
2,000
—
—
Total contractual cash obligations
$
34,495
$
16,378
$
18,117
$
—
$
—
(1)
Short-term debt was repaid in full in January 2005.
(2)
We expect to repay long-term debt in full out of the net
    proceeds of this offering.
(3)
The eSpeed licensing agreement also includes a quarterly royalty
    payment that is based on trading volume. The royalty payments
    were $32,000 and $14,000 in 2004 and 2003, respectively, and the
    2005 through 2007 estimates have not been included in the above
    estimates.
Quantitative and Qualitative Disclosures about Market Risk
We are exposed to market risk in the ordinary course of
business. This market risk consists primarily of interest rate
risk associated with our cash and cash equivalents, short-term
investments, restricted cash and restricted short-term
investments and foreign currency exchange rate risk.
Interest Rate Risk
We have exposure to market risk for changes in interest rates
relating to our cash and cash equivalents, short-term
investments, restricted cash and restricted short-term
investments. As of December 31, 2004 and 2003, our cash and
cash equivalents, short-term investments, restricted cash and
restricted short-term investments, were $85.3 million and
$93.7 million, respectively, of which $46.0 million
and $46.5 million, respectively, were denominated in pounds
sterling. The remaining investments are denominated in
U.S. dollars. In general, our investments in the United
Kingdom earn interest at a higher rate than in the United
States. Due to the conservative nature of our investment
portfolio, which is structured with a focus on capital
preservation and is mainly comprised of short-term AAA rated
ARS, commercial paper and money market investments, we would not
expect our operating results or cash flows to be significantly
affected by changes in market interest rates. We do not use our
investment portfolio for trading or other speculative purposes.
Foreign Currency Exchange Rate Risk
We have had significant operations in the United Kingdom since
our acquisition of the IPE in 2001. The revenues, expenses and
financial results of the IPE and other U.K. subsidiaries are
denominated in pounds sterling. Pounds sterling is the
functional currency of our U.K. subsidiaries. We have foreign
currency translation risk equal to our net investment in our
subsidiaries. The financial statements of our U.K. subsidiaries
are translated into U.S. dollars using current rates of
exchange, with gains or losses included in the cumulative
translation adjustment account, a component of
shareholders' equity. As of December 31, 2004 and
2003, the portion of our shareholders' equity attributable
to accumulated other comprehensive income from foreign currency
translation was $37.0 million and $26.4 million,
respectively. The year-end foreign
68
currency exchange rate for pounds sterling to the
U.S. dollar increased from 1.6095 as of December 31,
2002 to 1.7846 as of December 31, 2003, and then to 1.9160
as of December 31, 2004.
We also have foreign currency transaction risk related to the
settlement of foreign receivables or payables that occur through
our electronic platform, including for our OTC European gas and
power markets, which are paid in pounds sterling, and for our
foreign subsidiaries cash accounts held in U.S. dollars. We
had foreign currency transaction losses of $1.4 million,
$644,000 and $149,000 in 2004, 2003 and 2002, respectively,
primarily attributable to the appreciation of pounds sterling
relative to the U.S. dollar. The average exchange rate of
pounds sterling to the U.S. dollar increased from 1.5071 in
2002 to 1.6341 in 2003, and then to 1.8296 in 2004.
We generate a significant portion of our revenues from sales to
participants located outside of the United States, principally
in the United Kingdom. Of our consolidated revenues, 46.1%,
47.1% and 33.7% were denominated in pounds sterling in 2004,
2003 and 2002, respectively. Of our consolidated operating
expenses, 44.4%, 40.0% and 29.2% were denominated in pounds
sterling in 2004, 2003 and 2002, respectively. As the pounds
sterling exchange rate changes, the U.S. equivalent of
revenues and expenses denominated in foreign currencies changes
accordingly.
All other sales in our business are denominated in
U.S. dollars, including all sales of our futures market
data generated by the IPE. Our U.K. operations in some instances
function as a natural hedge because most U.K. revenues and
operating expenses are denominated in pounds sterling. We
acquired the IPE in June 2001 and we formed four wholly-owned
U.K. subsidiary companies during 2003. We also began to offer
trading in the OTC European gas commodities market in December
2001 and in the OTC European power commodities market in May
2002. As a result, to date, our exposure to foreign currency
exchange risk has increased. This exposure will continue to
increase as we expand and introduce additional international
products on our electronic platform. The effect of an immediate
10% decline in exchange rates would result in a translation
adjustment loss of $15.1 million as of December 31,
2004.
We currently enter into hedging transactions to help mitigate
our foreign exchange risk exposure. During 2004 and 2003, we
entered into foreign currency hedging activities primarily to
protect our net investment in our foreign subsidiaries. In
accordance with SFAS No. 133,
Accounting for
Derivative Instruments and Hedging Activities
, we are
required to recognize all derivative financial instruments as
either assets or liabilities on our consolidated balance sheets
at fair value. The effective portion of any gain or loss on
these derivative financial instruments, which have been
designated as a hedge of a net investment in foreign operations,
are reflected in accumulated other comprehensive income. Any
ineffective portion of any gain or loss on these derivative
financial instruments is recognized in earnings. We do not hold
or issue any derivative financial instruments for trading
purposes.
Impact of Inflation
We have not been adversely affected by inflation as
technological advances and competition have generally caused
prices for the hardware and software that we use for our
electronic platform to remain constant or to decline. In the
event of inflation, we believe that we will be able to pass on
any price increases to our participants, as the prices that we
charge are not governed by long-term contracts.
New Accounting Pronouncements
On December 16, 2004, the Financial Accounting Standards
Board, or FASB, issued SFAS No. 123 (revised 2004),
Share-Based Payment
, which is a revision of
SFAS No. 123. SFAS No. 123(R) supersedes APB
Opinion No. 25 and amends SFAS No. 95,
Statement of Cash Flows
. Generally, the approach in
SFAS No. 123(R) is similar to the approach described
in SFAS No. 123. However, SFAS No. 123(R)
requires all share-based payments to employees, including grants
of employee stock options, to be recognized in the income
statement based on their fair value. Pro forma disclosure is no
longer an alternative.
For public companies that do not file as small business issuers,
SFAS No. 123(R) must be adopted no later than
July 1, 2005. For nonpublic entities,
SFAS No. 123(R) is effective as of the beginning of
the first
69
annual reporting period that begins after December 15,
2005. Early adoption will be permitted in periods in which
financial statements have not been issued. We expect to adopt
SFAS No. 123(R) on July 1, 2005.
SFAS No. 123(R) permits companies to adopt its
requirements using one of two methods:
1. A "modified prospective" method in which
    compensation cost is recognized beginning with the effective
    date (a) based on the requirements of
    SFAS No. 123(R) for all share based payments granted
    after the effective date and (b) based on the requirements
    of SFAS No. 123 for all awards granted to employees
    prior to the effective date of SFAS No. 123(R) that
    remain unvested on the effective date.
2. A "modified retrospective" method which
    includes the requirements of the modified prospective method
    described above, but also permits entities to restate based on
    the amounts previously recognized under SFAS No. 123
    for purposes of pro forma disclosures either (a) all prior
    periods presented or (b) prior interim periods of the year
    of adoption.
We plan to adopt SFAS No. 123(R) using the modified
prospective method.
As permitted by SFAS No. 123, we currently account for
share-based payments to employees using APB Opinion
No. 25's intrinsic value method and, as such,
generally recognize no compensation cost for employee stock
options. Accordingly, the adoption of
SFAS No. 123(R)'s fair value method will have a
significant impact on our results of operations, although it
will have no impact on our overall financial position. While we
expect that the impact will be significant, we cannot predict
the amount of the impact at this time because it will depend on
levels of share-based payments granted in the future. However,
had we adopted SFAS No. 123(R) in prior periods, the
impact of the standard would have approximated the impact of
SFAS No. 123 as described in the disclosure of pro
forma net income and earnings per share in Notes 2 and 9 to
our consolidated financial statements and related notes included
elsewhere in this prospectus. It should be noted that there are
certain differences between the requirements of
SFAS No. 123 and SFAS No. 123(R) that may
result in a material difference in the impact of the fair value
calculations on our net income and earnings per share. This
includes the requirement under SFAS No. 123(R) to
estimate forfeitures, the requirement that an excess tax benefit
reduces taxes payable before it is realized, potential changes
to the capitalization of compensation cost and our use of
industry volatility figures in prior periods.
SFAS No. 123(R) also requires the benefits of tax
deductions in excess of recognized compensation cost to be
reported as a financing cash flow, rather than as an operating
cash flow as required under current literature. This requirement
will reduce net operating cash flows and increase net financing
cash flows in periods after adoption. We cannot estimate what
those amounts may be in the future because they depend on, among
other things, when employees exercise stock options. We did not
recognize any tax deductions in excess of the recognized
compensation cost for the years ended December 31, 2004,
2003 and 2002.
In December 2004, FASB Staff Position No. SFAS 109-2,
Accounting and Disclosure Guidance for the Foreign Earnings
Repatriation Provision within the American Jobs Creation Act of
2004
(FSP SFAS 109-2) was issued. FSP SFAS 109-2
provides guidance under SFAS 109,
Accounting for Income
Taxes
(SFAS No. 109), for recording the potential
impact of the repatriation provisions of the American Jobs
Creation Act of 2004 (the Jobs Act), enacted on October 22,
2004. FSP SFAS 109-2 allows time beyond the financial
reporting period of enactment to evaluate the effects of the
Jobs Act before applying the requirements of FSP
SFAS 109-2. Accordingly, we are evaluating the potential
effects of the Jobs Act and have not adjusted the tax expense or
deferred tax liability as of December 31, 2004 to reflect
the requirements of FSP SFAS 109-2.
Critical Accounting Policies
We have identified the policies below as critical to our
business operations and the understanding of our results of
operations. The impact of, and any associated risks related to,
these policies on our business operations is discussed
throughout "Management's Discussion and Analysis of
Financial Condition and Results of Operations" where these
policies materially affected our financial results. For a
detailed discussion on the application of these and other
accounting policies, see note 2 to our consolidated
financial statements and related notes included elsewhere in
this prospectus. Our discussion and analysis of our financial
condition
70
and results of operations are based upon our consolidated
financial statements, which have been prepared in accordance
with U.S. generally accepted accounting principles. The
preparation of financial statements in conformity with these
accounting principles requires us to make estimates and
assumptions that affect the reported amount of assets and
liabilities, and the disclosure of contingent assets and
liabilities, at the date of our financial statements and the
reported amounts of revenues and expenses during the reporting
period.
We evaluate our estimates and judgments on an ongoing basis,
including those related to the accounting matters described
below. We base our estimates and judgments on our historical
experience and other factors that we believe to be reasonable
under the circumstances existing when we make these estimates
and judgments. Based on these factors, we make estimates and
judgments about, among other things, the carrying values of
assets and liabilities that are not readily apparent from market
prices or other independent sources and about the recognition
and characterization of our revenues and expenses. The values
and results based on these estimates and judgments could differ
significantly under different assumptions or conditions and
could change materially in the future.
We believe that the following critical accounting policies,
among others, affect our more significant judgments and
estimates used in the preparation of our consolidated financial
statements and could materially increase or decrease our
reported results, assets and liabilities.
Legal Contingencies
We are subject to an ongoing risk of potential legal proceedings
and claims. We are currently involved in certain legal
proceedings as discussed under the heading "Regulation and
Legal Proceedings". Whenever we become involved in a legal
proceeding or claim, through consultation with outside counsel
handling our defense and based upon an analysis of potential
results, assuming a combination of litigation and settlement
strategies, we determine if any legal accrual is required. We
are required to assess the likelihood of any adverse judgments
or outcomes to these matters as well as potential ranges of
probable losses. These losses can be difficult to estimate and,
in the case of judgments or other outcomes that may require us
to change our business or operations, can have a long-term cost
that can be impossible to determine. We make a determination of
the amount of reserves required, if any, for these contingencies
after careful analysis of each individual issue. We have not
established any reserves since our inception, and we currently
do not maintain any reserves.
We face pending regulatory demands and threatened legal claims,
as described under the heading "Regulation and Legal
Proceedings". However, we have concluded that these matters
have not proceeded sufficiently for their likely outcomes to be
determinable. It is possible, however, that future results of
operations for any particular quarterly or annual period could
be materially and adversely affected by new developments,
changes in our assumptions or the effectiveness of our
strategies relating to these matters.
Goodwill and Other Identifiable Intangible Assets
We have significant intangible assets related to goodwill and
other acquired intangibles. Our determination of related
estimated useful lives of intangible assets and whether or not
these assets are impaired requires us to make significant
judgments. If we change our strategy or if market conditions
shift, our judgments may change, which may result in adjustments
to recorded asset balances.
We periodically evaluate acquired intangible assets for
indications of potential impairment. In assessing the
recoverability of the goodwill and other intangibles, we must
make assumptions regarding estimated future cash flows and other
factors to determine the fair value of the respective assets. If
these estimates or their related assumptions change in the
future, we may be required to record impairment charges against
these assets. Future events could cause us to conclude that
indications of impairment exist and that goodwill associated
with our acquired businesses is impaired. Any resulting
impairment loss could have a material adverse impact on our
financial condition and results of operations. Our goodwill and
other intangible assets are evaluated for impairment annually in
our fiscal fourth quarter or earlier if events indicate that
value may be impaired. Such evaluation includes comparing the
fair value of a reporting unit with its carrying value and
analyzing expected future discounted cash flows at the reporting
unit level. The reporting unit level for our
71
goodwill and the majority of our other intangible assets is the
futures business segment, which relates to the operations of our
subsidiary, the IPE. This analysis has not resulted in
impairment through the end of 2004.
As of December 31, 2004, we had net goodwill of
$82.5 million and net other intangible assets of
$3.6 million relating to our acquisition of the IPE in 2001
and our purchase of trademarks and internet domain names from
various third parties in 2003. The FASB issued
SFAS No. 141 and SFAS No. 142 in June 2001.
SFAS No. 141 requires business combinations initiated
after June 30, 2001 to be accounted for using the purchase
method of accounting and broadens the criteria for recording
intangible assets separate from goodwill. SFAS No. 142
requires the use of a non-amortization approach to account for
purchased goodwill and certain intangibles with indefinite
lives. Effective January 1, 2002, we adopted
SFAS No. 142. Under the provisions of
SFAS No. 142, we no longer amortize goodwill or other
intangible assets with indefinite useful lives. In the period
between the acquisition of IPE and December 31, 2002,
goodwill and indefinite lived intangibles were amortized on a
straight-line basis over their estimated useful lives, which
were estimated to be 20 years. We recognize specifically
identifiable intangibles when a specific right or contract is
acquired. These intangibles are amortized on a straight-line
basis over the lesser of their contractual and estimated useful
lives, which are estimated to be five years.
The goodwill and other intangible assets balances have increased
since our acquisition of the IPE due to translation adjustments.
Under SFAS No. 52,
Foreign Currency
Translation
, following a business combination, the amounts
allocated as of the acquisition date to the assets acquired and
liabilities assumed, including goodwill and other intangible
assets, should be translated as if the purchase adjustments were
recorded directly on the books of the foreign subsidiary. The
appreciation of pounds sterling relative to the U.S. dollar
in 2004, 2003 and 2002 has increased our goodwill and other
intangibles with a corresponding increase primarily to
accumulated other comprehensive income. The translation
adjustments have also resulted in additional amortization
expenses being recognized on the increase in the definite-lived
other intangible assets.
Capitalized Software Development Costs
We capitalize costs related to the development of software
developed or obtained for internal use in accordance with AICPA
Statement of Position 98-1,
Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use
.
Costs incurred during the preliminary project work stage or
conceptual stage, such as determining the performance
requirements, system requirements and data conversion, are
expensed as incurred. Costs incurred in the application
development phase, such as coding, testing for new software and
upgrades that result in additional functionality, are
capitalized and are amortized using the straight-line method
over the useful life of the software, not to exceed three years.
Amortization of these capitalized costs begins only when the
software becomes ready for its intended use. Costs incurred
during the post-implementation/operation stage, including
training costs and maintenance costs, are expensed as incurred.
We capitalized internally developed software costs of
$4.8 million, $5.2 million and $6.0 million
during 2004, 2003 and 2002, respectively. Determining whether
particular costs incurred are more properly attributable to the
preliminary or conceptual stage, and thus expensed, or to the
application development phase, and thus capitalized and
amortized, depends on subjective judgments about the nature of
the development work, and our judgments in this regard may
differ from those made by other companies. General and
administrative costs related to developing or obtaining such
software are expensed as incurred.
We review our capitalized software development costs and our
other long-lived assets for impairment at each balance sheet
date and whenever events or changes in circumstances indicate
that the carrying amount of our long-lived assets should be
assessed. We also write down our property and equipment,
including computers, network equipment, and software, for
estimated obsolescence. Our judgments about impairment are based
in part on subjective assessments of the usefulness of the
relevant software and may differ from comparable assessments
made by others. We have not recorded any impairment charges
since our formation. To analyze recoverability, we estimate
undiscounted net future cash flows over the remaining life of
such assets. If these projected cash flows are less than the
carrying amount, impairment would be recognized, resulting in a
write-down of assets with a corresponding charge to earnings. We
believe that our capitalized software development costs and our
other long-lived assets are appropriately valued in our
consolidated financial statements and related notes included
elsewhere in this prospectus.
72
Foreign Currency
We currently generate a significant portion of our revenues and
net income and corresponding accounts receivable and cash
through sales denominated in pounds sterling. As of
December 31, 2004, $46.0 million of our cash and cash
equivalents, $4.5 million of our accounts receivable,
$85.6 million of our goodwill and other intangible assets
and $134.0 million of our total net assets were denominated
in pounds sterling. The foreign currency gains and losses on
these pounds sterling net assets are currently significant to
us, and we have determined that foreign currency derivative
products are required to hedge our exposure. If there were a
significant decline in the pounds sterling exchange rate, our
net assets would be less than the current reported amount. As of
December 31, 2004, a decline in the exchange rate of pounds
sterling to the U.S. dollar of 10% from the rate as of
December 31, 2004 would result in a translation loss of
$15.1 million.
The functional currency of our foreign subsidiaries is pounds
sterling. We translate these assets and liabilities into
U.S. dollars using period-end exchange rates, and income
and expenses are translated using the average exchange rates for
the reporting period. Translation adjustments are recorded in
accumulated other comprehensive income, a separate component of
shareholders' equity. As of December 31, 2004 and
2003, the accumulated other comprehensive income translation was
$37.0 million and $26.4 million, respectively. Gains
and losses from foreign currency transactions, such as those
resulting from the settlement of foreign receivables or payables
or cash accounts of our foreign subsidiaries held in
U.S. dollars, are included in other income
(expense) in the consolidated statements of income and
resulted in net foreign currency transaction losses of
$1.4 million, $644,000 and $149,000 in 2004, 2003 and 2002,
respectively.
During 2004 and 2003, we entered into hedging transactions to
help mitigate our foreign exchange exposure. During 2004 and
2003, we entered into forward exchange contracts as hedges to
protect the net investment in our foreign subsidiaries. As a
matter of policy, our derivative positions are used to reduce
risk by hedging an underlying economic exposure. Because of the
high negative correlation between the hedging instrument and the
underlying exposure, fluctuations in the value of the
instruments are generally offset by reciprocal changes in the
value of the underlying exposure. Our currency derivatives are
generally straightforward over-the-counter instruments with
liquid markets. We do not hold or issue any derivative financial
instruments for trading purposes. In accordance with
SFAS No. 133, we are required to recognize all
derivative financial instruments as either assets or liabilities
in our consolidated balance sheets at fair value. The effective
portion of any gain or loss on these derivative financial
instruments, which have been designated as a hedge of a net
investment in foreign operations, are reflected in accumulated
other comprehensive income. Any ineffective portion of any gain
or loss on these derivative financial instruments are
immediately recognized in earnings. As of December 31,
2004, we had a £13 million average rate forward net
investment hedge with a June 30, 2005 settlement date. The
loss on this hedge was $815,000, net of taxes, as of
December 31, 2004 and due to the fact that it was an
effective hedge under SFAS 133, it was reflected in
accumulated other comprehensive income. The hedge effectiveness
will continue to be measured on a quarterly basis through the
settlement date. As of December 31, 2004 and 2003, the
portion of our shareholders' equity attributable to
accumulated other comprehensive income from hedging derivatives
account balance was a net loss of $2.5 million and
$442,000, respectively.
When entered into, we formally designate and document the
derivative financial instrument as a hedge of a specific
underlying exposure, as well as the risk management objectives
and strategies for undertaking the hedge transactions. We
formally assess, both at inception and at least quarterly
thereafter, whether the derivative financial instruments that
are used in hedging transactions are effective at offsetting
changes in either the fair value or cash flows of the related
underlying exposure. Because of the high degree of effectiveness
between the hedging instruments and the underlying exposure
being hedged, fluctuations in the value of the derivative
financial instruments are offset by changes in the fair value or
cash flows of the underlying exposures being hedged.
The counterparties with whom we trade foreign exchange contracts
are major U.S. and international financial institutions,
including one which is a related-party. For a discussion of the
foreign exchange contracts with the related parties, see
"Certain Relationships and Related Transactions". We
continually monitor our
73
position with and the credit quality of the financial
institutions and do not expect nonperformance by any of the
counterparties.
We will continue to offer additional products in the United
Kingdom and potentially in other countries in Europe beginning
in 2005, which will increase our foreign currency exposure as
these sales and receivables will be denominated in the
functional currency of our foreign subsidiaries.
74
INDUSTRY OVERVIEW
Introduction
The markets for energy commodities trading include trading in
both physical commodities contracts and derivative
instruments — instruments that derive their value from
an underlying energy commodity or index — across a
wide variety of commodities, including crude oil, natural gas,
electricity or power, coal, chemicals, weather and emissions.
Derivative instruments provide a means for hedging price risk,
asset allocation, speculation or arbitrage. Contracts for
physical commodities allow counterparties to contract for the
delivery of the underlying physical asset.
Energy Commodities
Crude oil is one of the world's most widely-used
commodities, and as such is also one of the most widely-traded
commodities. The term "crude" oil refers to petroleum
in its raw form, as it comes out of the earth. There are several
different types or grades of crude oil traded in the market,
each of which is named to reflect the oil field from which it is
extracted. For example, Brent Crude oil is named for the Brent
Oil Field in the North Sea, off the coast of Britain, and
Oseberg and Forties are grades of crude oil similar to Brent
Crude and are also drawn from the North Sea. Crude oil,
including Brent Crude oil, is only useful after refining, which
produces numerous oil-based component products, including
petroleum gas, gasoline, naphtha, kerosene, gas oil, heavy gas
oil, lubricating oils and residuals, among others. The breadth
of these refined oil products is illustrated in the diagram
below.
75
Natural gas, another widely-used and widely-traded energy
commodity, is a naturally occurring combustible mixture of
hydrocarbon gases that is extracted from the earth. Natural gas
is used extensively on a commercial basis in the production of
chemicals and the generation of electric power. Residential use
of natural gas is on the rise given its availability and price
relative to heating oil and electric power. While natural gas is
comprised primarily of methane, it can also include ethane,
propane, butane and pentane. Natural gas is found in reservoirs
underneath the earth, and its presence is commonly associated
with crude oil deposits. Once brought from underground, natural
gas is refined to remove impurities such as water and sand, as
well as other gases and compounds. After refining, natural gas
is transported through a network of pipelines, thousands of
miles of which exist in the United States and other developed
countries, to delivery points, or "hubs".
Power can be generated through a number of means, including the
burning of refined crude oil products and natural gas, or
through renewable means such as hydro-electric generation or
wind. In contrast to natural gas and crude oil, power is a
man-made "end" commodity that cannot be
stored — it must be used as it is produced —
and therefore is transported only within the regions in which it
is generated.
Natural gas and power contracts are traded based, in part, upon
the location to which they are delivered. In North America,
there are nearly 100 natural gas hubs (including the benchmark
Henry Hub located in Louisiana), and approximately 15 power
hubs. Market participants can trade contracts for natural gas or
power based on any of these hubs, whose prices are determined by
transportation costs and supply and demand at each hub. An
example of a leading regional power contract is the PJM
financial power contract, which is based on power generated in
the Pennsylvania, New Jersey and Maryland region. Further,
natural gas market participants often enter into basis swaps
that hedge the difference in cost between delivery to the
benchmark Henry Hub and another hub that may be closer to the
participants' preferred point of delivery. The diagrams
below illustrate the locations of some of the major North
American natural gas and power hubs.
Major North American Natural Gas Hubs
76
Major North American Power Hubs
Source:
Energy Information Association (EIA); Intelligence Press Inc.
Derivatives and Physical Commodities Contracts
In addition to being characterized by an underlying commodity or
component asset, derivative contracts are further characterized
by physical delivery or financial settlement, as well as the
term of the contract. The contracts with the greatest liquidity
are those that have settlement or expiry dates within the
following one or two months, called the prompt or front months.
Contracts that have settlement dates one year out or longer,
referred to as the back months, tend to be less actively traded.
Participants in the markets for energy commodities trading
include industrial firms that produce or use energy products and
financial institutions, among others. These market participants
pursue a range of trading strategies for a variety of reasons,
including:
•
Risk Management:
Firms that produce or consume
    commodities may use physical or derivative contracts to hedge
    their exposure to future price movements.
•
Asset Allocation:
Derivative contracts allow market
    participants to gain market exposure to the returns or
    diversification offered by a particular commodity or group of
    commodities without investing in the underlying physical asset.
•
Speculation:
Market participants that have a specific
    view on the direction of commodity prices may buy or sell
    derivative contracts in anticipation of benefiting from a
    commodity's directional price movement, whether rising or
    falling.
•
Arbitrage:
Market participants may buy or sell derivative
    contracts in an attempt to profit from perceived value
    differences among related commodities, or correlated asset
    classes, or between the derivatives and physical markets.
•
Physical delivery:
Firms that consume or are under
    contractual obligations to deliver or purchase energy
    commodities in physical form, such as a natural gas distribution
    company, may enter into a contract that will give them the right
    to receive or sell a specified quantity of the underlying
    commodity at a specified time and location in the future.
There are two types of market structures within the energy
commodities trading sector — the futures market and
the OTC market. These market structures are distinguished by
their unique regulatory, participatory, reporting and
operational requirements.
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The Futures Market
According to the Futures Industry Association, the broader
futures market is comprised of more than
50 government-regulated exchanges located in
29 countries, including 11 exchanges located in the
United States. Until the early 1970s, futures markets were
restricted to commodities (
e.g.
, wheat, copper, sugar).
Since that time, futures markets have expanded to incorporate
additional market sectors, including: currencies, interest rate
instruments and stock indices. Futures exchanges that trade
energy commodities include, among others, NYMEX (which
principally trades in futures on energy and precious metals) and
The Tokyo Commodity Exchange (which principally trades futures
on gold, silver, platinum, crude oil, gasoline, kerosene and
rubber) and, to a lesser extent, the Chicago Mercantile
Exchange, or CME (which principally trades futures on interest
rates, stock indices, foreign currencies and agricultural
commodities) and the Chicago Board of Trade, or the CBOT (which
principally trades futures on financial instruments,
agricultural commodities, precious metals and equity indices).
In addition to offering trading of standardized contracts,
futures exchanges provide access to a centralized clearing
system. Commodity futures exchanges are regulated in the United
States by the CFTC and are required to publish certain
information, such as prices and participant information.
Commodity futures exchanges are regulated in the United Kingdom
by the FSA.
A futures exchange typically operates as an auction market,
where trading is conducted either on an open-outcry trading
floor or on an electronic platform. In an auction market, prices
are established publicly either on the floor or on a screen by
participants posting bids, or buying indications, and offers, or
indications to sell. In a typical futures market, participants
can trade two types of instruments:
•
Futures:
A future is the most common exchange-traded
    commodity contract. It is a standardized contract to buy or sell
    a specified quantity of an underlying asset during a particular
    month (an exact delivery date is not specified). Delivery
    amounts are standardized and differ by commodity. For example,
    the IPE Brent Crude futures contract has a contract quantity of
    1,000 net barrels, or 42,000 U.S. gallons. The price
    of the futures contract is determined through the auction
    process on the exchange. These contracts are settled through
    either physical delivery or cash settlement.
•
Options:
An option is a contract that conveys to the
    buyer the right, but not the obligation, to call (buy) or put
    (sell) an underlying futures contract at a price determined at
    the time of the execution of the option.
Historically, trading in futures contracts took place
exclusively through face-to-face interaction on a physical
trading floor of an exchange, also known as a "pit",
through an auction process known as "open-outcry". In
an open-outcry market, the matching of buyers and sellers is
achieved by traders in the pit locating other traders in the pit
who have an opposite trading interest. As the name implies,
traders "cry out" their bids and offers, often in
combination with a system of hand signals, with the objective of
finding a counterparty with whom to trade.
The trading floor imposes physical limitations on the number of
traders who can trade or observe the market at any one time.
Therefore, exchanges generally restrict direct access to their
trading floor to a limited number of exchange members. This
limited access may drive up the price of membership on the
exchange, and requires non-members to execute trades through
intermediaries, such as brokers known as futures commission
merchants, or FCM's, who are members of the exchange. As a
result of these physical limitations, the open-outcry model is
inefficient in certain respects, including the high cost of
operating and accessing a physical trading floor, the relatively
slow speed of execution, the inefficiencies inherent in
requiring participants to use multiple intermediaries to
complete transactions, and the increased risk of error arising
from miscommunication. These inefficiencies have caused many
futures exchanges to develop electronic trade execution
facilities over the last decade, thereby reducing the access
limitations and inefficiencies of open-outcry trading.
All futures contracts and options on futures contracts are
cleared through a central clearinghouse. Clearing is the
procedure by which each futures and options contract traded on
an exchange is novated, or replaced, with a contract with the
clearinghouse. In this process, the clearinghouse is interposed
between the trading parties and becomes the buyer to each member
firm that is a seller, and the seller to each member firm that
is a buyer. By interposing itself between the member firm
parties of every trade, the clearinghouse guarantees each member
firm party's performance, and eliminates the need to
evaluate counterparty credit
78
risk. FCMs function, in turn, as intermediaries between market
participants and a clearinghouse. From the participant's
perspective, the FCM is the counterparty to a cleared trade, as
the contract is cleared by the clearinghouse in the name of the
FCM. From the clearinghouse's perspective, the FCM is the
counterparty to the trade. In effect, the clearinghouse takes on
the counterparty credit risk of the FCM, and the FCM assumes the
credit risk of each counterparty, which is partially offset by
capital held by the FCM with respect to each counterparty.
Some futures exchanges, such as NYMEX, CME and Eurex, own and
operate their own clearinghouse. Other exchanges contract for
their clearing services with a third party. For example, we
clear our futures contracts through LCH.Clearnet and the CBOT
clears its contracts through the clearinghouse operated by CME.
The OTC Market
Over-the-counter, or OTC, is a term used to describe trading
activity that does not take place on a regulated exchange.
According to the Bank for International Settlements, 84% of the
volume of all derivative contracts traded in 2004 took place in
the OTC market. In this market, commercial market participants
have historically entered into negotiated, bilateral contracts,
although in recent years participants have begun to take
advantage of cleared OTC contracts that, like futures contracts,
are standardized and cleared through a central clearinghouse.
In contrast to the limited range of futures contracts available
for trading on regulated exchanges, participants in the OTC
markets have the ability to trade an unlimited number of
customized contracts, which may specify contract terms, such as
the underlying commodity, delivery date and location, term and
contract size. Furthermore, while exchanges typically limit
their hours of operation and restrict direct trading access to a
limited number of exchange members, OTC markets operate
virtually around the clock and do not impose membership
requirements.
Financially settled OTC contracts are classified as
derivatives — meaning that the contract is settled
through cash payments based on the value of the underlying
commodity, rather than through physical delivery of the
commodity. Physical contracts provide for settlement through
physical delivery of the underlying commodity. Physical
contracts may be entered into for either immediate delivery of a
commodity, in the cash or "spot" market, or for
delivery of a commodity at a specified time in the future, in
the "forward" market. Forward contract prices are
generally based on the spot market prices of the underlying
commodity, since long-term contracts evolve into short-term
contracts over time.
Several types of contracts are typically traded in the OTC
market:
•
Forwards and Swaps:
A forward contract is an agreement
    between two parties to deliver a specified quantity of an
    underlying asset, on a specified date, and at a specified
    location. Unlike futures contracts discussed above, forward
    contracts are not standardized, but can be negotiated on an
    individual basis between counterparties. Swaps generally are
    contracts between the holders of two different assets with
    differing risk and performance profiles in which the risk or
    performance characteristics are exchanged. Swaps may be settled
    against the future price of a single commodity or against an
    index of commodity prices.
•
Differentials and Spreads:
Differentials, or basis swaps,
    are contracts that allow counterparties to "swap"
    delivery (or the financial equivalent of delivery) of a
    commodity between two different delivery points. For example,
    trading parties may enter into a basis swap for natural gas by
    swapping delivery of natural gas at the benchmark Henry Hub for
    delivery at any one of the nearly 100 other hubs in North
    America. This type of contract allows market participants to
    hedge or speculate on forward natural gas prices in various
    markets. The price of a basis swap contract is based on the cost
    differential between delivery at each hub. Spreads are the
    simultaneous purchase and sale of forward contracts for
    different months, different commodities or different grades of
    the same commodity.
•
Options:
Options are contracts that convey to the buyer
    the right, but not the obligation, to require the seller to make
    or take delivery of a stated quantity of a specified commodity
    at a specified price.
79
Options may also be cash settled, based on the difference
    between the market price of the underlying commodity and the
    price of the commodity specified in the option.
As a general matter, OTC transactions may be entered into
directly between two counterparties, or they may be entered into
through a broker. Trading in the OTC commodities markets has
traditionally been carried out through brokers who conduct
trades with their customers over the telephone, commonly
referred to as "voice brokers". Upon receiving an
order from a customer, a broker attempts to find a counterparty
for the proposed trade. Once the broker has matched a firm bid
with a firm offer and completes the deal telephonically, the
seller must send a confirmation fax or similar documentation to
the buyer to confirm the trade. Each counterparty then enters
the details of the trade into its respective internal risk
management system. This traditional method of OTC commodities
trading tends to be relatively slow, prone to errors and can
involve relatively high transaction costs.
Since participants in the OTC commodities markets have
traditionally entered into individually negotiated bilateral
contracts, the OTC markets have traditionally been characterized
by fragmented liquidity and a lack of price transparency.
Without a centralized, comprehensive source of pricing data and
an observable, real-time market for a specific contract, it was
often difficult for market participants to determine the best
price available for their trade.
Because bilateral OTC contracts are entered into and settled on
a principal-to-principal basis, each party is exposed to
counterparty credit risk. Therefore, traditionally, OTC market
participants have relied heavily on their internal risk
management systems to monitor and mitigate counterparty credit
and performance risk. In recent years, a growing number of
markets, including ours, have begun to offer clearing for some
of the more commonly traded OTC contracts to address the risks
associated with entering into bilateral agreements. Participants
who choose to trade cleared OTC products must have an account
with a FCM.
A key structural difference between futures and cleared OTC
forward markets on the one hand and equity markets on the other
hand is the need for a trader in the futures or OTC forward
markets to close out a long or short position through the same
exchange on which the original position was established. This
has the benefit of retaining the open interest at that exchange.
In contrast, traders in equity markets can execute any trade on
any exchange with quality and cost of execution being the only
considerations.
Industry Size and Growth
The volume of energy derivative contracts traded for any
specific commodity tends to be a multiple of the physical
production of that commodity. For example, the equivalent of
approximately 310 million barrels of crude oil was traded
on the IPE and NYMEX on average each day during 2004, or 3.75
times physical consumption and production during the same
period. In the natural gas market, the volume of
financially-settled contracts traded in North America during the
first nine months of 2004 represented 172 trillion cubic
feet, or approximately 8.4 times the 20.4 trillion
cubic feet consumed during the same period, according to the
International Energy Agency, or IEA.
The global growth in consumption of physical energy commodities
is largely tied to global GDP growth. According to the
International Energy Agency, or IEA, global consumption and
production of crude oil in 2004 totaled 83 million barrels
per day. By 2025, the Energy Information Administration, a
division of the U.S. Department of Energy, or EIA-DOE,
expects global oil demand to increase to 120 million
barrels per day. Natural gas consumption in 2003 (the most
recent year for which data is available) by the 30 nations
comprising the OECD was 49 trillion cubic feet.
Energy commodities as an investable asset class have experienced
tremendous growth in recent years. For example, in 1996,
$2.0 billion was invested in funds tracking the Goldman
Sachs Commodity Index, 70% of which is allocated to energy
products. By the end of 2004, that amount had risen ten-fold, to
more than $25.0 billion, implying a 37% compound annual
increase. Additionally, according to the Futures Industry
Association, the number of energy futures contracts traded in
2004 was 243.5 million, up from 68.7 million contracts
traded in 1995, a growth rate of 15% per annum.
80
The following chart illustrates the growth in the volume of
energy futures contracts traded from 1995 through 2004.
Global Energy Futures Industry
Volume
(1)
Industry Trends
We believe that the increasing interest in energy derivatives
trading is being driven primarily by the following key factors:
Growth in Electronic Trading
Innovations in technology have increased the speed of
communications and the availability of information, which have
enabled market participants to access and participate in the
commodities markets more easily and quickly and less
expensively. During the last decade, the use of electronic
trading has become increasingly prevalent, and offers a number
of advantages relative to floor-based trading, including:
•
direct market access and the elimination of physical trading
    barriers;
•
the ability to trade multiple products on multiple exchanges
    simultaneously;
•
improved speed and quality of trade execution;
•
significant reduction of direct and indirect transaction costs;
•
ease of direct integration with internal risk management systems;
•
greater transparency for market participants and observers;
•
extended trading hours and the availability of cross-border
    trade execution; and
•
improved regulatory oversight and ease of complete and accurate
    record-keeping.
These advantages are encouraging an increasing number of market
participants to transition to electronic energy trading. In
addition, a number of market participants only trade
electronically. Because energy commodity futures have
historically traded on open-outcry exchanges, these market
participants, including several proprietary trading firms and
hedge funds, have been unable or unwilling to trade these
products in the past.
81
The shift toward electronic trading is evident in both futures
and OTC markets. Celent estimates that 17% of U.S. energy
commodities trading is conducted electronically, and expects
this figure to increase to 29% by 2008. In the futures market,
the growth in trading volumes on electronic exchanges such as
Eurex and LIFFE in Europe, and hybrid markets with both floor
and significant electronic operations such as CME, has
significantly outpaced the volume growth on historically
floor-based exchanges such as the IPE, NYMEX, and the CBOT
during the last five years.
The figure below illustrates the volume growth of six major
global futures exchanges, indexed from 1999 to 2004.
Lower Barriers to Entry for Market Participants
The barriers to entry for trading in energy derivatives have
traditionally been significant, which has limited the ability of
many traders to participate in this market. In recent years, a
considerable erosion of these barriers has occurred largely due
to the availability of electronic trading. In addition to
electronic trading, other changes in market structure
contributing to lower barriers to entry include:
•
Declining exchange membership fees:
Growing competition
    among exchanges has resulted in some futures exchanges reducing
    the cost of exchange membership.
•
Use of independent software vendors:
ISVs are firms that
    develop and market software that provides direct access to
    various electronic markets. ISVs allow participants to access
    multiple exchanges through a single interface and are typically
    well integrated with participants' internal risk management
    systems. For example, proprietary trading firms frequently use
    ISVs to connect to multiple exchanges. ISVs have significantly
    expanded market access, including at multiple locations that are
    great distances from major market centers, which has in turn
    increased the number of active traders in the market.
•
Introduction of cleared OTC contracts:
As described
    above, trading in the OTC markets traditionally has required
    participants to assume counterparty credit risk. However, energy
    markets now feature cleared OTC contracts, beginning with the
    introduction of these contracts in our markets in 2002. Cleared
    OTC contracts allow participants to limit counterparty credit
    risk and lower the amount of capital required to trade.
82
Increasing Adoption of Energy Commodities as an Investable
    Asset Class
Investors' interest in energy commodities as an asset class
has experienced significant growth in recent years. A number of
attributes inherent to energy commodities have contributed to
this growth including:
•
Higher Volatility:
Energy commodities generally
    experience greater price volatility than other asset classes,
    such as stocks or bonds, because their prices are impacted by a
    greater array of risks, including weather, geopolitical events,
    OPEC quotas and supply interruptions. Volatility increases the
    need to hedge contractual price risk and creates opportunities
    for speculative trading and arbitrage.
The following table illustrates the historical volatility of
    natural gas and crude oil, compared to that of stocks and bonds.
•
Geopolitical Risk:
The price level and volatility of
    energy commodities, and oil in particular, tend to reflect
    events in the geopolitical environment. Therefore, market
    participants seeking exposure to, or a hedge against, global
    events in their investment portfolio, or seeking to speculate on
    the directional movement of a price in response to a particular
    event, may find energy commodity derivatives attractive.
•
Low/Negative Correlation with Other Asset Classes:
According to a study conducted by the National Bureau of
    Economic Research in June 2004, the correlation between price
    movements in energy derivatives and those in stock indices and
    bonds has historically been negative for holding periods of
    greater than one month — meaning that prices in the
    energy derivatives markets generally move in the opposite
    direction of price movements in the stock and bond markets. For
    shorter holding periods (
i.e.
, one month or less), this
    correlation has historically been insignificant. This
    low/negative correlation has made energy derivatives an
    attractive way to hedge and improve the overall risk profile of
    an investment portfolio.
•
Asset Diversification:
As investors seek to increase
    investment yield while minimizing portfolio risk, investment
    professionals have sought to diversify into additional asset
    classes. As a result of this trend, use of derivative contracts
    related to the energy sector has grown, and with the increased
    availability and accessibility of electronic trading we believe
    it will continue to grow, as a component of investors'
    portfolios.
83
•
Attractive Investment Returns:
Competition for
    above-market returns has been driving an increasing number of
    money managers to search for, and invest in, new asset classes.
    We believe the strong historical performance of commodities
    relative to other asset classes is an important factor that has
    led to their increasing attractiveness as an investment option.
The following diagram illustrates the performance of selected
energy commodities compared to selected traditional asset
classes over a ten-year period.
10-Year Indexed Performance of Energy Commodities vs.
Traditional Assets
New Market Participants
Recent growth in energy derivatives trading has been driven in
part by increased participation in energy markets by the
following categories of market participants:
•
Financial institutions:
Financial institutions are
    expanding their capabilities and resources in energy commodities
    trading, attempting to capitalize on increased energy market
    volatility as well as to leverage their deep client
    relationships, strong credit ratings, and sophisticated risk
    management controls. For example, some financial institutions in
    recent years have become owners of utilities and other energy
    production facilities, increasing their participation in these
    markets for hedging purposes. In addition, many independent
    utility operators, which are exposed to market price risk, are
    outsourcing their hedging activity to financial institutions.
•
Hedge funds:
Hedge funds have committed significant
    capital in recent years to trading in energy commodities in
    search of above-market, uncorrelated investment returns, and
    today play a role in providing liquidity in certain energy
    markets. Global macro funds (the most-employed hedge fund
    strategy in terms of invested capital) are actively increasing
    their exposure to energy commodities, and it is estimated that
    as many as 300 new energy-focused funds may launch in 2005,
    according to Investment Dealers' Digest.
•
Proprietary trading firms:
The number of proprietary
    trading firms has increased in conjunction with the migration
    toward electronic trading. Definitive data on the number of
    these firms, the number of
84
traders they employ, or their contribution to current daily
    trading volume is not readily available, although we believe
    that their ability to provide liquidity is and will continue to
    be significant. Given that the barriers to entry for traders
    working at these types of firms are relatively low —
    requiring at a minimum a "screen", a nominal amount of
    their own capital, a credit line and access to execution
    services — we expect that the number of these market
    participants will continue to increase.
•
Institutional investors:
Institutional investors, such as
    pension funds, are increasingly allocating a growing percentage
    of their funds to commodities to maximize the benefits of
    diversification. According to Celent, pension funds currently
    allocate an estimated three to five percent of their overall
    portfolio to commodities. Additionally, Celent notes that
    insurance companies, foundations and endowments have begun to
    show interest in the commodities sector.
85
BUSINESS
Overview
We operate the leading global futures and over-the-counter, or
OTC, marketplace for trading a broad array of energy products.
Our marketplace brings together buyers and sellers of
derivatives and physical energy commodities contracts through
our leading, Internet-based electronic trading platform. Our
electronic platform increases the accessibility and transparency
of the energy commodities markets and enhances the speed and
quality of trade execution. The open architecture of our
business model — meaning our ability to offer
centralized access to trading in futures and OTC contracts on a
cleared or bilateral basis through multiple
interfaces — allows our participants to optimize their
trading operations and strategies. We conduct our OTC business
directly, and our futures business through our wholly-owned
subsidiary, the International Petroleum Exchange, or the IPE.
The IPE is the largest energy futures exchange in Europe, as
measured by 2004 traded contract volumes.
During 2004, 35.5 million contracts were traded in our
futures markets both on our electronic platform and on our
open-outcry trading floor and 31.0 million contracts were
traded in our OTC markets, up 6.6% from 33.3 million
futures contracts traded in 2003 and up 27.6% from
24.3 million OTC contracts traded in 2003. Our revenues
consist primarily of transaction fees, trading access fees and
market data fees. On a consolidated basis, we generated
$108.4 million in revenues in 2004, a 15.6% increase
compared to $93.7 million in 2003, and $21.9 million
in net income in 2004, a 64.1% increase compared to
$13.4 million in 2003. We recorded consolidated net cash
provided from operations of $40.2 million in 2004, a 48.2%
increase compared to $27.1 million in 2003.
Our History
In 1997, Jeffrey C. Sprecher, our founder, chairman and chief
executive officer, acquired Continental Power Exchange, Inc., or
CPEX, our predecessor company, to develop a platform to provide
a more transparent and efficient market structure for OTC energy
commodities trading. In May 2000, our company was formed, and
CPEX contributed to us all of its assets, which consisted
principally of electronic trading technology, and its
liabilities, in return for a minority equity interest in our
company. In connection with our formation, seven leading
wholesale commodities market participants, which we refer to as
our Initial Shareholders, acquired equity interests in our
company and entered into order flow agreements with us. In
November 2000, six leading natural gas and power companies,
which we refer to as the Gas and Power Firms, acquired equity
interests in our business, entered into order flow agreements
with us and made a $30 million cash payment to us. The
order flow agreements, which committed the Initial Shareholders
and the Gas and Power Firms to execute minimum annual volumes of
transactions on our electronic platform, expired between 2002
and 2003. We currently have no order flow agreements in effect
with any market participant.
In June 2001, we expanded our business into futures trading by
acquiring IPE Holdings Plc, the owner of the IPE, which, at the
time, was operated predominantly as a floor-based, open-outcry
exchange. The IPE had been seeking to expand its electronic
trading capabilities since the late 1990s following the
emergence of the industry trend toward electronic trade
execution. At the time, we were seeking to expand our product
offerings and to gain access to clearing and settlement
services. Based on the complementary nature of our businesses,
we decided to acquire the IPE to develop a leading platform for
energy commodities trading that would offer liquidity in both
the futures and OTC markets. The IPE, as a regulated futures
exchange, had both established liquidity and a recognizable
brand name in global energy markets. Prior to our acquisition of
the IPE, we conducted trading only in OTC markets.
We believe that we have achieved many strategic benefits through
the successful integration of futures markets into our business.
For example, we have been able to expand our product offerings
through the introduction of the industry's first cleared
OTC products, which we were able to offer in conjunction with
the IPE's third-party clearing provider, LCH.Clearnet. Our
acquisition of the IPE included a futures market data business,
which, together with the market data generated by trading
activity in our OTC markets, has given us access to a broad and
valuable range of data related to the energy commodities
markets. We have developed, and intend to continue to develop,
these market data services to increase and diversify our
revenues.
86
Our Business
Our marketplace is globally accessible, promotes price discovery
and offers participants the opportunity to trade a variety of
energy products. Our key products include contracts based on
crude or refined oil, natural gas and power. Our derivative and
physical products provide participants with a means for managing
risks associated with changes in the prices of these
commodities, asset allocation, ensuring physical delivery of
select commodity products, speculation and arbitrage. The
majority of our trading volume is financially settled, meaning
that settlement is made through cash payments based on the value
of the underlying commodity, rather than through physical
delivery of the commodity itself.
We operate our business in two distinct markets: futures markets
and OTC markets. Futures markets offer trading in standardized
derivative contracts on a regulated exchange and OTC markets
offer trading in over-the-counter derivative contracts,
including contracts that provide for the physical delivery of an
underlying commodity and contracts that provide for financial
settlement based on the prices of underlying commodities. All
futures and cleared OTC contracts are cleared through a central
clearinghouse. We offer OTC contracts that can be traded on a
bilateral basis and certain OTC contracts that can be traded on
a cleared basis. Bilateral contracts are settled between
counterparties, while cleared contracts are novated to a third
party clearinghouse, where they are marked to market and
margined daily before final settlement at expiration.
We operate our futures markets through our subsidiary, the IPE,
a Recognized Investment Exchange, or RIE, based in London,
and currently offer trading both on our electronic platform and
on our open-outcry trading floor. We operate our OTC markets
exclusively on our electronic platform. In addition to trade
execution, our electronic platform offers a comprehensive suite
of trading-related services, including electronic trade
confirmation, access to clearing services and risk management
functionality. Our trading-related services are designed to
support the trading operations of our participants. Through our
electronic platform, we are able to facilitate straight-through
processing of trades, and to provide seamless integration of
front-, back- and mid-office trading activities. We also offer a
variety of market data services for both the futures and OTC
markets.
To take advantage of the increasing acceptance and adoption of
electronic trading, and to maintain and enhance our competitive
position, we recently announced our intention to close our
open-outcry trading floor in London on April 7, 2005.
Thereafter, all futures trading will be conducted exclusively on
our electronic platform. For a discussion of this announcement
and the strategic and financial benefits we expect to achieve,
see "— Recent Developments".
The following diagram illustrates the range of services we are
able to offer through our electronic platform:
87
Futures Business
We conduct our futures business through our subsidiary, the IPE.
The IPE operates as an RIE in the United Kingdom, where it is
regulated by the FSA. The IPE was founded in 1980 as a
traditional open-outcry auction market by a group of leading
energy and trading companies. Only exchange members may execute
trades in our futures markets, for their own or others'
account. Our members and their participants include many of the
world's largest energy companies and leading financial
institutions.
In our futures markets, we offer trading in the IPE Brent Crude
futures contract, a benchmark contract relied upon by certain
large oil producing nations to price their oil production. This
contract is the leading benchmark for pricing crude oil produced
and traded outside of the United States, and for pricing a
majority of the world's traded oil products. We believe
that market participants are increasingly relying on the IPE
Brent Crude contract for their hedging and risk management
activities, as evidenced by steady increases in traded volumes
over the past several years. In 2004, the average daily volume
in our futures markets in Brent Crude was approximately
100 million barrels of oil with an average daily notional
value of over $3.7 billion.
We earn fees from both parties to each futures contract (or
option on a futures contract) traded in our markets, based on
the number of contracts traded. Exchange fees earned from
contracts traded in our futures markets were $45.5 million
in 2004, representing 42.0% of our consolidated revenues, and
$40.0 million in 2003, representing 42.6% of our
consolidated revenues. We derived revenues from the provision of
market data services of $6.3 million, or 5.8% of our
consolidated revenues for 2004, and $6.3 million, or 6.7%
of our consolidated revenues in 2003. In 2004, over
35.5 million contracts were traded in our futures markets,
representing a 6.6% increase as compared to 33.3 million
contracts traded in 2003. For the period from November 1,
2004 through February 28, 2005, 26.9% of our futures
trading volume in the IPE Brent Crude futures contract was
executed electronically.
OTC Business
In our OTC business, we operate OTC markets through our globally
accessible electronic platform. We offer trading in thousands of
OTC contracts, which cover a broad range of energy products and
contract types. These products include derivative contracts as
well as contracts that provide for physical delivery of the
underlying commodity, in each case principally relating to
natural gas, power and oil. We are able to offer a wide
selection of derivative contracts in our OTC markets due to the
availability of various combinations of commodities, product
types, "hub" locations and term or settlement dates
for a given contract.
Our participants, representing many of the world's largest
energy companies and leading financial institutions, as well as
proprietary trading firms, natural gas distribution companies
and utilities, rely on our platform for price discovery, hedging
and risk management. As of February 28, 2005, we had over
4,900 active screens at over 890 OTC participant
firms, and on a typical trading day, over 3,600 individual
screen users connect to our platform for trading, risk
management and price discovery.
In order to provide participants with access to centralized
clearing and settlement, we launched the industry's first
cleared natural gas and oil OTC products in March 2002, and
introduced our first cleared OTC power contracts in November
2003. Our most liquid OTC markets include contracts that can be
traded bilaterally or cleared. In 2004, 31.0 million
contracts were traded in our OTC markets with an aggregate
notional value of $536.8 billion, of which
18.1 million contracts were cleared, representing
$300.7 billion in notional value.
Revenues in our OTC business are generated primarily through
commission fees earned for trades executed on our platform and
for the provision of OTC market data and electronic trade
confirmation services. While we charge a monthly minimum
commission fee for access to our platform, we derive a
substantial portion of our OTC revenues from commission fees
paid for trade execution in excess of the monthly minimum volume
requirements. Our OTC commission rates vary by product and
contract, and we charge a fixed commission rate based on the
volume of commodity underlying the contract traded. For example,
power is traded in units of megawatt hours — on
average, one megawatt hour would supply power to approximately
1,000 homes for approximately one hour. Commission fees are
payable by both parties to a contract and, for
88
bilateral trades, are due generally within 30 days of the
invoice date. For cleared OTC contracts, LCH.Clearnet collects
our commission fees as they are incurred and pays us monthly. We
do not risk our own capital in transactions or extend credit to
market participants.
We derived commission fees for OTC trades executed on our
electronic platform of $43.5 million in 2004, or 40.2% of
our consolidated revenues, and $34.2 million in 2003,
representing 36.5% of our consolidated revenues. We derived
revenues from the provision of market data services of
$3.4 million, representing 3.1% of our consolidated
revenues in 2004, and $1.4 million, or 1.5% of our
consolidated revenues in 2003.
We have significantly broadened and diversified our participant
base since our inception. In the past, our Initial Shareholders
and the Gas and Power Firms were both our principal shareholders
and the principal users of our electronic platform. The total
commission fee revenues earned from these firms and our other
shareholders accounted for 25.1%, 40.4% and 61.2% of our total
OTC commission fee revenues, in 2004, 2003 and 2002,
respectively.
Our Competitive Strengths
We have established ourselves as the leading marketplace for
global futures and OTC energy commodities trading by leveraging
a number of key strengths, including:
•
highly liquid global markets and benchmark contracts;
•
leading electronic energy trading platform;
•
integrated access to futures and OTC markets;
•
highly scalable, proven technology infrastructure;
•
transparency and independence;
•
strong value proposition; and
•
strong management team.
Highly Liquid Global Markets and Benchmark
    Contracts
We offer liquid markets in a number of the most actively traded
global energy commodities products. We operate the leading
market for trading in Brent Crude futures. The IPE Brent Crude
futures contract is the leading benchmark for pricing crude oil
produced and consumed outside of the United States, and for
pricing a majority of the world's traded oil products. We
also operate the leading market for trading in cleared OTC Henry
Hub natural gas contracts, with 17.0 million contracts
traded in 2004. Henry Hub natural gas markets are the most
liquid natural gas markets in North America. We believe that our
introduction of cleared OTC products has enabled us to attract
significant liquidity in the OTC markets we operate.
The following table shows the notional value and number of
commodities futures contracts traded in our futures markets (for
both open-outcry and electronic trading). The notional value of
contracts represents the aggregate value of the underlying
commodities covered by the contracts.
Year Ended December 31,
2004
2003
Number of
Number of
Contracts
Notional Value
Contracts
Notional Value
(in thousands)
(in billions)
(in thousands)
(in billions)
IPE Brent Crude futures
25,458
$
955.3
24,013
$
665.7
IPE Gas Oil futures
9,356
318.4
8,430
208.2
IPE Natural Gas futures
649
33.7
815
27.2
89
The following table shows the notional value and number of OTC
commodities contracts traded on our electronic platform in our
most significant OTC markets:
Year Ended December 31,
2004
2003
Number of
Number of
Contracts
Notional Value
Contracts
Notional Value
(in thousands)
(in billions)
(in thousands)
(in billions)
North American natural gas
25,574
$
388.2
13,703
$
186.4
North American power
1,700
62.5
848
26.7
Global oil
3,580
62.3
6,636
71.3
Leading Electronic Energy Trading Platform
Our leading electronic trading platform provides centralized and
direct access to trade execution and real-time price discovery.
We operate our OTC markets exclusively on our electronic
platform and have accelerated full transition of our futures
markets to electronic trading. Our electronic platform has
enabled us to attract significant liquidity from traditional
market participants as well as new market entrants seeking the
efficiencies and ease of execution offered by electronic
trading. We have developed a significant global presence with
approximately 4,900 active trading screens at over
890 OTC participant firms and over 140 futures
participant firms as of February 28, 2005.
Integrated Access to Futures and OTC Markets
We attribute the growth in our business in part to our ability
to offer market participants integrated access to futures and
OTC markets. Our integrated and electronic business model allows
us to respond rapidly to our participants' needs, changing
market conditions and evolving trends in the markets for energy
commodities trading. We believe that our demonstrated ability to
develop and launch new products for both the futures and OTC
markets provides us with several competitive advantages,
including:
•
Multi-Product Trading:
We operate a globally accessible
    platform that offers a seamless interface between trading in
    futures products and options on those products, as well as a
    broad range of OTC products. By offering trading in multiple
    markets and products we provide our participants with maximum
    flexibility to implement their trading and risk management
    strategies.
•
Multiple Access Options:
Our participants can access our
    marketplace through a variety of means, including through our
    Internet-based electronic trading platform, proprietary
    front-end systems, ISVs, and brokerage firms. ISVs allow market
    participants to access multiple exchanges through a single
    interface, which is integrated with the participants' risk
    management systems.
•
Cleared and Bilateral OTC Trading:
In March 2002, we were
    the first market to introduce cleared OTC energy contracts. We
    believe that the introduction of cleared energy contracts in the
    OTC markets we operate has attracted new participants to our
    markets by reducing bilateral credit risk and administrative
    burdens and by improving capital efficiency. Today, our
    participants can trade bilateral and cleared contracts
    side-by-side on our platform.
Highly Scalable, Proven Technology Infrastructure
Our Internet-based electronic trading platform provides rapid
trade execution and is, we believe, one of the world's most
flexible, efficient and secure systems for commodities trading.
We have designed our platform to be highly scalable, meaning
that we can expand capacity and add new products and
functionality efficiently, at relatively low cost and without
disruption to our markets. Trades on our platform are executed
on average in 250 milliseconds, or one quarter of a second,
compared to up to a minute or more for execution of an order
through a traditional voice broker. Our platform can also be
adapted and leveraged for use in other markets, as demonstrated
by the decision of the Chicago Climate Exchange, or CCX, to
operate its emissions-trading
90
market on our platform. We believe that our commitment to using
technology to develop our platform will continue to contribute
to the growth and development of our business.
Transparency and Independence
We offer market participants price transparency, meaning a
complete view of the depth and liquidity of our markets, through
our electronic platform. This is in contrast to the lack of
transparency of many open-outcry exchanges and voice-brokered
markets. All participant orders placed on our platform are
executed in the order in which they are received, ensuring that
all orders receive equal execution priority. In addition, the
transparency of our platform facilitates market regulation
through increased market visibility and the generation of
complete records of all transactions executed in our markets.
In contrast to many of our competitors, our company is governed
independently and impartially and in a manner intended to
promote shareholder value and the operation of fair and
efficient markets. We believe that this governance structure
provides us with greater flexibility to launch new products and
services, and evaluate and pursue growth opportunities while
ensuring impartial treatment for our participants. In addition,
we do not participate as a principal in any trading activities,
which allows us to avoid potential conflicts of interest that
could arise from engaging in trading activities while operating
our marketplace.
Strong Value Proposition
We believe that, by using our electronic platform, market
participants can achieve price improvement over alternate means
of trading. Electronic trade execution offers cost efficiencies
by providing firm posted prices and reducing trade-processing
errors and back office overhead, and allows us to accelerate the
introduction of new products on our platform. The combination of
electronic trade execution and integrated trading and market
data services facilitates automation by our participants of all
phases of trade execution and processing from front-office to
back-office, and ranging from trading and risk management to
settlement. In addition, in our futures business, we offer
substantially lower membership fees than those required to join
other exchanges. For example, as of March 2005, the price of
membership, or a seat, on NYMEX was $1.82 million, while
the prevailing price of a CBOT membership was
$1.36 million. In contrast, members of our futures exchange
are only required to pay membership fees of up to a maximum of
£6,000 per annum, or approximately $11,500.
Strong Management Team
Our management team has on average over 19 years of
experience in the energy and financial services sectors. Our
founding management team includes Jeffrey C. Sprecher, our
chairman and chief executive officer, Charles A. Vice, our chief
operating officer, and Edwin Marcial, our chief technology
officer. We enhanced our management team with additional
noteworthy professionals, including Richard V. Spencer, our
chief financial officer, and David S. Goone, our head of
business development and sales. We later integrated the
managerial talent of Dr. Richard Ward, the IPE's chief
executive officer, following our acquisition of the IPE. Our
management team has successfully developed and deployed our
electronic platform, integrated the IPE into our business,
developed and launched our electronic trade confirmation system
and introduced the industry's first cleared OTC energy
contracts. We believe that the proven strength and experience of
our management team will continue to provide us with a
competitive advantage in executing our business strategy.
Our Growth Strategy
We seek to advance our leadership position by focusing our
efforts on the following key strategies for growth:
•
attract new market participants;
•
increase connectivity to our marketplace;
•
expand our market data business;
91
•
develop new trading products and services; and
•
pursue select strategic opportunities.
Attract New Market Participants
In recent years, our customer base has expanded and diversified
due to the emergence of new participants in the energy
commodities markets. These new participants include financial
services companies, such as investment banks, hedge funds,
proprietary trading firms and asset managers, as well as
industrial businesses that are increasingly engaging in hedging,
trading and risk management strategies. Many of these
participants have been attracted to the energy markets in part
due to the availability of electronic trading, primarily through
our platform. We intend to continue to expand our participant
base by targeting these and other new market participants and by
offering electronic trade execution and processing capabilities
that appeal to a broad range of market participants.
Increase Connectivity to Our Marketplace
Our participants may access our electronic platform for trading
in our futures markets through our own Internet-based front-end
or through the front-end systems developed by any of seven ISVs.
These represent a substantial portion of the ISVs that serve the
commodities futures markets. Furthermore, participants in our
futures markets can access our platform directly through their
own proprietary interfaces or through a number of brokerage
firms. Participants may access our OTC markets through our
Internet-based front-end or, in the case of some of our most
liquid markets, through a leading ISV. We intend to extend our
initiatives in this area by continuing to establish multiple
points of access with our existing and prospective market
participants.
Expand Our Market Data Business
We will continue to leverage the value of the market data
derived from our trade execution, clearing and confirmation
system by developing enhancements to our existing information
services and creating new market data products. For example, in
2004, we introduced our Market Price Validation, or MPV,
service, an information service that provides a means for
subscribers to mark to market their month-end portfolios. We
also publish daily transaction-based indices for the North
American spot natural gas and power markets based on data
collected from trading activity on our platform. In addition, we
sell real-time and historical futures quotes and other futures
market data through 43 data vendors that distribute this
information, directly and through various sub-vendors, to
approximately 19,000 subscribers. We believe that the database
of information generated by our platform serves as the single
largest repository of energy market data in North America. As a
result of the breadth of our global data offerings, we believe
that we are well positioned to meet the growing demand for
increased availability of energy market data.
Develop New Trading Products and Services
We continually develop and launch new products designed to meet
market demand and the needs of our participants. In 2004, we
launched two new electronically-traded futures contracts for
U.K. power, and we, together with the European Climate Exchange,
or ECX, plan to launch a futures contract on our platform in
2005 based on allowances issued under a government-sponsored
program designed to control and reduce greenhouse gas emissions.
During the past three years, we successfully launched over
25 new cleared OTC contracts, and we currently plan to
introduce new products at a similar rate going forward. In
particular, we believe there is an opportunity to increase
electronic trading in oil contracts, since historically only a
small percentage of all OTC oil trades have been executed
electronically. We also intend to continue to introduce
bilateral OTC contracts in less liquid, or niche, markets to
satisfy the specific needs of our participants as they arise. We
may also seek to license our platform to other exchanges for the
operation of their market on our platform, as we have with ECX
and CCX.
92
Pursue Select Strategic Opportunities
We intend to pursue strategic acquisitions and alliances that
will enable us to supplement our internal growth, expand our
trading products and related services, advance our technology
and take advantage of new developments in the markets for energy
commodities trading. We focus on these key evaluation criteria
when identifying and assessing potential strategic transactions.
Recent Developments
On March 7, 2005, we announced our intention to close our
open-outcry trading floor in London, effective April 7,
2005. Thereafter, all futures trading will be conducted
exclusively on our electronic platform. Our decision was made to
take advantage of the increasing acceptance and adoption of
electronic trading and to maintain and enhance our competitive
position in our futures markets. Since 2002, we have
progressively transitioned our futures markets to electronic
trading, and in November 2004 we closed the morning session for
floor-based trading in the IPE Brent Crude futures contract and
began offering trading in that contract during that session
exclusively on our electronic platform. The full transition of
all futures trading to our platform represents an acceleration
of our strategy to develop an integrated electronic marketplace
for side-by-side trading in both futures and OTC markets.
We believe that electronic trading offers substantial benefits
to our market participants. By using our electronic platform, in
contrast to alternate means of trade execution, market
participants are able to achieve price improvement and cost
efficiencies through greater transparency and firm posted
prices, reduced trading errors and the elimination of market
intermediaries. In addition to these benefits, electronic
trading offers operational, technological and regulatory
benefits that we believe will make our markets more attractive
to market participants. For a more detailed discussion of the
advantages of electronic trading, please refer to "Industry
Overview — Industry Trends — Growth in
Electronic Trading".
We expect to achieve cost savings ranging from $6.0 million
to $9.0 million per annum on an ongoing basis in connection
with our decision to close the trading floor, although in the
near term any cost savings will be offset by a charge we expect
to take primarily in the second quarter of 2005 ranging from
$6.0 million to $8.0 million. Furthermore, because our
electronic platform can accommodate substantially greater
trading volumes, and the cost of operating our platform is
largely fixed, we expect to benefit from increased operating
leverage in our futures business.
Our Products and Services
We seek to provide our participants with centralized and direct
access to the futures and OTC markets for energy
commodities and derivatives trading as well as access to
services that support their trading activities. The primary
services we provide are electronic price discovery, trade
execution and trade processing. We also offer a broad range of
market data services for the futures and OTC markets.
Futures Trading
We offer trading in futures contracts and options on those
contracts through our subsidiary, the IPE. These include the IPE
Brent Crude futures contract, the IPE Gas Oil futures
contract, the Natural Gas futures contract, UK Power
futures contracts, and options based on the IPE Brent Crude
and Gas Oil futures contracts. The IPE Brent Crude futures
contract is based on forward delivery of the Brent grade of
crude oil and is used as a benchmark to price a majority of the
world's traded oil products. The IPE Gas Oil futures
contract is a European heating oil contract and serves as a
significant pricing benchmark for refined oil products in Europe
and Asia.
Our futures markets are highly regulated. As an RIE, the IPE is
responsible for carrying out certain regulatory and surveillance
functions. The IPE has its own regulatory, compliance and market
supervision functions, as well as a framework for disciplining
market participants who do not comply with exchange rules. Any
information that the IPE obtains in its regulatory capacity is
confidential. Trading in our futures markets
93
is segregated on our platform from our OTC markets, and access
requirements make clear the distinction between our futures and
OTC markets.
We offer electronic trading in each of the products offered in
our futures markets and will offer electronic trading
exclusively in our futures business following the closure of the
open-outcry floor. The percentage of trades in our IPE Brent
Crude futures contract executed on our electronic platform
increased to an average of 26.9% of the total IPE Brent Crude
volumes traded from November 1, 2004 through
February 28, 2005 as the result of the introduction of an
exclusive electronic morning session on November 1, 2004.
We provide access to trading in our futures contracts and
options on futures contracts on our electronic platform from
2:00 a.m. on Monday until 10:00 p.m. on Thursday, and
from 2:00 a.m. until 8:30 p.m. on Friday (GMT).
Electronic trading of our futures products is available to
members and their participants. The electronic membership in our
futures business runs in parallel to the membership structure
for floor trading, and is discussed in more detail under
"— Our Participant Base — Futures
Business Participant Base — IPE Membership".
Following the migration of our remaining open-outcry futures
trading activity to our electronic platform and the closure of
the exchange floor, our futures membership structure will
consist solely of members eligible to trade electronically.
Members may access our trading platform directly via the
Internet or an ISV. Customers of our members may obtain
order-routing access to our markets through members. Once trades
are executed on our platform, they are matched and forwarded to
a trade registration system that routes them to LCH.Clearnet for
clearing and settlement. Electronic trading allows some
participants who might traditionally have transmitted orders by
telephone to a broker to execute their orders electronically.
However, participants may also continue to use the services of a
broker.
We have taken a number of steps to increase the accessibility
and connectivity of our electronic platform, including opening
our electronic platform to ISVs. Futures traders use either our
platform, or a front-end system provided by an ISV or an IPE
member for the purpose of accessing our futures markets.
ISVs' systems are linked to our electronic platform via our
open application programming interfaces, or APIs. Our
participants can currently access our platform using seven ISVs.
We do not depend on the services of any one ISV for access to a
significant portion of our participant base.
We have made a number of additions to the functionality of our
electronic platform in order to facilitate trading in futures
contracts, including spread functionality, which allows trades
of certain types to imply prices from one contract month to
another, and the development of administrative and monitoring
tools for use by our staff.
OTC Trading
Our electronic platform offers real-time access to, and
transparency of, the liquidity in our OTC markets —
that is the complete range of bids, offers and volumes posted on
our electronic platform. Our platform displays a live ticker for
all contracts traded in our OTC markets and provides information
relating to each trade, such as the cumulative weighted average
price and transacted volumes by contract. We offer fast, secure
and anonymous trade execution services, which we believe
generally are offered at a lower cost compared with traditional
means of execution.
Our electronic platform provides trade execution on the basis of
extensive, real-time price data where trades are processed
accurately, rapidly and at minimal cost. We have designed our
electronic platform to ensure the secure, high-speed flow of
data from trading desks through the various stages of trade
processing. We believe that the broad availability of real-time
OTC energy market access and data, together with the
availability of cleared OTC contracts at the same price as
bilateral products, has allowed us to achieve a critical mass of
liquidity in our OTC markets.
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The following diagram illustrates the processing of an OTC trade
from order entry to recording in a company's risk
management system. This process typically occurs within a matter
of seconds.
OTC Products Overview.
We offer market
participants a wide selection of derivative contracts, as well
as contracts for physical delivery of commodities, to satisfy
their trading objectives, whether they relate to risk
management, asset allocation, physical consumption or
production, speculation or arbitrage. We offer trading in over
13,600 unique contracts as a result of the availability of
various combinations of products, locations and
strips — meaning the duration or settlement date of
the contract. Excluding the strip element, over 740 unique
contracts based on products and hub locations were traded in our
OTC market in 2004. A substantial portion of the trading volume
in our OTC markets relates to approximately 15-20 highly
liquid contracts in natural gas, power and oil. For these
contracts, the highest degree of market liquidity resides in the
prompt, or front month, contracts, whereas that liquidity is
reduced for contracts with settlement dates further out, or the
"back months".
In addition, we offer trading in a wide range of complementary
niche contracts. The scalability and flexible structure of our
electronic trading platform makes the introduction of these
contracts quick, efficient and relatively low cost. Our platform
also allows us to offer the high degree of customization that
the OTC participant demands to satisfy requirements and
preferences.
We characterize the range of instruments that participants may
trade in our markets in this prospectus by reference to type of
commodity (such as global oil, North American power, North
American gas, etc.), products (such as forwards and swaps,
differentials and spreads, and OTC options) and contracts
(meaning products specified by delivery dates). For a discussion
of these instruments generally, see "Industry
Overview". The OTC products available for trading in our
markets fall into the following general contract types:
•
Forwards and Swaps:
We offer forward contracts on
    products in the following commodities: North American power,
    European power and global precious metals. We offer swaps in the
    following commodities: global oil, North American power, North
    American gas, European gas and European power.
•
Differentials and Spreads:
We offer basis trades in
    various natural gas markets, such as the Chicago pipeline basis
    swap (settled against the NGI index). We offer spreads in the
    following commodities markets: global oil, and North American
    natural gas and power.
•
OTC Options:
We offer options on contracts in the
    following commodities: oil and North American gas.
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The following table indicates the number of unique commodities,
products and contracts traded in our OTC business for the
periods presented:
Year Ended December 31,
2004
2003
2002
Commodities markets traded(1)
9
10
17
Products traded
742
721
731
Contracts traded
13,654
13,812
23,669
(1)
There is currently little to no liquidity in the commodities
    markets for physical global oil, physical and financial North
    American coal, North American emissions, North American weather
    and physical and financial North American natural gas liquids on
    our platform.
Cleared OTC Contracts.
We developed the concept of
cleared OTC energy contracts, which provide participants with
access to centralized clearing and settlement arrangements
through LCH.Clearnet. We launched the first cleared OTC natural
gas and oil contracts in March 2002 and our first cleared OTC
power contracts in November 2003. As of February 2005, we listed
7 cleared natural gas contracts, 15 cleared power contracts and
5 cleared oil contracts, all of which are financially settled.
Transaction fees derived from trade execution in cleared OTC
contracts represented 44.5% of our total OTC revenues in 2004,
net of intersegment fees.
The introduction of cleared OTC contracts has reduced the amount
of capital our participants are required to post on each OTC
trade, as well as the resources required to enter into multiple
negotiated bilateral settlement agreements to enable trading
with other counterparties. In addition, the availability of
clearing through LCH.Clearnet for both OTC and futures contracts
traded in our markets enables our participants to cross-margin
their futures and OTC positions — meaning that a
participant's position in its futures or OTC trades can be
offset against each other, thereby reducing the total amount of
capital the participant must deposit with the FCM clearing
member of LCH.Clearnet.
OTC contracts are available for trading on the same screen and
are traded in the same price stream, and are charged the same
commission rate, as bilaterally traded contracts. In a cleared
OTC transaction, LCH.Clearnet acts as the counterparty for each
side to the trade, thereby reducing counterparty credit risk in
the traditional principal-to-principal OTC markets. However,
participants to cleared trades also pay a clearing fee directly
to LCH.Clearnet and to an FCM. There are currently 24 FCMs
clearing transactions for approximately 960 screens active in
our cleared OTC markets. Participants have the option to trade
on a
96
bilateral basis with the counterparty to avoid paying fees to
LCH.Clearnet and an FCM subject to the availability of bilateral
credit with the counterparty. While we derive no revenue
directly from providing access to these clearing services, we
believe the availability of clearing services and attendant
improved capital efficiency has attracted new participants to
the markets for energy commodities trading.
We extended the availability of our cleared OTC contracts to
voice brokers in our industry through our block trading
facility, which was launched in March 2004. Block trades are
those trades executed in the voice broker market, typically over
the telephone, and then transmitted to us electronically for
clearing. We charge 50% of our standard commission fee for block
trades. We believe that our block trading facility is a growing
part of our cleared business as it serves to expand our open
interest. As of February 28, 2005, open interest in our
cleared OTC contracts was 1.3 million contracts in North
American natural gas and power and global oil. Open interest
refers to the total number of contracts that are currently
open — in other words, contracts that have been traded
but not yet liquidated by either an offsetting trade, exercise,
expiration or assignment.
The following tables present:
•
the number of cleared OTC Henry Hub natural gas contracts traded
    for the periods presented on our electronic platform compared
    with NYMEX-ClearPort; and
•
the number of cleared PJM financial power contracts traded for
    the periods presented on our electronic platform compared with
    NYMEX-ClearPort.
OTC Trade Execution Services
We offer a broad range of automated OTC trade execution
services, including straight-through trade processing, risk
management functionality and electronic trade confirmation.
Automated Trade Execution Services —
Straight-Through Trade Processing.
Our electronic
platform offers the following features:
•
Viewing Live Markets:
Traders may view all live, firm
    quotes posted by other traders in our markets. These quotes are
    arranged on the screen first by price and then, if two quotes
    are posted at the same price, by their time of entry. All
    participants are able to view the same market information,
    although individual participants may also customize the
    presentation of this information.
•
Counterparty Credit Screening:
Quotes visible to a
    participant's traders on the screen are color-coded. One
    color indicates that quotes have originated from parties other
    than that participant. Another color indicates whether or not
    particular quotes meet the credit criteria established by the
    participant's risk management personnel.
•
Instant Messaging:
Our instant messaging service allows
    participants to communicate directly with others in our markets
    on a secure, anonymous and real-time basis. For example,
    participants may use instant messaging to seek additional
    capacity from a party offering a product that they need.
•
Simple Click Execution:
Traders may act on a bid or an
    offer with one or more clicks of a mouse or use of a shortcut
    key programmable set-up. Our electronic platform also
    facilitates the implementation
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of sophisticated, multi-target trading techniques. Traders may
    sweep the market, or conduct a broad yet targeted search, for
    quotes of a certain price or quantity. This enables them to act
    on multiple bids or offers at one time. In addition, traders may
    link two orders, arranging, for example, to cancel a second
    order automatically when the first is executed.
•
Order Matching:
Once an order is placed by a
    participant's trader, it is automatically matched with a
    quote meeting the participant's credit criteria at the best
    available price. If there are two quotes at the same price,
    priority goes to the one that was entered first. Orders are
    matched on an anonymous basis.
•
Application Programming Interfaces:
Our application
    programming interfaces, or APIs, allow participants to build
    their own customized front office trading systems, which can be
    linked to our platform, thereby enabling high speed data flow to
    their trading desk and back through to their risk management,
    settlement and accounting systems.
•
Automated Spreadsheet Trading:
Participants may send
    orders to, and execute trades on, our platform using their own
    proprietary formulas and strategies without the use of our APIs
    or any code level programming.
•
Trade Reporting:
A confirmation is automatically
    transmitted to each party to a trade. Traders may elect to have
    these confirmations automatically printed. They may also elect
    to send the confirmations automatically to a computer file,
    enabling direct, paperless communication between a
    participant's front and back offices.
•
Order Monitoring and Deal Surveys:
Traders are able to
    monitor and manage the status of all bids and offers that they
    have entered on our platform. Traders and others at a
    participant company are also able to view and print
    comprehensive survey reports of trades executed by a trader or
    by all traders within their company. This facilitates
    communication between a participant's front and mid-offices.
•
Electronic Invoicing:
Our platform generates electronic
    invoices detailing the fees and trading commissions due from
    each participant. Participants can choose to view and receive
    invoice data at any time of the month. This reduces paper
    handling and the risk of human error. It also affords our
    participants greater flexibility in storing and using this
    information and promotes greater back office efficiency.
Electronic Trade Confirmation Services.
Our
electronic trade confirmation system is accessible through our
website or through our APIs and offers market participants a
reliable, low-cost automated alternative to manual trade
verification and confirmation. When trading on a traditional
exchange or through OTC voice brokers, market participants
typically manually prepare and exchange paper confirmations
evidencing a trade following execution in order to create a
legal record of the trade. Both participants and third parties
may use this service to confirm trades in products commonly
traded in the energy and metals markets. Our electronic trade
confirmation service accepts data from trades executed on our
platform, through other exchanges or trading facilities or
through OTC voice brokers.
We believe that this process tends to result in increased back
office costs, delay and risk of human error. Our electronic
trade confirmation service reviews electronic trade data
received from individual traders, screens and matches this data
electronically, then highlights any discrepancies in a report to
the traders' respective back offices. This allows back
office personnel to focus primarily on those trades that require
correction and verification, rather than also reviewing the
larger percentage of trades without discrepancies. If
discrepancies arise, they may be resolved between the
counterparties, after which an electronic confirmation of the
trade is issued. Where no discrepancies are reported, use of
this service eliminates the need for telephonic verification of
trade data. Participants using this service may elect to use
this confirmation as the official record of the transaction in
place of the fax or telex traditionally generated by
participants' back offices.
We believe that the convenience and cost savings offered by our
electronic trade confirmation service could attract new
participants to our platform, increasing the revenues that we
derive from transaction fees.
OTC Risk Management Functionality.
One of the
features of our platform is its risk management functionality.
Trades in the OTC commodities markets have historically been
executed as bilateral contracts in
98
which each counterparty bears the credit and/or delivery risk of
the other and typically requires that an existing bilateral
Master Agreement be in place with the other counterparty.
Participants may pre-approve trading counterparties and
establish parameters for trading with each counterparty in
advance of doing so, thereby enforcing internal risk management
policies. Participants may set firm-wide limits on tenor
(duration) and the total daily value of trades that its traders
may conduct with a particular counterparty, in a particular
market. In addition, participants are offered a limited view of
the parameters established for that participant by other market
participants and may negotiate in real-time with potential
counterparties through our instant messaging service. We do not
assess the creditworthiness of, or determine trading parameters
for, any participant that trades on our platform and we do not
derive revenues directly from our credit management tools.
OTC and Futures Market Data
The 10x Group, or 10x, is our market data subsidiary. We
established 10x in 2002 in response to growing demand for
objective, transparent and verifiable energy market data.
Through 10x, we generate market information and indices based
solely upon auditable transaction data derived from data on
actual OTC trades executed in our markets. Therefore, this
information is not affected by subjective estimation or
selective polling, the methodologies that currently prevail in
the OTC markets. Each trading day, we deliver proprietary energy
market data directly from our OTC market to the desktops of
thousands of market participants. More specifically, we offer
the following data products and services:
•
ICE Daily Indices:
10x publishes ICE Daily Indices for
    our spot natural gas and power markets with respect to over 60
    of the most active gas hubs and 15 of the most active power hubs
    in North America. These indices are calculated based on the
    volume-weighted average price at each delivery point of all
    qualifying trades executed on our platform in accordance with
    guidelines we have set to provide for transparency in our index
    methodology. In contrast to other survey-based indices, all
    trades included in our indices can be observed by our
    participants, including regulators, as they occur. The ability
    to view the real-time creation of market indices encourages the
    use of the platform for trade execution for inclusion in the
    indices. 10x was recently recognized by FERC as the only
    publisher of natural gas and power indices to fully comply with
    all of the natural gas and power index publishing standards
    identified in the FERC Policy Statement on Price Indices. 10x
    transmits the ICE Daily Indices via e-mail to 7,500 energy
    industry participants on a complimentary basis each trading day.
    In the future, we may begin charging recipients for what we
    believe is increasingly valuable data.
•
View Only:
We offer view only access to market
    participants who are not active traders, but who still require
    access to real-time prices of physical and financial energy
    derivative contracts. Typical view only access subscribers
    include marketers, industrial end-users, utilities, analysts,
    municipalities and regulatory agencies.
•
End of Day Report:
The 10x End of Day Report, or EOD
    Report, is a comprehensive electronic summary of trading
    activity in our OTC markets. The report is published daily at
    3:00 p.m. EST and features indicative price statistics,
    such as last price, high price, low price, total volume, volume
    weighted average price, best bid, best offer, closing bid and
    closing offer, for all natural gas and power contracts that are
    traded or quoted on our platform. The EOD Report also provides a
    summary of every transaction, which includes the price, the
    timestamp and an indication of whether a bid was hit or an offer
    was lifted.
•
Market Price Validation Service:
10x Market Price
    Validation service, or MPV, provides independent, consensus
    forward curve and option values for long-dated (5-20 years)
    global energy contracts on a monthly basis. On the last business
    day of each month, MPV participant companies, representing the
    world's largest energy commodities trading entities, submit
    their month-end forward curve and option prices for over 200
    widely held global energy contracts, such as Henry Hub Natural
    Gas, Brent Crude, AECO Gas Basis, WTI Crude, Cinergy Peak Power
    and SP-15 Peak Power. We audit and average these submissions to
    create consensus forward curve and option values that are then
    published for the benefit of MPV participants. MPV participants
    use these consensus values to validate internal forward curves
    and mark-to-market their month-end portfolios in accordance with
    FASB and IAS recommendations concerning the treatment and
    valuation of energy derivative contracts.
99
We also sell real-time and historical futures quotes and other
futures market data derived from trading in our futures markets
through 43 data vendors. These vendors in turn distribute this
information, directly and through various sub-vendors, to
approximately 19,000 subscriber terminals. These vendors and
sub-vendors include Bloomberg, Reuters and Comstock. Through the
IPE's website, data related to our futures markets is also
available to subscribers of our EnergyLive service, and
historical market data is also available to subscribers.
Our operations generate an increasingly broad range of market
data, which we distribute on a real-time and historical basis.
In view of the automated way in which our electronic platform
gathers data from actual transactions, we believe that our data
is more precise, comprehensive and unbiased than most existing
sources of OTC commodities data. Subject to confidentiality
provisions, we generally retain all trade data collected through
our trade-execution, electronic trade confirmation and clearing
services. We believe that market participants value the depth
and precision of our market data and that this value is likely
to increase if our liquidity continues to grow. We are currently
exploring ways to realize the value of this raw data. We believe
our electronic platform comprises the single largest repository
in the world for energy commodities market data.
Our Participant Base
Futures Business Participant Base
Participants currently trade in our futures markets, either
directly as members or through a member. The participant base in
our futures business is globally dispersed, although we believe
a significant proportion of our participants are concentrated in
major financial centers in North America, the United Kingdom,
Continental Europe and Asia. We have obtained regulatory
clearance or received legal advice confirming that there is no
legal or regulatory impediment for the location of screens for
electronic trading in our futures markets in 28 countries,
including the United States, Singapore, Japan and most of the
member countries of the European Union. Memberships in our
futures markets increased by 13.0% in 2004 in response to the
addition of exclusive electronic trading hours and demand for an
electronically traded crude oil benchmark, our IPE Brent Crude
futures contract.
Like our OTC participant base, our participant base in our
futures business has grown significantly since we acquired the
IPE in 2001. The five most active clearing members of the IPE,
which handle cleared trades for their own accounts and on behalf
of their participants, accounted for 39.5%, 39.1% and 38.4% of
our futures business revenues, net of intersegment fees, in
2004, 2003 and 2002, respectively. One member accounted for
13.0%, 15.1% and 13.4% of our futures business revenues, net of
intersegment fees, in 2004, 2003 and 2002, respectively. No
other member accounted for more than 10% of our futures business
revenues for that period.
IPE Membership.
Trades in our futures markets may
only be executed in the name of an IPE member for its own or
others' accounts. Although we announced recently that we
will close our open-outcry trading floor, we currently maintain
parallel membership structures with respect to the simultaneous
operation of the physical exchange floor and our electronic
platform for trading in our futures markets. In order to become
an IPE member, an applicant must complete an application form,
undergo a due diligence review and execute an agreement stating
that it agrees to be bound by IPE regulations.
Members trading on the exchange floor fall into two categories:
floor members and local floor members. Floor members may trade
on the exchange floor on behalf of both members and non-members,
so long as the member firm is authorized by the FSA. Local
members may trade only for their own account or for the accounts
of other local or floor members. Participants who are members of
LCH.Clearnet may clear trades. Only floor members may clear
trades in their own name. Any member that does not clear its own
business must have a clearing arrangement with a member who is a
member of LCH.Clearnet and is able to clear trades.
All futures trades executed on our electronic platform are
overseen by or attributable to "responsible
individuals", or RIs. Each electronic member may register
one or more RIs, who are responsible for trading activities of
both the member and its customers, and who are accountable to
the IPE for the conduct of trades executed in the member's
name. There are currently 650 RIs registered in our futures
market.
100
OTC Business Participant Base
Our OTC participants include some of the world's largest
energy companies, financial institutions and other active
contributors to trading volume in global commodities markets.
They include oil and gas producers and refiners, power stations
and utilities, chemical companies, transportation companies,
banks, hedge funds and other energy industry participants. Our
participant base is global in breadth, with traders located in
22 countries. The five most active trading participants
together accounted for 21.4%, 25.1% and 38.1% of revenues
derived from our OTC business for 2004, 2003 and 2002,
respectively. Revenues from one participant that is active in
the OTC North American natural gas and power commodities
market accounted for 14.2% of revenues derived from our OTC
business for 2002. No participant accounted for more than 10% of
our OTC business revenues during 2004 or 2003.
Trading in our OTC markets is not restricted to members, as with
a traditional exchange. Rather, we generally accept as a
participant any party that qualifies as an exempt commercial
entity, or ECE. ECEs must satisfy certain asset-holding and
other criteria and include entities that, in connection with
their business, incur risks relating to a particular commodity
or have a demonstrable ability to make or take delivery of that
commodity, as well as financial institutions that provide
risk-management or hedging services to those entities. In
January 2003, we received approval from the CFTC that allows
registered traders and locals with floor or electronic trading
privileges on any regulated U.S. futures exchange to
qualify as ECEs and therefore to execute OTC transactions on our
platform. We also received approval in October 2004 from the
CFTC permitting the IPE's registered brokers and local
traders to transact in the OTC markets for their own accounts.
This has allowed IPE members and traders access to both the
futures markets and the OTC markets on one screen.
We require each participant to execute a participant agreement,
which governs the terms and conditions of our relationship with
each participant and grants the participant a non-exclusive,
non-transferable, revocable license to access our platform.
While, we generally establish the same contractual terms for all
of our users, in connection with our entry into new commodities
markets, we have from time to time agreed to minor modifications
to the terms of our participant agreement for trading in new
products. We expect that any future services that we may
introduce will also be covered by our participant agreement, as
we generally have a unilateral right to amend its terms with
advance notice. As the OTC markets mature and conventions
change, our participant agreement provides us with considerable
flexibility to manage our relationship with our participants on
an ongoing basis.
The data in the table below reflects the growth of our OTC
business participant base. This table indicates (i) the
total number of participants that have signed participant
agreements with us through the end of the periods presented,
(ii) the number of participants who have actually traded
during the periods presented, and (iii) the number of
desktop screens which logged onto our platform during the month
of December 2004. We believe that there are two main reasons why
some participants access our platform but do not participate in
trading. First, after participants register to use our
electronic platform, they cannot trade until they have
established either a clearing account or bilateral credit with
other participants. Second, we believe that some non-trading
participants use our platform to gain real-time, comprehensive
information regarding the commodities markets as well as to gain
reliable, accurate and full price discovery in these markets. We
regard these non-trading users of our platform as a valuable
potential source of revenues for our business both because such
users may choose to subscribe to other of our market data
services and because such users may in the future trade on our
platform.
As of and for the Year
Ended December 31,
2004
2003
2002
All participant firms (end of year)
861
774
776
Trading participant firms (end of year)
661
589
671
View Only participant firms (end of year)
200
185
105
Participant firms that executed a trade during the year
539
487
442
Active screen/user ID's (end of year)
4,812
4,575
5,228
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Product Development
We leverage both our technology infrastructure and software
development capabilities to diversify our products and services.
We are continually developing, evaluating and testing new
products for introduction in our futures and OTC businesses. Our
goal is to create innovative solutions in anticipation of, or in
response to, changing conditions in the markets for energy
commodities trading to better serve our expanding participant
base. We also seek to leverage our existing product base by
developing new applications for their use. In support of our
product development goals, we rely on the input of our product
development, clearing, technology and sales teams, who we
believe are positioned to discern and anticipate our
participants' needs. Where appropriate, we seek to protect
our intellectual property through patents and other forms of
intellectual property protection.
In the second half of 2005, we plan to introduce trading in
futures and spot contracts linked to E.U. Emissions Allowances
issued under the European Union's mandatory Emissions
Trading Scheme. These contracts will be offered in conjunction
with the European Climate Exchange, a subsidiary of CCX.
While we have historically developed all of our products and
services internally, we also periodically evaluate our strategic
relationships to try to identify whether any opportunities to
develop meaningful new products and services exist in
conjunction with third parties. If we believe our success will
be enhanced by collaboration with a third party, we will enter
into a licensing arrangement or other strategic relationship.
Technology
Technology is a key component of our overall strategy, and we
regard it as crucial to our success. Our operation of electronic
trading facilities for both futures and OTC markets has
influenced the design and implementation of the technologies
that support our operations. We currently employ a team of over
68 experienced technology specialists, including project
managers, system architects, software developers, performance
engineers, systems and quality analysts, database administrators
and website designers. We have established a track record of
operating a successful electronic trading platform by developing
and integrating multiple, evolving technologies that support
substantial trading volume. The integrated suite of technologies
that we employ has been designed to support a significant
expansion of our current business and provides us with the
ability to leverage our technology base into new markets and to
develop new products and services rapidly and reliably.
As trading activity has increased, we have continued to improve
matching engine performance and to add functionality as
appropriate as we make available to our participants trading in
new markets and product types. We have adopted a modular
approach to technology development and have engineered an
integrated set of solutions that support multiple specialized
markets. Significant investments in production planning, quality
assurance and certification processes have enhanced our ability
to expedite the delivery of the system enhancements that we
develop for our participants. Our electronic platform is
accessible from anywhere in the world via the Internet. We also
develop and operate other software components used to support
mid and back office services such as clearing, market data and
electronic confirmations. Our clearing infrastructure is
designed to be easily extendable to support integration with
additional clearing interfaces. We currently support clearing
integration to LCH.Clearnet, as well as to The Clearing
Corporation for the purposes of clearing and settling CCX
markets as part of our provision of services to CCX.
Speed, reliability, scalability, and capacity are critical
performance criteria for electronic trading platforms. Our
electronic platform was designed from the outset to be highly
scalable, enabling us to meet anticipated user growth as demand
increases. Currently, the average trading transaction time is
approximately 250 milliseconds, or one-quarter of a second.
A substantial portion of our operating budget is dedicated to
system design, development and operations in order to achieve
high levels of overall system performance. We continually
monitor and upgrade our capacity requirements and have
configured our systems to handle approximately twice our peak
transactions in our highest volume products. Approximately 3,200
participants currently access our platform simultaneously during
peak hours. We believe our electronic platform, which is
currently configured to support more than 5,000 simultaneous
users, will be sufficient to meet anticipated demand for the
foreseeable future.
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The technology systems supporting our trading operations can be
divided into four major categories:
Distribution
Technologies that support the ability of our participants to
    access our marketplace via the Internet or a direct connection
    to our platform.
Front-end functionality
Technologies that provide a robust graphical user interface, or
    GUI, APIs, and enable the delivery of other front-end tools.
Electronic trade matching
Technologies that aggregate orders and match buy and sell orders
    when their trade conditions are met.
Security and redundancy
Technologies that maximize and maintain the security of our
    markets, as well as provide for the transition to a redundant
    operating environment in the case of system failure caused by
    internal or external events.
Distribution
The accessibility of our platform via the Internet
differentiates our markets and serves to attract liquidity and
trading volume to our markets. As of February 28, 2005,
approximately 4,900 participants have active connections
directly to our platform, with further connections available
through seven ISVs. Most of these participants access our
electronic platform through high-speed Internet connections,
which are readily available and widely distributed throughout
North America, Europe and Asia. Over the past two years, as part
of our efforts to provide additional access choices to
participants, we implemented a program to connect conforming
ISVs to our platform. As a result, we now have the potential to
attract thousands of additional potential participants to our
platform through these ISVs.
Front-End Functionality
We provide secure access to our electronic platform via a GUI
known as WebICE. The WebICE GUI serves as a customizable,
feature rich front-end to our platform. Participants can access
our platform globally via the Internet by clicking on a link on
our website. Our platform can be accessed using a number of
operating systems, including Microsoft Windows 2000/XP, Linux
and Mac OS.
We selectively offer our participants use of APIs that allow
users to create customized applications and services around our
electronic platform to suit their specific needs. Participants
using APIs are able to link their internal computer systems to
our platform and enable high-speed data flow to their front
office trading systems, as well as their risk management, data
feed, settlement, and accounting systems. Our APIs also enable
ISVs to adapt their products to our platform, thereby offering
our participants a wide variety of front-end choices in addition
to our own user interface.
Electronic Trade Matching
Order matching constitutes the core of our electronic platform.
Our platform supports functionality for trading in bilateral
OTC, cleared OTC and futures and options contracts. Our core
functionality is available on a single platform for all of the
products that we offer, rendering it highly flexible and
relatively easy to maintain. As a result, enhancements made for
one product are also easily made for other products. Our order
matching functionality is designed based on a combination of
internal and external software and technology. Clustered Windows
2000 and Linux messaging servers act as a communications gateway
for our participants. Large scale enterprise servers provide the
processing capacity for the matching engine which captures price
requests by our participants and matches trades instantaneously
based on the order and price at which trades were entered.
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Security and Disaster Recovery
Physical and digital security are each critical to the operation
of our platform. At both our corporate offices as well as at all
of our data centers, physical access controls have been
instituted to restrict access to sensitive areas. We also employ
what we believe are state-of-the-art digital security technology
and processes, including high level encryption technology,
complex passwords, multiple firewalls, network level virus
detection, intrusion detection systems and secured servers.
We use a multi-tiered firewall scheme to control access to our
network. We have also incorporated several protective features
into our electronic platform at the application layers to ensure
the integrity of participant data and connectivity. For example,
we use access control profiles to prevent a given participant
from accessing data affiliated with another participant. We are
also able to restrict the functions that a particular user can
perform with any company data within a given application. Our
electronic platform monitors the connection with each user
connected to the platform. If a connection to a particular
participant can no longer be detected, certain outstanding
orders entered by that participant are automatically withdrawn
and held at the exchange. Users have the option to allow orders
to remain in the market after logging out or disconnecting from
our platform. In addition, even though our electronic platform
is globally accessible over the Internet, we are able to
restrict platform access to designated IP addresses, if so
desired by a participant.
In July 2002, we established a remote data center to provide a
point of redundancy for our trading technology. Our back-up
facility fully replicates our primary data center and is
designed to ensure the uninterrupted operation of our electronic
platform's functionality in the face of external threats,
unforeseen disasters or internal failures. In the event of an
emergency, participants connecting to our electronic platform
would be rerouted automatically to the back-up facility. Our
primary data center continuously collects and saves all trade
information and periodically transmits it to our back-up
facility. For that reason, we expect that our disaster recovery
system would have current, and in most cases real-time,
information in the event of a platform outage. In the event that
we were required to complete a changeover to our back-up
disaster facility, we anticipate that our platform would
experience approximately 60 minutes of down time.
We have received third-party assurances regarding the adequacy
and effectiveness of controls surrounding the platform's
operations and security. The examination, a Statement on
Auditing Standards No. 70 (SAS 70) Type II,
covers our trading platform and eConfirm trade confirmation
service. The SAS 70 examination standard was established by the
American Institute of Certified Public Accountants and is
internationally recognized as an in-depth examination of a
company's description of controls, their suitability of
design, and their operating effectiveness, which generally
include controls over information technology and processes. The
most recent Type II examination was performed by
PricewaterhouseCoopers LLP (to whom we outsource our internal
audit functions) and required the testing of our controls for
the period from April 1, 2004 through September 30,
2004. We also performed a Type II examination in 2003 and a
Type I and Type II examination in 2002, all of which
were performed by our independent registered public accounting
firm, Ernst & Young LLP.
The SAS 70 Type II examinations required testing of our
controls to provide reasonable assurance that system security
and other stated control objectives were satisfied. The subject
of the examination was our system and software controls,
including computer equipment, storage media, internal
documentation, physical and environmental protection measures,
and access to systems and data. In addition to reviewing
physical and logical security, the examination covered critical
management functions and procedures.
Support Services
All of our participants have access via e-mail and telephone to
our specialized help desk, which provides support with respect
to general technical, business and administrative questions, and
is staffed 24 hours a day from Sunday at 6:00 p.m.
until Friday at 6:00 p.m. At all other times, support
personnel are available to assist our participants via mobile
phone and e-mail. We utilize a third party system that tracks
inbound calls and e-mails to centralize issue reporting and
resolution tracking. Each week a summary of reported issues is
compiled and sent to operations management for review. In
addition, our participants may access training materials and
user guides which are available on our website.
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Technology Partners, Vendors and Suppliers
We maintain relationships with a range of technology partners,
vendors and suppliers in respect of clearing services, software
licensing, server leases, hosting facilities and electronic
trade routing.
If any of our contracts with our key technology partners, vendor
or suppliers were terminated, we believe that we would be able
to gain access on a timely basis to products and services of
comparable quality, on comparable terms.
Internally Developed Software
The current focus of our internal software development is in the
following areas:
•
enhancement of our existing platform to increase connectivity,
    functionality and performance in support of our plan to increase
    trading volumes in our markets and for the development of new
    products;
•
development of functional enhancements and performance
    improvements to our electronic trade confirmation
    service; and
•
development of technology infrastructure to support the emerging
    data sales component of our OTC business.
Competition
The markets in which we operate are highly competitive and we
expect competition to intensify in the future. We face
competition in all aspects of our business from a number of
different enterprises, both domestic and international,
including electronic platforms, traditional exchanges and voice
brokers. We compete on the basis of a number of factors,
including:
•
depth and liquidity of markets;
•
price transparency;
•
reliability and speed of trade execution and processing;
•
technological capabilities and innovation;
•
breadth of product range;
•
rate and quality of new product developments;
•
quality of service;
•
connectivity;
•
mid- and back- office service offerings, including
    differentiated and value-added services;
•
transaction costs; and
•
reputation.
Our Principal Competitors
Currently, our principal competitor is NYMEX. NYMEX is a
predominantly open-outcry commodities exchange for the trading
of energy futures contracts and options on futures contracts.
Among its primary products, NYMEX offers trading in its WTI
light sweet crude oil futures contract NYMEX has recently
developed a number of initiatives that compete with us, directly
or indirectly, including the following:
•
NYMEX has launched an open-outcry futures exchange located in
    Dublin, Ireland for the trading of a competing Brent Crude
    futures contract. According to NYMEX, this launch was a direct
    response to our decision to reduce the open-outcry trading hours
    for our IPE Brent Crude futures contract starting on
    November 1, 2004. As of February 28, 2005, open
    interest in the NYMEX Brent Crude futures contract was 15,893
    contracts, and during the month of February 2005, 30,716
    contracts were traded. This compares with open interest of
    351,673 contracts in respect of our IPE Brent Crude futures
    contract as of February 28, 2005 and traded volume in the
    month of February 2005 of 1,986,936 contracts.
105
•
NYMEX has announced its intention to establish a London-based
    open-outcry futures exchange during 2005 that would replace its
    Dublin operations and compete directly with our futures
    business. If NYMEX opens a London floor, it may expand its
    product offering beyond Brent Crude futures contracts to Brent
    options contracts and Gas Oil futures contracts and options on
    futures contracts, thereby directly competing with most of the
    IPE's products.
•
NYMEX amended its rules to permit traders on NYMEX to close
    positions in the IPE Brent Crude futures contract and
    simultaneously establish new positions in the NYMEX Brent Crude
    futures contract, without using either exchange's floor or
    electronic trading system. This effectively allows traders to
    transfer positions from us to NYMEX through a block transaction,
    which may promote the use of the NYMEX Brent Crude futures
    contract and increase the level of open interest in that
    contract to the detriment of open interest in the IPE Brent
    Crude futures contract.
•
NYMEX established its NYMEX Access electronic trading platform
    for futures in 1983. Since May 2002, NYMEX has been offering
    clearing services for OTC contracts via a facility known as
    ClearPort since May 2002. While these contracts are ultimately
    converted to futures contracts, they were termed by NYMEX at the
    time of their introduction to be "OTC products" and
    are blocked into NYMEX by voice brokers. The availability of
    these contracts has reduced reliance on floor-based execution
    and has strengthened the competitive position of voice brokers.
    NYMEX has listed over 100 contracts available for clearing
    through ClearPort.
In addition, we currently compete with:
•
voice brokers active in the commodities markets, including
    Amerex, ICAP, Prebon Yamane and Tradition (North America);
•
other electronic trading energy platforms, such as NGX (a
    subsidiary of the Toronto Stock Exchange), HoustonStreet and
    Bloomberg PowerMatch;
•
energy futures exchanges, such as European Energy Derivatives
    Exchange, or Endex (formerly known as Amsterdam Power Exchange),
    and Powernext; and
•
market data vendors, such as Bloomberg, Reuters, Argus and
    Platts (a division of The McGraw-Hill Companies Inc.).
Competition with Our Futures Business
In our futures business, we currently compete with NYMEX and
European natural gas and power exchanges. In the United States,
NYMEX lists the WTI crude oil futures contract, which competes
with the IPE Brent Crude futures contract as a benchmark for
worldwide trading in crude oil futures. There are also several
electronic exchanges in Europe that may, in the future, offer
trading in contracts that compete with ours. For example, both
CME and Euronext have stated publicly that they intend to enter
the markets for energy commodities trading.
In addition, the recent consolidation of, and development of
alliances between, European exchanges and clearinghouses has
resulted in increasingly large and well-capitalized trading
services providers. For example, in January 2004 the London
Clearing House merged with Clearnet SA. Continued consolidation
among trading services providers would likely require us to
compete in both our futures and OTC businesses against a smaller
number of firms with considerable resources and significant
market shares.
Competition with Our OTC Business
Other financial services or technology companies, in addition to
those named above, have entered the OTC electronic trading
services market. Additional joint ventures and consortia are
forming, or have been formed, to provide services similar to
those that we provide. Others may acquire the capacity to
compete with us through acquisitions. In particular, we expect
that existing, well-capitalized participants in the electronic
trading market for fixed income products and foreign exchange
products will seek out revenue opportunities in the commodities
markets. If we expand into new markets in the future, we could
face significant competition from other companies.
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Intellectual Property
We rely on a wide range of intellectual property. We own or have
a license to use all of the software that is essential to the
operation of our electronic platform, much of which has been
internally-developed by our technology team since our inception.
In addition to our software, we regard certain business methods
and our brand names, marketing elements, logos and market data
to be valuable intellectual property. We protect this
intellectual property by means of patent, trademark, service
mark, copyright and trade secret laws, contractual restrictions
on disclosure and other methods.
We currently have licenses to use several U.S. patents only
one of which we presently use in the operations of our
electronic platform. The patent we use, known as the Wagner
patent, relates to the automated matching of bids and offers for
futures contracts traded in the United States. We have been
granted a non-exclusive license from eSpeed, Inc. to use the
Wagner patent for the trading of futures contracts where at
least one of the screens is located in the United States or
where the contract provides for delivery of the underlying
commodity in the United States. Under this license, which
expires on the expiration of the Wagner patent in February 2007,
we must pay eSpeed a minimum of $2 million per year, plus a
royalty fee equal to the greater of 10 cents for each side to a
contract or generally 20 cents per contract. We paid eSpeed
$32,000 and $14,000 in royalty fees in 2004 and 2003,
respectively. For every 25 million applicable contracts
executed on our electronic platform in a given year beyond the
first 25 million contracts, we must pay eSpeed an
additional $2 million (in addition to the per-contract
charge). In the event that the notional value of any contract
subject to the license exceeds $50,000 as of the date on which
such contract is first available for trading, then the number of
contracts used to calculate the payments described above will
equal the notional value divided by $50,000, with the result
rounded up to the next whole number. eSpeed has agreed that to
the extent it enters into more favorable licensing terms with
any third party, they will modify our license agreement to
incorporate those more favorable terms. We cannot guarantee that
the Wagner patent, or any patent that we may license or acquire
in the future, is or will be valid and enforceable. If the
Wagner patent is found to be invalid, our license will terminate.
We have several U.S. and foreign patent applications pending,
including with respect to our electronic trade confirmation
service, our method to allow a user to engage in program trading
while protecting their proprietary data and software (known as
ICEMaker), and our method for displaying both cleared OTC
products and bilateral OTC products in a single price stream in
connection with our OTC business. Our electronic trade
confirmation service and our OTC clearing service are also the
subject of applications pending in the European Patent Office
and the Canadian Patent Office. In addition, a Patent
Cooperation Treaty application has been filed with respect to
the ICEMaker system. Through the IPE, we are joint owners with
NYMEX of a patent application related to an implied market
trading system. We can provide no assurance that any of these
applications will result in the issuance of patents.
We have received several federal registrations on trademarks
used in our business, including
"IntercontinentalExchange", "ICE" and our
globe design. We have also received federal registrations on
other services or products we provide, including "10x"
and "ICEMaker". We have been notified that our
applications for "ICEBLOCK" and
"Interchange" have been approved for publication,
although there is no guarantee that third parties will not
oppose this trademark or that we will prevail in any litigation
brought by a third party. In addition, we have several foreign
and U.S. applications pending for other marks used in our
business. We can provide no assurance that any of these
applications will mature into registered trademarks.
This prospectus also contains additional trade names, trademarks
and service marks of ours and of other companies. We do not
intend our use or display of other parties' trademarks,
trade names or service marks to imply, and this use or display
should not be construed to imply, our endorsement or sponsorship
of these other parties, their endorsement or sponsorship of us,
or any other relationship between us and these other parties.
Sales
As of December 31, 2004, we employed 19 full-time
sales personnel. Our sales team is managed by a futures industry
sales and marketing professional and is comprised mainly of
former brokers and traders with extensive
107
experience and established relationships within the commodities
trading community. Since our futures business is highly
regulated, we also employ staff who understand the regulatory
constraints upon marketing in this field.
Our marketing strategy is designed to expand relationships with
existing participants through the provision of value-added
products and services, as well as to attract new participants,
including those in markets and geographic areas where we do not
currently have a strong presence. We also seek to build brand
awareness and promote greater public understanding of our
business, including how our technology can improve current
approaches to price discovery and risk management in the energy
markets.
In 2004, we began to develop a cross-promotional marketing team
for our OTC and futures businesses. We believe this
repositioning of our marketing team is consistent with, and will
provide more effective support of, the underlying emphasis of
our business model — an open architecture and
flexibility that allows us to anticipate and respond rapidly to
evolving trends in the markets for energy commodities trading.
We typically pursue our marketing goals through a combination of
on-line promotion through our website, third party websites,
e-mail, print advertising, one-on-one client relationship
management and participation in trade shows and conferences.
From time to time, we also provide commission rate discounts of
limited duration to support new product launches.
Property
Our most valuable property is our technology and the
infrastructure underlying it. Our intellectual property is
described above under the heading
"— Technology". In addition to our
intellectual property, our other primary assets include computer
equipment and real property.
We own and lease an array of computers and related equipment.
The net book value of our computer equipment, software and
internally developed software was $4.2 million,
$1.6 million and $7.5 million, respectively, as of
December 31, 2004.
Our principal executive offices are located in Atlanta, Georgia.
We occupy 22,332 square feet of office space under a lease
that expires in June 2008 and 3,080 square feet under a
lease that expires in October 2005. We also lease an aggregate
of 36,634 square feet of office space in Calgary, Chicago,
Houston, London, New York and Singapore. Our largest physical
presence outside of Atlanta is in London, England, where we have
leased 26,793 square feet of office space. We believe that
our facilities are adequate for our current operations and that
we will be able to obtain additional space as and when it is
needed. The various leases covering these spaces generally
expire between 2008 and 2012. We also own property that houses
disaster recovery facilities for our open-outcry exchange floor.
The net book value of this property was $3.8 million as of
December 31, 2004.
Employees
As of December 31, 2004, we had 91 employees at our
headquarters in Atlanta, 95 in London and a total of
14 employees in our New York, Houston, Chicago, Singapore
and Calgary offices. None of our employees is subject to a
collective bargaining agreement. We have not experienced any
work stoppages, and we believe our relationship with our
employees is good.
108
REGULATION AND LEGAL PROCEEDINGS
We are subject to the jurisdiction of regulatory agencies in the
United States and the United Kingdom. We are also subject to a
number of legal proceedings.
Regulation of Our Business in the United States
We operate our OTC electronic platform as an exempt commercial
market, or ECM, under the Commodity Exchange Act and regulations
of the Commodities Futures Trading Commission, or the CFTC. The
CFTC generally oversees, but does not substantively regulate,
the trading of OTC derivative contracts on our platform. All of
our participants must qualify as eligible commercial entities,
as defined by the Commodity Exchange Act, and each participant
must trade for its own account, as a principal. Eligible
commercial entities include entities with at least
$10 million in assets that incur risks (other than price
risk) relating to a particular commodity or have a demonstrable
ability to make or take delivery of that commodity, as well as
entities that regularly purchase or sell commodities or related
contracts that are either (i) funds offered to specified
types of sophisticated investors that have (or are part of a
group of funds that collectively have) at least $1 billion
in assets, or (ii) part of a group with at least
$100 million in assets. We have also obtained orders from
the CFTC permitting us to treat floor brokers and floor traders
on U.S. and non-U.S. exchanges as eligible commercial
entities, subject to their meeting certain requirements. As an
ECM, we are required to comply with access, reporting and
record-keeping requirements of the CFTC. Both the CFTC and the
FERC have view only access to our trading screens on a real-time
basis. In addition, we are required to (i) report to the
CFTC certain information regarding transactions in products that
are subject to the CFTC's jurisdiction and that meet
certain specified trading volume levels, (ii) record and
report to the CFTC complaints that we receive of alleged fraud
or manipulative trading activity, and (iii) if it is
determined by the CFTC that any of our markets for products that
are subject to CFTC jurisdiction serve a significant price
discovery function (that is, a source for determining the best
price available in the market for a particular contract at any
given moment), publicly disseminate certain market and pricing
information free of charge on a daily basis. Presently, we do
not believe that any of our markets serve a significant price
discovery function. We are not permitted to represent to our
participants that we are regulated by the CFTC. Currently, our
OTC business is not otherwise subject to substantive regulation
by the CFTC or other U.S. regulatory authorities.
At various times in the last several years, legislative and
regulatory authorities at both the federal and state levels, as
well as media, political and consumer groups, have called for
increased regulation and monitoring of OTC commodities markets
in general, and the North American natural gas and power
commodities markets, our most important markets, in particular.
These calls have been associated, in part, with suggestions that
manipulative trading practices may have contributed to
unseasonably high prices in the wholesale power market in
California and other western states in the summer of 2000, the
collapse of Enron in 2001 and other events that have adversely
affected the operations and public image of participants in
energy markets. In May 2002, leading market participants in the
energy sector, including users of our electronic platform,
acknowledged that significant percentages of their trades in
recent periods did not generate a profit or a loss for either
trading party and instead were carried out to generate higher
trading volumes than would otherwise have been achieved by those
parties and for other non-bona fide reasons.
In light of these developments, Congress has, at various times
over the last several years, introduced legislation seeking to
restrict OTC derivatives trading of energy generally and to
bring electronic trading of OTC energy derivatives within the
direct scope of CFTC regulation. Legislation has recently been
introduced in Congress that would provide the CFTC with the
authority to require ECMs to comply with additional regulatory
requirements and to require some participants on ECMs to file
reports on their positions. If adopted, this legislation could
require us and our participants to incur additional costs in
order to comply with the additional regulations, and could deter
some participants from trading on our OTC platform. However, we
cannot predict whether this legislation will be adopted, which
could have an adverse effect on our business. Although these
legislative proposals have not been enacted, the same types of
legislation, or similar legislation, could be introduced in the
near future. If such legislation or other legislation were to be
enacted into law, it could have an adverse effect on our
business. In addition, in April 2002, the FERC adopted rules
requiring that all public utilities and power marketers file
quarterly reports about their power trading activities beginning
109
July 31, 2002. These reports must contain, among other
data, transaction information on all power sales that the
reporting entity has affected during the quarter.
At various times in recent history, regulators in some states,
including California and Texas, have publicly questioned whether
some form of regulation, including price controls, should be
reimposed in OTC commodities markets, particularly in states
where the power markets were recently deregulated. We or our
participants may, in the future, become subject to additional
legislative or regulatory measures. These could require us to
incur significant compliance costs or to modify our business
strategy. Any measures affecting our participants in connection
with their OTC commodities trading activities could potentially
discourage them from trading on our electronic platform and
adversely affect our competitive position.
Regulation of Our Business in the United Kingdom and
Europe
Operating as an RIE in the United Kingdom, the IPE has
regulatory responsibility in its own right and is subject to
regulation by the FSA pursuant to the Financial Services and
Markets Act of 2000, or the FSMA. The IPE is required under the
FSMA to meet various regulatory requirements, including a
requirement to maintain sufficient financial resources, adequate
systems and controls and effective arrangements for monitoring
and disciplining its members. The IPE is also required to make
available adequate resources to ensure that it can continue to
perform its regulatory functions. Failure to comply with its
regulatory requirements could subject the IPE to significant
penalties, including termination of its ability to conduct our
regulated business.
The FSMA also contains provisions making it an offense to engage
in certain market behavior and prohibits market abuse through
the misuse of information, the giving of false or misleading
impressions or the creation of market distortions. Breaches of
those provisions give rise to the risk of criminal or civil
sanctions, including financial penalties. The E.U. Market Abuse
Directive, which was due to be adopted in each member state by
October 12, 2004, supplements the provisions of the FSMA
regarding market abuse but will also introduce a specific
prohibition against insider dealing in commodity derivative
products. U.K. regulations designed to implement the E.U. Market
Abuse Directive are presently before Parliament. Under the FSMA,
the IPE enjoys statutory immunity in respect of any claims for
damages brought against it relating to any actions it has
undertaken (or in respect of any action or omission) in good
faith, in the discharge of its regulatory function.
In the United Kingdom, we also engage in a variety of activities
related to our OTC business through subsidiary entities that are
subject to FSA regulation. We engage in sales and marketing
activities through our subsidiary IntercontinentalExchange
Services (UK) Limited, or ICE Services UK, is authorized
and regulated by the FSA as an arranger of deals in investments
and as an agency broker, and is subject to the FSA's
Alternative Trading Systems regime. Under the Alternative
Trading Systems regime, ICE Services UK is subject to various
reporting, record keeping, and monitoring obligations with
respect to use by its participants of our electronic trading
platform.
Some jurisdictions in which our participants reside, in Europe
and elsewhere, have laws relating to commodities trading. We
have reviewed these laws and have concluded that our existing
business activities do not require us to obtain licenses in
those jurisdictions. However, the E.U.'s Directive on
Investment Services in the securities field, or ISD, which
requires each member state of the E.U. to regulate and impose
licensing requirements on professional investment services
firms, is to be replaced by a new E.U. directive, the Markets in
Financial Instruments Directive, or MIFID, which will cover
participants in commodity derivatives markets. MIFID must come
into force in each E.U. member state by April 2007. Service
providers in the commodities markets do not currently fall
within the scope of the ISD. MIFID brings commodity derivatives
within the scope of the E.U. financial regulation and will
harmonize the regulatory approach to licensing services relating
to commodity derivatives across Europe. The proposals also
impose greater regulatory burdens on E.U.-based operators of
alternative trading systems through which instruments regulated
under the directive are traded and will potentially affect
non-E.U. based operators of alternative trading systems. The
finer details of MIFID are still being discussed —
most notably in relation to the definition of commodity
110
derivatives — and, pending the outcome of this debate,
we may need to obtain licenses in various E.U. member
states in which our participants are based.
Legal Proceedings
NYMEX Claim of Infringement
NYMEX filed a complaint against us in Federal District Court in
the Southern District of New York on November 20, 2002.
NYMEX's complaint asserts that we have infringed its
claimed copyrights by using NYMEX's publicly available
settlement prices, which it is obligated by CFTC regulation to
make available to the public, in connection with the clearing of
two of our OTC derivative contracts. NYMEX claims that we have
infringed and diluted its service marks by referring to the
terms "NYMEX" and "New York Mercantile
Exchange" to describe the source of the final settlement
price for certain of our OTC swap contract specifications.
Finally, NYMEX asserts that we have tortiously interfered with
NYMEX's contract with Global View Software Inc., the entity
from whom we have a license to obtain NYMEX's settlement
prices.
NYMEX's settlement prices constitute the end-of-day market
values established by NYMEX in accordance with its
responsibilities as a designated contract market. NYMEX uses its
settlement prices to clear its futures contracts on a daily
basis and to settle at expiration each type of commodity futures
contract (and options on those contracts) traded on NYMEX. We
offer trading on our electronic platform in two cleared OTC swap
contracts, WTI crude oil and Henry Hub natural gas that are
settled at expiration on the basis of NYMEX settlement prices
and that are margined at the end of each trading day by
LCH.Clearnet based on prices determined by us based on trading
in our market, taking into account NYMEX daily settlement
prices. NYMEX has alleged in its complaint that the settlement
prices that it publishes are subject to copyright protection,
and that we are infringing on its rights by using or referring
to these settlement prices in our cleared business. NYMEX has
demanded that we stop these practices and seeks to permanently
enjoin us from using or referring to these settlement prices. We
believe that our offering of contracts settled at expiration
against NYMEX settlement prices, and margined each day based in
part on NYMEX daily settlement prices, as well as our references
to NYMEX when describing these contracts, do not infringe upon
any NYMEX intellectual property rights. Furthermore, we regard
our business practices in this respect as consistent with those
that have generally prevailed in the OTC markets for a
substantial period of time. However, we cannot assure you that
any litigation that might result from NYMEX's allegations
will be resolved in our favor.
On September 2, 2004, we filed a motion for summary
judgment seeking judgment as a matter of law with respect to all
of NYMEX's claims. Our motion argues that NYMEX's
copyright claims should be dismissed on a number of grounds,
including that NYMEX's settlement prices are not the proper
subject matter of copyright; that the Commodity Exchange Act
impliedly repeals the copyright laws; that we have not in any
event infringed NYMEX's copyrights; that our use of
NYMEX's settlement prices constitutes "fair use";
and that our use of these prices does not violate state law. On
November 12, 2004, NYMEX filed a cross motion for summary
judgment with respect to the copyrightability of its settlement
prices and its tortuous interference with contract claim. Oral
argument on the cross motions was held on February 18,
2005. To date, the court has not ruled on the parties'
cross motions for summary judgment filed by us and NYMEX and no
date for a trial has been set. We are vigorously defending this
claim, but we cannot assure you that this litigation will be
resolved in our favor.
For more information regarding the potential impact on our
business, see "Risk Factors — Our principal
competitor, NYMEX, has filed claims of copyright and trademark
infringement against us, which, if determined adversely to us,
would have a material adverse effect on our business".
EBS Dealing Resources Claim of Infringement
On January 29, 2004, EBS Dealing Resources, Inc., or EBS,
filed a complaint against us in Federal District Court in the
Southern District of New York alleging that we are infringing
two patents held by EBS relating to the way in which bids and
offers are displayed on an electronic system in a manner that
permits parties to act only on those bids and offers from
counterparties with whom the party has available credit. EBS
111
is a provider of foreign exchange and precious metals trading
and data solutions. EBS claims that the credit filter
functionality of our trading platform infringes EBS'
patented systems and methods for displaying a so-called
"dealable price". EBS has requested injunctive relief
and monetary damages for the alleged patent infringement. EBS
was denied a request for preliminary injunctive relief in an
April 2004 hearing before the court. A claim construction
hearing, in which the scope of EBS' asserted patent claims
will be construed by the court, is scheduled for May 2005, and a
trial date is scheduled for February 2006.
We do not believe that our electronic trading system infringes
the EBS patents based upon differences in our system and the
system claimed in the patents. However, we cannot assure you
that this litigation will be resolved in our favor. For more
information regarding the potential impact on our business, see
"Risk Factors — We have been accused of patent
infringement by EBS Dealing Resources".
112
MANAGEMENT
Directors and Executive Officers
The following table provides information regarding our
directors, executive officers and significant employees:
Name
Age
Title
Jeffrey C. Sprecher
50
Chairman of the Board and Chief Executive Officer
Charles R. Crisp
57
Director
Jean-Marc Forneri
46
Director
Sir Robert Reid
70
Director
Frederic V. Salerno
61
Director
Richard L. Sandor, Ph.D.
63
Director
Judith A. Sprieser
51
Director
Vincent Tese
62
Director
Charles A. Vice
41
Chief Operating Officer and Senior Vice President
Richard V. Spencer
51
Chief Financial Officer and Senior Vice President
David S. Goone
44
Senior Vice President, Business Development and Sales
Edwin Marcial
37
Chief Technology Officer and Senior Vice President
Richard Ward, Ph.D.
48
Chief Executive Officer, the IPE
Johnathan H. Short
39
Senior Vice President, General Counsel and Corporate Secretary
Directors
Jeffrey C. Sprecher.
Mr. Sprecher has been a
director and our Chief Executive Officer since our inception and
has served as our Chairman of the Board since November 2002. As
our Chief Executive Officer, he is responsible for our strategic
direction, operation, and financial performance.
Mr. Sprecher purchased Continental Power Exchange, Inc.,
our predecessor company, in 1997. Prior to joining CPEX,
Mr. Sprecher held a number of positions, including
President, over a fourteen-year period with Western Power Group,
Inc., a developer, owner and operator of large central-station
power plants. While with Western Power, Mr. Sprecher was
responsible for a number of significant financings. In 2002,
Mr. Sprecher was recognized by
Business Week
magazine as one of its Top Entrepreneurs. Mr. Sprecher
holds a B.S. degree in Chemical Engineering from the University
of Wisconsin and an MBA from Pepperdine University.
Charles R. Crisp.
Mr. Crisp, who has been a
director since November 2002, is the retired President and Chief
Executive Officer of Coral Energy, a Shell Oil affiliate
responsible for wholesale gas and power activities. He served in
this position from 1999 until his retirement in October 2000,
and was President and Chief Operating Officer from January 1998
through February 1999. Prior to that, Mr. Crisp served as
President of the power generation group of Houston Industries
and, between 1988 and 1996, served as President and Chief
Operating Officer of Tejas Gas Corporation. Mr. Crisp
currently serves as a director of EOG Resources, Inc., AGL
Resources, Inc. and Targa Resources, Inc.
Jean-Marc Forneri.
Mr. Forneri, who has been
a director since November 2002, is founder and senior partner of
Bucephale Finance, a boutique M&A firm specializing in large
transactions for French corporations, foreign investors and
private equity firms. For the seven years prior to
Bucephale's founding, Mr. Forneri headed the
investment banking business of Credit Suisse First Boston in
Paris. He was Managing Director and
113
Head of Credit Suisse First Boston France S.A, and Vice
Chairman, Europe. Prior to that, Mr. Forneri was a Partner
of Demachy Worms & Cie Finance from 1994 to 1996, where
he was in charge of investment banking activities of Group
Worms. Mr. Forneri is also a Director of Balmain SA, Banque
Lyonnaise Bonnasse, SAGEM, SNECMA and Friends of Paris Museum of
Modern Art.
Sir Robert Reid.
Sir Robert Reid, who has been a
director since June 2001, has served since 1997 as the Deputy
Governor of the Bank of Scotland and, since 1999, as the
Chairman of The International Petroleum Exchange of London. He
spent much of his career at Shell International Petroleum
Company Limited, and served as Chairman and Chief Executive of
Shell U.K. Limited from 1985 until 1990. He became Chairman of
the British Railways Board in 1990, and retired from that post
in 1995. From 1994 to 1997, he was Chairman of London
Electricity. He was Chairman of the Council of The Industrial
Society between 1993 and 1998 and Chairman of Sears plc from
1995 until 1999. He has been Chairman of Sondex Limited since
1999 and Chairman of Kings Cross Partnership since 2000. He has
also served as a Non-Executive Director on the boards of The
Merchants Trust since 1995, Avis Europe since 2002 (Chairman),
Sun Life Financial Services of Canada since 1997 and Siemens plc
since 1998. He received his Knighthood in Queen Elizabeth's
1990 Birthday Honours.
Frederic V. Salerno.
Mr. Salerno, who has
been a director since November 2002, is the former Vice Chairman
of Verizon Communications, Inc. Before the merger of Bell
Atlantic and GTE, Mr. Salerno was Senior Executive Vice
President, Chief Financial Officer and served in the Office of
the Chairman of Bell Atlantic from 1997 to 2001. Prior to
joining Bell Atlantic, he served as Executive Vice President and
Chief Operating Officer of New England Telephone from 1985 to
1987, President and Chief Executive Officer of New York
Telephone from 1987 to 1991 and Vice Chairman —
Finance and Business Development at NYNEX from 1991 to 1997.
Mr. Salerno served on the boards of directors of Verizon
Communications, Inc. from 1991 to 2001, AVNET, Inc. from 1993 to
2003 and was Chairman of Orion Power from 1999 until its sale in
2001. He has served on the boards of directors of The Bear
Stearns Companies, Inc. since 1993, Viacom, Inc. since 1996,
Consolidated Edison, Inc. since 2002, Popular, Inc. since 2002,
Akamai Technologies, Inc. since 2002 and Gabelli Asset
Management since 2003.
Richard L. Sandor, Ph.D.
Dr. Sandor, who
has been a director since November 2002, is the Chairman and
Chief Executive Officer of the Chicago Climate Exchange, Inc.,
and has served as Chairman and Chief Executive Officer of
Environmental Financial Products, L.L.C. since 1998. Prior to
the creation of Environmental Financial, Dr. Sandor was a
senior financial markets executive with Kidder Peabody from 1991
to 1993, Banque Indosuez from 1990 to 1991 and Drexel Burnham
Lambert from 1982 to 1990. Dr. Sandor has served as a
Non-Resident Director of the CBOT, as the CBOT's Second
Vice-Chairman of Strategy and, for more than three years, as the
CBOT's Chief Economist. Dr. Sandor is currently a
director of Nasdaq Liffe Markets, American Electric Power, the
Zurich-based Sustainable Performance Group, Nextera Enterprises
Inc., Millenium Cell, Bear Stearns Financial Products, Inc. and
its subsidiary, Bear Stearns Trading Risk Management Inc. He is
also a member of the design committee of the Dow Jones
Sustainability Index. Dr. Sandor is currently a Research
Professor at the Kellogg Graduate School of Management at
Northwestern University and has been a faculty member of the
School of Business Administration at the University of
California, Berkeley and at Stanford University.
Judith A. Sprieser.
Ms. Sprieser, who has
been a director since April 2004, is the Chief Executive Officer
of Transora, Inc., a standards-based, B2B e-commerce software
and services company, which she helped found in 2000.
Ms. Spreiser will serve in that capacity until April 2005.
Ms. Sprieser was previously Executive Vice President of
Sara Lee Corporation, serving as Chief Executive of Sara
Lee's Food and Foodservice operations from 1999 to 2000.
Prior to assuming that post, she served as Chief Financial
Officer for Sara Lee Corporation, and in various other financial
and operating positions. Ms. Sprieser currently is a member
of the boards of directors of Allstate Insurance Company, USG
Corporation, Kohl's Corporation, Reckitt Benckiser, and is
a member of the American Institute of CPAs and Northwestern
University's Board of Trustees. She has a B.A. degree and
an MBA from Northwestern University.
Vincent Tese.
Mr. Tese, who has been a
director since April 2004, currently serves as Chairman of
Wireless Cable International, Inc., a position he has held since
1995. Previously, he served as New York State Superintendent of
Banks from 1983 to 1985, Chairman and Chief Executive Officer of
the Urban
114
Development Corporation from 1985 to 1994, Director of Economic
Development for New York State from 1987 to 1994, and
Commissioner and Vice Chairman of the Port Authority of New York
and New Jersey from 1991 to 1995. Mr. Tese also served as a
Partner in the law firm of Tese & Tese from 1973 to
1977. He was a Partner in the Sinclair Group, a commodities
trading and investment management company from 1977 to 1982,
where he traded on the COMEX. He was also a co-founder of Cross
Country Cable TV. Mr. Tese is a member of the boards of
directors of The Bear Stearns Companies, Inc., Bowne &
Co., Inc., Cablevision, Inc., Gabelli Asset Management and
National Wireless Holdings, Inc., and serves as a trustee of New
York University School of Law and New York Presbyterian
Hospital. Mr. Tese has a B.A. degree in accounting from
Pace University, a J.D. degree from Brooklyn Law School and a
LL.M. degree in taxation from New York University School of Law.
Executive Officers
Jeffrey C. Sprecher.
See biography of
Mr. Sprecher under "Directors".
Charles A. Vice.
Mr. Vice, who has been our
Chief Operating Officer since July 2001, oversees our
operations, including market development, customer support and
business development activities. Mr. Vice has over
15 years of experience in applying information technology
in the energy industry. Mr. Vice joined CPEX as a Marketing
Director during its startup in 1994. Prior to joining CPEX,
Mr. Vice was a Principal with Energy Management Associates
for five years, providing consulting services to energy firms.
From 1985 to 1988, he was a Systems Analyst with Electronic Data
Systems. Mr. Vice holds a Bachelor's of Science degree
in Mechanical Engineering from the University of Alabama and an
MBA from Vanderbilt University.
Richard V. Spencer.
Mr. Spencer, who has been
our Chief Financial Officer since December 2001, is responsible
for all aspects of our finance and accounting functions,
including treasury, tax, cash management and investor relations.
Mr. Spencer joined us from Crossroads Investment Advisers,
L.P., a venture capital and strategic private equity investment
organization, where he served as President from 1998 to 2001.
Previously, he was a senior vice-president with the Private
Funds Group of Donaldson, Lufkin & Jenrette, or DLJ.
Prior to joining DLJ, Mr. Spencer was a director with the
Private Equity Group of Merrill Lynch in Atlanta. From 1990 to
1994, he oversaw the Canadian operations of First Chicago. He
also worked in corporate finance, marketing and underwriting
roles for Bear, Stearns and Co., Inc. and Goldman,
Sachs & Co. Mr. Spencer earned his Bachelor's
Degree in Economics from Rollins College. He has also completed
the Advanced Management Program at Duke University's Fuqua
School of Business.
David S. Goone.
Mr. Goone joined us in March
2001 and became our Senior Vice President, Business Development
and Sales in April 2004. He is responsible for the expansion of
our product line, including futures products and trading
capabilities for our electronic platform. Prior to joining us,
Mr. Goone served as the Managing Director, Product
Development and Sales at CME where he worked for nine years.
From 1989 through 1992, Mr. Goone was Vice President at
Indosuez Carr Futures, where he developed institutional and
corporate business. Prior to joining Indosuez, Mr. Goone
worked at Chase Manhattan Bank, where he developed and managed
their exchange-traded foreign currency options operation at the
CME. Mr. Goone holds a B.S. degree in Accountancy from the
University of Illinois at Urbana-Champaign.
Edwin Marcial.
Mr. Marcial, who has been our
Chief Technology Officer since February 2000, is responsible for
all systems development and our overall technology strategy. He
oversees the software design and development initiatives of our
information technology professionals in the areas of project
management, software development, quality assurance and
security. Mr. Marcial joined the software development team
at CPEX in 1996 and has 12 years of IT experience building
large-scale systems in the energy industry. Prior to joining
CPEX, he led design and development teams at GE-Harris building
software applications for the company's energy management
systems. Mr. Marcial earned a B.S. degree in Computer
Science from the College of Engineering at the University of
Florida.
Richard Ward, Ph.D.
Dr. Ward, who has
been Chief Executive Officer of the IPE since 1999, is
responsible for the IPE's financial performance, technology
and market operations, human resources, business development and
regulation and risk management. Prior to assuming the role of
Chief Executive Officer of the IPE, Dr. Ward served as the
Executive Vice President of Business Development for the IPE,
responsible for
115
establishing networks between the IPE's board of directors
and members and key outside parties, implementing business
improvement programs and leading design and development of the
innovative futures gas market. Before joining the IPE in 1995,
Dr. Ward was Head of Marketing and Business Development for
energy derivatives worldwide at Tradition Financial Services and
was the Manager of Business Development for BP Oil Trading
International. Dr. Ward currently serves as a Non-Executive
Director of LCH.Clearnet Group Limited and served as a director
of the Futures and Options Association until January 2005.
Dr. Ward has a B.Sc. (1st Class Hons.) in
Chemistry and a Ph.D. in Physical Chemistry from Exeter
University.
Johnathan H. Short.
Mr. Short has been our
Senior Vice President, General Counsel and Corporate Secretary
since June 2004. In his role as General Counsel, he is
responsible for managing our legal and regulatory affairs. As
Corporate Secretary, he is also responsible for a variety of our
corporate governance matters. Prior to joining us,
Mr. Short was a partner at McKenna Long & Aldridge
LLP, a national law firm with approximately 350 attorneys.
Mr. Short practiced in the corporate law group of McKenna,
Long & Aldridge (and its predecessor firm, Long
Aldridge & Norman LLP) from November 1994 until he
joined us in June 2004. From April 1991 until October 1994, he
practiced in the commercial litigation department of Long
Aldridge & Norman LLP. Mr. Short holds a J.D. from
the University of Florida, College of Law, and a B.S. in
Accounting from the University of Florida, Fisher School of
Accounting.
Board of Directors
Our board of directors consists of eight members. Our board of
directors is elected annually, and each director holds office
for a one-year term.
Board Committees
Our board of directors has an audit committee and a compensation
committee. Prior to the completion of this offering, our board
will also establish a nominating and corporate governance
committee.
Audit Committee.
Our audit committee consists of
Messrs. Salerno, Forneri and Crisp. Mr. Salerno serves
as the chair of the audit committee. Mr. Salerno will be
our audit committee financial expert under SEC rules and
regulations. We believe that the composition of our audit
committee meets the requirements for independence under current
rules and regulations of the SEC and the New York Stock
Exchange, and we intend to comply with future requirements to
the extent they become applicable to us. Our audit committee
will, among other things, oversee the engagement of our
independent public accountants, review our financial statements
and the scope of annual external and internal audits and
consider matters relating to accounting policies and internal
controls. The audit committee will be governed by a charter that
complies with the rules of the SEC and the New York Stock
Exchange.
Compensation Committee.
Our compensation committee
consists of Ms. Sprieser and Messrs. Tese and Forneri.
Ms. Sprieser serves as the chair of our compensation
committee. We believe that the composition of our compensation
committee meets the requirements for independence under, and the
functioning of our compensation committee complies with, current
rules and regulations of the SEC and the New York Stock
Exchange. We intend to comply with future requirements to the
extent they become applicable to us. The compensation committee
will, among other things, review, approve and make
recommendations to our board of directors concerning our
compensation practices, policies and procedures for our
executive officers. The compensation committee will be governed
by a charter that complies with the rules of the SEC and the New
York Stock Exchange.
Nominating and Corporate Governance Committee.
Prior to the completion of this offering, our board of directors
will establish a nominating and corporate governance committee.
The nominating and corporate governance committee will, among
other things, identify, nominate and recommend individuals to
the board of directors and develop and recommend to the board of
directors standards of corporate governance principles. The
nominating and corporate governance committee will be governed
by a charter that complies with the rules of the New York Stock
Exchange.
116
The nominating and corporate governance committee will also be
responsible for developing and recommending to the board of
directors a set of corporate governance guidelines and
principles applicable to us.
Compensation Committee Interlocks and Insider
    Participation
None of the members of our compensation committee has at any
time been one of our officers or employees. None of our
executive officers currently serves, or in the past year has
served, as a member of the board of directors or compensation
committee of any entity that has one or more executive officers
serving on our board of directors or compensation committee.
Director Compensation
Directors who are also our employees do not receive additional
compensation for serving as directors. Non-employee directors
are paid an annual retainer of $30,000, which amount may be
taken as restricted shares of our common stock that vest over
three years under our 2003 Restricted Stock Deferral Plan for
Outside Directors. Non-employee directors receive a fee of
$1,500 for attendance at each meeting of the board of directors
and each committee meeting. Members of the audit committee
receive a fee of $3,000 for attendance at each meeting of the
audit committee. Both of these meeting fees may be taken in the
form of restricted shares of our common stock that vest over
three years under our 2003 Restricted Stock Deferral Plan for
Outside Directors. Non-employee directors are also reimbursed
for out-of-pocket expenses incurred in attending meetings of our
board of directors. Directors are eligible for grants of stock
options under the 2000 Stock Option Plan and grants of
restricted stock under our 2004 Restricted Stock Plan, in each
case in an amount determined from time to time by our board of
directors.
IPE Board of Directors
At the time of our acquisition of the IPE, we committed to
maintain an appropriate corporate governance structure for the
IPE to ensure its compliance with the obligations imposed by
U.K. law and the regulations applicable to it as an RIE. We
agreed that the IPE's board of directors should continue to
have primary responsibility for ensuring this compliance, and
the IPE agreed that it would retain at least two independent
non-executive directors. We may accept nominations of possible
candidates for the IPE's board from a nominations committee
of the IPE's board of directors, comprised of its
chairperson, chief executive officer, one of its non-executive,
independent directors and one of its directors representative of
its members. In addition, we are able to nominate and elect the
board of IPE Holdings Plc, and thereby, indirectly, to control
the management of the IPE. The IPE's board of directors
operates in accordance with a code of practice that the IPE
adopted in April 2000. The code of practice, which is not
legally binding, provides for consultation with market
participants on various matters.
117
Executive Compensation
The following table sets forth all compensation paid by us for
each of the years ended December 31, 2004, 2003 and 2002 to
our chief executive officer and our five most highly compensated
executive officers other than our chief executive officer who
were serving as executive officers at the end of the last fiscal
year. We refer to these individuals as the named executive
officers elsewhere in this prospectus.
Summary Compensation Table
Annual Compensation
Long-Term Compensation
Awards(1)
Payouts
Securities
Restricted
Underlying
LTIP
All Other
Name and Principal
Other Annual
Stock Unit
Options/
Payouts
Compen-
Position
Year
Salary ($)
Bonus ($)
Compensation ($)
Awards ($)(7)
SARs (#)
($)
sation ($)
Jeffrey C. Sprecher
2004
603,750
431,681
421,498
3,533,400
—
—
21,236
Chairman and Chief
2003
603,750
333,572
246,749
—
900,000
—
21,268
Executive Officer(2)
2002
500,000
560,625
309,664
—
—
—
20,991
Charles A. Vice
2004
420,000
231,000
—
1,500,000
—
—
16,949
SVP, Chief Operating
2003
420,000
178,500
—
—
432,200
—
10,000
Officer(3)
2002
366,667
300,000
—
—
—
—
10,000
Richard V. Spencer
2004
420,000
231,000
—
1,500,000
—
—
18,263
SVP, Chief Financial
2003
420,000
178,500
—
—
432,200
—
10,000
Officer(4)
2002
304,615
500,000
—
—
—
—
10,000
Dr. Richard Ward
2004
448,252
190,507
—
670,000
—
—
89,650
Chief Executive
2003
400,355
170,151
—
—
231,350
—
80,071
Officer, IPE(5)
2002
354,169
141,667
—
—
—
—
70,834
David S. Goone
2004
338,000
185,900
—
930,000
—
—
16,152
SVP, Business
2003
338,000
143,650
—
—
330,500
—
10,000
Development & Sales(6)
2002
314,230
243,750
—
—
—
—
10,000
Edwin D. Marcial
2004
350,000
192,500
—
1,250,000
—
—
14,621
SVP, Chief
2003
350,000
148,750
—
—
330,500
—
10,000
Technology Officer(7)
2002
300,000
243,750
—
—
—
—
10,000
(1)
The long-term compensation awards will be adjusted for the
    recapitalization at the completion of this offering by giving
    effect to
    the           for
    1 reverse stock split of the Class A common stock.
(2)
Effective as of January 1, 2005, Mr. Sprecher's
    annual salary was increased from $603,750 to $675,750 in
    conjunction with the elimination of his $72,000 annual housing/
    travel allowance. Other annual compensation includes loan
    forgiveness and related gross up of tax allowance amount (CPEX
    portion of LLC tax liability) of $349,498 in 2004 ($201,136 plus
    gross up of $148,362), $174,749 in 2003 ($100,568 plus gross up
    of $74,181) and $185,664 in 2002 ($100,568 plus gross up of
    $85,096) and payment of an Atlanta housing and travel allowance
    ($72,000 in 2004, $72,000 in 2003 and $124,000 in 2002). All
    other compensation includes payment of an individual disability
    income policy ($8,988 in 2004, $9,478 in 2003 and $9,201 in
    2002), payment of a term life insurance policy ($1,998 in 2004,
    $1,790 in 2003 and $1,790 in 2002) and the employer match in our
    401(k) plan ($10,250 in 2004, $10,000 in 2003 and $10,000 in
    2002).
(3)
All other compensation for Mr. Vice includes the employer
    match in our 401(k) plan ($10,250 in 2004, $10,000 in 2003 and
    $10,000 in 2002), payment of an individual disability income
    policy ($5,822 in 2004) and payment of a term life insurance
    policy ($877 in 2004).
(4)
Mr. Spencer's 2002 bonus is comprised of a signing
    bonus ($200,000) and a year-end performance bonus ($300,000).
    All other compensation includes the employer match in our 401(k)
    plan ($10,250 in 2004, $10,000 in 2003 and $10,000 in 2002),
    payment of an individual disability income policy ($6,134 in
    2004) and payment of a term life insurance policy ($1,879 in
    2004).
(5)
All figures for Dr. Ward have been converted to
    U.S. dollars using the average exchange rate of pounds
    sterling per U.S. dollar in each year (1.8296 pounds
    sterling per U.S. dollar in 2004, 1.6341 in 2003 and 1.5071
    in 2002). All other compensation includes a pension contribution
    of 20% of salary.
118
(6)
In March 2005, the compensation committee approved a salary
    increase for Mr. Goone from $338,000 to $400,000 per year,
    effective as of January 1, 2005. All other compensation for
    Mr. Goone includes the employer match in our 401(k) plan
    ($10,250 in 2004, $10,000 in 2003 and $10,000 in 2002), payment
    of an individual disability income policy ($5,072 in 2004) and
    payment of a term life insurance policy ($830 in 2004).
(7)
All other compensation for Mr. Marcial includes the
    employer match in our 401(k) plan ($10,250 in 2004, $10,000 in
    2003 and $10,000 in 2002), payment of an individual disability
    income policy ($3,946 in 2004) and payment of a term life
    insurance policy ($425 in 2004).
(8)
2004 Restricted Stock Awards are the only grants to the named
    executive officers between 2002 and 2004, and were granted at a
    fair market value of $2.00 per share as determined by the
    company's board of directors primarily based on a valuation
    performed by an independent third party. 50% of the shares are
    time-vesting shares that vest over four years (25% after one
    year and the balance vesting ratably over the remaining
    36 months); and 50% of the shares are performance-vesting
    shares and vest based on the achievement of cumulative EBITDA
    performance vs. pre-established targets between 2005 and 2007.
Employment Agreements and Benefit Plans
We have entered into employment agreements with each of
Messrs. Sprecher, Spencer, Vice, Marcial, Goone and Short
and Dr. Ward. Below are summaries of the material
provisions of these agreements, which are qualified in their
entirety by reference to the respective agreements.
Term of Employment
Each agreement (other than Dr. Ward's) provides for an
initial employment term of two or three years, depending on the
employee. The term of each agreement will be automatically
extended every six months unless either we or the employee,
prior to the date of extension, give written notice to the other
that there will be no extension. The extension will be for a
term equal to the initial term — that is, two or three
years, depending on the employee. The effect of this provision
is to ensure that the term remaining under any of these
agreements is never more than six months less than the initial
term. The initial term is three years for Messrs. Sprecher,
Spencer and Vice, and two years for Messrs. Goone, Marcial
and Short. Dr. Ward's agreement provides for a rolling
one year employment, terminable upon 12 months' notice
by either party.
Compensation
Each employment agreement provides for an initial annual base
salary. See "— Executive Compensation"
above. Each of these employees is also eligible to receive an
annual bonus and to receive from time to time grants of awards
under our 2000 Stock Option Plan and 2004 Restricted Stock Plan,
in each case as set by the compensation committee of our board
of directors or by our board of directors as a whole.
Termination
If we terminate an employee for "cause" or "gross
misconduct" or any such employee resigns other than for
"good reason", as each term is defined in the
applicable employment agreement, we must pay the employee, among
other benefits, all accrued but unpaid salary, annual bonus, if
any, and unreimbursed expenses. In the event that we terminate
any employee other than for cause or the employee resigns for
good reason, we must compensate the employee as follows:
Termination Following a Change in Control.
If the
termination occurs after the effective date of a change in
control of us, we must pay the employee a lump sum amount of
cash equal to a multiple of his salary and bonus. This multiple
is three for Messrs. Sprecher, Spencer and Vice, and two
for Messrs. Goone, Marcial and Short. In these
circumstances, the applicable bonus amount will be the greater
of the employee's last annual bonus and the employee's
target bonus, as previously determined by the board, for the
year in which the employee is terminated. We will also provide
gross up payments to the terminated employee as necessary to
compensate him for liability for certain excise taxes that may
become due as a result of payments called for
119
under the employment agreement. Dr. Ward's agreement
provides for a mutual notice period of one year in order to
terminate the agreement without cause.
A U.S. executive terminated following, or as a result of, a
change in control will be entitled to exercise his stock options
that had been granted after entering into the employment
agreement for the same period as if the employee had continued
in employment through the remainder of his term. All of
employee's stock options granted after the date of the
employment agreement will become exercisable upon the
executive's termination. For a U.K. executive terminated
following, or as a result of, a change in control, all options
will become exercisable and all restricted stock will vest upon
such executive's termination, pursuant to agreements
entered into under the 2000 Stock Option Plan and 2004
Restricted Stock Plan.
Termination Unrelated to a Change in Control.
If
the termination of a U.S. executive is unrelated to a
change in control, we must continue to pay his salary and bonus
for the remainder of the employment term, over time as it would
normally be paid, with the bonus so paid equal to the greater of
the last annual bonus paid to him prior to termination and his
target bonus for the applicable year. In addition, any stock
options granted after the date of the applicable employment
agreement will become exercisable upon the employee's
termination.
Other Provisions
Dr. Ward's employment agreement contains provisions
relating to confidentiality and exclusivity of services. Each of
the other employees named above is subject to customary
confidentiality, non-competition and non-solicitation provisions
during the term of employment and for a specified period after
termination, and each must not use or disclose any of our trade
secrets for as long as they remain trade secrets.
Benefit Plans
Our U.S. employees are eligible to participate in our
401(k) and Profit Sharing Plan, which was implemented on
October 1, 2001. We offer to match 100% of the first 5% of
the eligible employee's compensation contributed to the
plan, subject to plan and statutory limits. Total matching
contributions under our plans in 2004, 2003 and 2002 were
$617,000, $556,000 and $473,000, respectively. No discretionary
or profit sharing contributions were made in 2004, 2003 or 2002.
Our U.K.-based subsidiaries have a defined contribution pension
plan for eligible employees. We contribute a percentage of the
employee's base salary to the plan each month and employees
are able to make additional voluntary contributions, subject to
plan and statutory limits. Our contributions range from 10% to
20% of an employee's base salary. Total pension
contributions made by us under this plan in 2004, 2003 and 2002
were $789,000, $750,000 and $617,000, respectively.
2000 Stock Option Plan
We adopted the 2000 Stock Option Plan for the purposes of
attracting, retaining and rewarding our employees and directors.
Prior to the completion of this offering, our compensation
committee will amend the plan to take into account the
recapitalization by giving effect to
the                    for 1
reverse stock split of the Class A common stock (and
related adjustments) and the substitution of new common stock
for Class A2 common stock authorized for issuance under the
plan. The 2000 Stock Option Plan authorizes the issuance of up
to 21,000,000 shares of Class A2 common stock upon the
exercise of options under the plan. Following the
recapitalization and the amendment of the
plan,                      shares
of the new common stock will be authorized for issuance. Both
incentive and nonqualified options may be granted under and
generally vest over four years. Options may be exercised up to
ten years after the date of grant, but generally expire
14 days after termination of employment or service as a
director.
In the event of any increase or decrease in the number of issued
shares resulting from a subdivision or consolidation of shares
or the payment of a stock dividend or any other increase or
decrease in the number of issued shares effected without
consideration received by us, the compensation committee will
conclusively determine the adjustment to the number of shares
covered by the 2000 Stock Option Plan, the number of shares
covered by each outstanding option and the exercise price of
each option.
120
In connection with our June 2001 reorganization, our board of
directors effected a 2.841 to 1 split of the options outstanding
under our stock option plan on June 15, 2001. All
references to the number of shares and stock options have been
adjusted to reflect the stock split on a retroactive basis.
Eligibility.
Options may be granted to any individual
employed by us, within the meaning of Section 3401 of the
Internal Revenue Code of 1986, or to any of our directors, as
the compensation committee may determine.
Administration.
The compensation committee administers
the 2000 Stock Option Plan. The compensation committee has the
authority to interpret and construe the plan, grant options and
determine who will receive options and the number of shares to
be granted subject to exercise of options issued under the plan.
All determinations of the compensation committee with respect to
the interpretation and construction of the 2000 Stock Option
Plan are final.
Nonassignability.
Options may be exercised only by the
grantee and may not be assigned or transferred during the
grantee's lifetime.
Restrictions on Shares Acquired.
In connection with an
underwritten registered offering of any of our securities, we
may require that optionees not sell, dispose of, transfer, make
any short sale of, grant any option for the purchase of, or
enter into any hedging or similar transaction having the same
economic effect as a sale with respect to any shares or other
securities of our company held by the optionee, for a period of
time specified by the underwriters (not to exceed
12 months) following the effective date of registration.
Amendment; Termination.
The board of directors may
terminate or amend the 2000 Stock Option Plan, except that no
such termination or amendment may increase the number of shares
subject to the 2000 Stock Option Plan or change the class of
individuals eligible to receive options without the approval of
our shareholders. In addition, no amendment may, without the
grantee's consent, materially adversely affect a previously
granted option.
2003 Restricted Stock Deferral Plan for Outside
    Directors
We adopted the 2003 Restricted Stock Deferral Plan for Outside
Directors, or the 2003 Directors Plan, for the purpose of
attracting and retaining outside directors. Under the
2003 Directors Plan, members of the board of directors can
elect to receive up to 100% of their retainer and meeting fees
in restricted stock or restricted stock units. Shares of
restricted stock will be issued, or restricted stock units will
be credited, as of the end of each calendar quarter with respect
to retainer and meeting fees otherwise payable in that quarter.
The restricted stock or restricted stock units generally vest
over a three-year period, and one-third of the shares will vest
each year on the anniversary of the end of the calendar quarter
when fees were payable.
Reservation of shares.
The compensation committee will
reserve a number of our shares sufficient to cover our
obligations under the 2003 Directors Plan for issuance to
eligible grantees in lieu of fees otherwise payable in cash.
In the event of any increase or decrease in the number of issued
shares resulting from a subdivision or consolidation of shares
or the payment of a stock dividend or any other increase or
decrease in the number of issued shares effected without
consideration received by us, the compensation committee will
conclusively determine the adjustment to the number of unissued
shares of restricted stock or the number of restricted stock
units. Prior to the completion of this offering, our
compensation committee will amend the plan to take into account
the recapitalization by giving effect to
the       for 1 reverse stock
split of the Class A common stock (and related adjustments)
and the substitution of new common stock for Class A2
common stock.
Eligibility.
Restricted stock may be issued, or
restricted units credited, to any member of the board of
directors who is not a full-time employee of our company.
Administration.
The compensation committee administers
the 2003 Directors Plan. The compensation committee has the
authority to interpret and construe the 2003 Directors
Plan, and all such determinations are final.
121
Nonassignability.
Restricted stock issued under the
2003 Directors Plan is not transferable and may not be
sold, exchanged, transferred, pledged, hypothecated or otherwise
disposed of at any time prior to the vesting of such shares. The
right to receive payments with respect to restricted stock units
is generally not assignable or transferable.
Restrictions on Shares Issued.
In connection with an
underwritten registered offering of any of our securities, we
may require that eligible directors not sell, dispose of,
transfer, make any short sale of, grant any option for the
purchase of, or enter into any hedging or similar transaction
having the same economic effect as a sale with respect to any
shares or other securities of our company held by the director,
for a period of time specified by the underwriters (not to
exceed 12 months) following the effective date of
registration.
Amendment; Termination.
The board of directors may at any
time terminate or amend the 2003 Directors Plan. No such
termination or amendment may adversely affect any outstanding
restricted stock or restricted stock units.
2004 Restricted Stock Plan
In September 2004, we adopted the 2004 Restricted Stock Plan.
The purpose of the 2004 Restricted Stock Plan is to attract,
retain and reward individuals performing services for us.
Type of Awards.
The 2004 Restricted Stock Plan allows us
to issue awards of restricted stock or units that convert into
shares of our stock. Prior to the completion of this offering,
our compensation committee will amend the plan to take into
account the recapitalization by giving effect to
the       for 1 reverse stock
split of the Class A common stock (and related adjustments)
and the substitution of new common stock for Class A2
common stock.
In the event of any increase or decrease in the number of issued
shares resulting from a subdivision or consolidation of shares
or the payment of a stock dividend or any other increase or
decrease in the number of issued shares effected without
consideration received by us, the compensation committee will
conclusively determine the adjustment to the number of shares
covered by each outstanding award.
Eligibility.
Awards may be made at the sole discretion of
the compensation committee to any of our employees that are
members of a select group of management or highly compensated
employees within the meaning of Sections 201(1), 301(a)(3)
and 401(a)(1) of the Employee Retirement Income Security Act of
1974, or to any of our directors.
Vesting may be time-based or performance-based. Vesting may be
accelerated by events such as a change in control, an initial
public offering, or a sale of our company or of substantially
all of our assets, but may not be deferred for more than ten
years.
Administration.
The compensation committee administers
the 2004 Restricted Stock Plan. The compensation committee has
the authority to interpret and construe the plan, grant awards
and determine who will receive awards and in what amounts. The
determination of the compensation committee with respect to the
interpretation and construction of the 2004 Restricted Stock
Plan is final.
Nonassignability.
Awards under the 2004 Restricted Stock
Plan are not assignable or transferable during the lifetime of
the grantee.
Restrictions on Shares Issued.
In connection with an
underwritten registered offering of any of our securities, we
may require that eligible directors not sell, dispose of,
transfer, make any short sale of, grant any option for the
purchase of, or enter into any hedging or similar transaction
having the same economic effect as a sale with respect to any
shares or other securities of our company held by the grantee,
for a period of time specified by the underwriters (not to
exceed 12 months) following the effective date of
registration.
Amendment; Termination.
The board of directors may, with
respect to shares at the time not subject to awards, terminate
or amend the plan. No such termination or amendment may, without
the grantee's consent, materially adversely affect a
previously granted award.
122
Option Grants in the Last Fiscal Year
There were no options to purchase our stock granted to our named
executive officers during the year ended December 31, 2004.
Aggregated Option Exercises in the Last Fiscal Year and
    Fiscal Year End Option Values
The following table contains information with respect to options
exercised during the year ended December 31, 2004 and the
value of unexercised options held by our named executive
officers as of December 31, 2004.
Aggregated Option Exercises in 2004
and 2004 Year End Option Values
Number of Securities
Number of
Underlying Unexercised
Value of Unexercised
Shares
Options at
In-the-Money Options at
Acquired on
Value
Fiscal Year-End(1)
Fiscal Year-End(1)
Exercise
Realized
Name
Exercisable
Unexercisable
Exercisable
Unexercisable
Jeffrey C. Sprecher(2)
0
—
651,150
675,000
$
404,843
$
0
Charles A. Vice(3)
0
—
250,100
324,150
$
134,948
$
0
Richard V. Spencer
0
—
108,050
324,150
$
0
$
0
Dr. Richard Ward
0
—
57,838
173,513
$
0
$
0
David S. Goone
0
—
215,797
256,753
$
31,961
$
2,131
Edwin D. Marcial(4)
0
—
224,675
247,875
$
134,948
$
0
(1)
The number of securities underlying unexercised options will be
    adjusted for the recapitalization at the completion of this
    offering by giving effect to
    the           for
    1 reverse stock split of the Class A common stock.
(2)
The value of unexercised in-the-money options at fiscal year-end
    was calculated by multiplying the number of securities
    underlying unexercised options at fiscal year-end by the
    difference between $2.00 (the fair value as of December 31,
    2004 as determined by the board of directors) and the strike
    price (between $1.05 and $2.00) of the option.
(3)
Mr. Sprecher is the controlling shareholder of CPEX, which
    holds 9,961,298 of our common shares. Pursuant to the CPEX Stock
    Option Plan, CPEX granted options on shares owned by CPEX to
    eight employees, two of whom (Messrs. Vice and Marcial) are
    current executive officers of our company. As of
    December 31, 2004, there were options on
    1,170,046 shares of our stock owned by CPEX under the CPEX
    Stock Option Plan. Based on the fair market value of $2.00 per
    share as of December 31, 2004 as determined by our board of
    directors, the total value of CPEX's shares in our company
    is $19.9 million, and the value of the unexercised
    in-the-money CPEX options (which are exercised against the
    outstanding CPEX shares) is $1.9 million.
(4)
Mr. Vice also holds exercisable options for 576,889 of
    CPEX's equity interest in our business pursuant to the CPEX
    Stock Option Plan. Based on the fair market value of
    $2.00 per share as of December 31, 2004 as determined
    by our board of directors, the value of the unexercised
    in-the-money CPEX options (which are exercised against the
    outstanding CPEX shares) is $1.0 million. These options may
    be exercised by payment of the exercise price to CPEX and will
    have no effect on the dilution of our common stock.
(5)
Mr. Marcial also holds exercisable options for 144,222 of
    CPEX's equity interest in our business pursuant to the CPEX
    Stock Option Plan. Based on the fair market value of $2.00 per
    share as of December 31, 2004 as determined by our board of
    directors, the value of the unexercised in-the-money CPEX
    options (which are exercised against the outstanding CPEX
    shares) is $250,944. These options may be exercised by payment
    of the exercise price to CPEX and will have no effect on the
    dilution of our common stock.
123
Limitation of Liability and Indemnification of Officers and
Directors
Our charter generally provides that our directors will not be
liable to us or to our shareholders for breach of a fiduciary
duty. Our bylaws generally provide for indemnification against
all losses actually incurred by directors and senior officers in
connection with any action, suit or proceeding relating to their
position as a director or senior officer. These provisions of
our charter and bylaws are discussed further under the heading
"Description of Capital Stock — Limitation of
Liability and Indemnification Matters".
124
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Our Formation/Original Investment
In May 2000, our Initial Shareholders entered into a limited
liability company operating agreement, which specified the
equity interests in our business of each Initial Shareholder,
MHC Investment Company and CPEX. The Initial Shareholders also
each agreed to enter into order flow agreements with us, as
discussed below. In consideration of its equity interest, CPEX
contributed all of its assets, including software, operational
know-how and intellectual property, and liabilities to us. Our
chief executive officer, Mr. Sprecher, owns substantially
all of the equity of CPEX, with the remaining equity owned by
members of Mr. Sprecher's family. MHC Investment
Company issued a perpetual, royalty-free license to use a patent
related to trading in electrical energy, and Morgan Stanley
Capital Group Inc. and The Goldman Sachs Group, Inc. agreed to
execute a term loan agreement, as discussed below.
In November 2000, the limited liability company operating
agreement was amended and restated to provide an additional
equity interest to the Gas and Power Firms, representing an
aggregate 32% interest in our business. In exchange for this
equity interest, the Gas and Power Firms agreed to make an
aggregate cash payment of $30 million in three
installments: $10 million upon issuance of the new equity
interests and two additional payments of $10 million
payable when our electronic platform became substantially
operational with respect to North American natural gas and power
products. In April 2001, the Gas and Power Firms advanced the
remaining $20 million to fulfill their agreement. The Gas
and Power Firms also entered into order flow agreements with us,
as discussed below.
Relationships with Our Initial Shareholders
CPEX Stock Option Plan
Five of our executives and employees hold options that were
granted between 1998 and 2000 under the CPEX Stock Option Plan.
These option holders include our chief operating officer and our
chief technology officer. These options give the option holder
the right to purchase shares of our common stock from CPEX, and
are fully vested. The exercise price for these options ranges
from
$          to
$           per
share. In total, there
are                     options
outstanding under the CPEX plan, which could be exercised
against CPEX's total equity stake in our business
of                      shares.
This could result in
a           %
dilution of the equity stake in our business held by
Mr. Sprecher and certain family members through CPEX.
Because the shares of our common stock that will be issued upon
exercise of these options will be issued from the shares owned
by CPEX, and not our shares, the proceeds from the exercise of
these stock options will go directly to CPEX.
CPEX Put Agreement
As a part of the transactions surrounding our formation as
described in "— Our Formation/Original
Investment", we entered into an agreement with our
predecessor company, CPEX, on May 11, 2000. Our chief
executive officer, Mr. Sprecher, owned then and continues
to own substantially all the equity interests in CPEX. Pursuant
to the agreement, CPEX conveyed all of its assets and
liabilities to us. These assets included intellectual property
that we used to develop our electronic platform. In return, we
issued to CPEX a 7.2% equity interest in our business and we
agreed to give CPEX a put option, by which CPEX could require us
to buy its equity interest in our business at the purchase price
described below, payable in cash. Upon the closing of this
offering, CPEX's equity interest in our business will
consist of
approximately           %
of our outstanding common stock. Under this put option, the
purchase price of the CPEX equity interest equals either its
fair market value or a specified minimum amount, whichever is
greater. If our securities are not publicly traded when the put
option is exercised, then fair market value is to be determined
by an investment banking firm selected by both parties. If our
securities are publicly traded, then fair market value equals
the average of bid prices for our publicly traded securities at
the close of trading on the 20 business days before the put
option is exercised. The minimum amount will equal
$5 million unless Mr. Sprecher is terminated for cause
or terminates his employment agreement without good reason, in
which case the minimum amount will equal $4 million. CPEX
owns                     of
our common shares and, based on an
$          estimated
fair market value
125
of these shares as of December 31, 2004, the fair market
value of CPEX's shares is in excess of the $5 million
threshold. Upon exercise of the put option, we can either pay
cash within 30 days of the exercise or, in certain
circumstances, we can elect to issue a promissory note and defer
payment for one year, with interest accruing on the note at a
rate of LIBOR plus 1%. CPEX has agreed to terminate the CPEX put
option in connection with a revision of CPEX's registration
rights by the date of this prospectus.
Mr. Sprecher currently owns 92.5% of the equity interest in
CPEX and holds an irrevocable proxy enabling him to vote the
remaining 7.5%. CPEX currently has no assets other than its
equity interest in IntercontinentalExchange, Inc. and conducts
no operations.
Term Loan Agreement
As part of the transactions surrounding our formation as
described in "— Our Formation/ Original
Investment", on May 11, 2000 we entered into a term
loan agreement with Goldman Sachs Credit Partners L.P., an
affiliate of The Goldman Sachs Group, Inc., and Morgan Stanley
Capital Group Inc., two of our Initial Shareholders that are
affiliated with the lead underwriters of this offering. The
agreement provided that we could borrow an aggregate principal
amount of up to $20 million or up to $10 million from
each lender, in two term loans, with each lender advancing one
half of the amount borrowed under each loan. The first term loan
was to expire on May 10, 2002 and the second term loan was
to expire on September 8, 2002. On May 8, 2002, we
amended the term loan agreement to provide that such loans would
mature on the earlier of November 11, 2002, or the fifth
day after the closing of an initial public offering of our
stock. These loans bore interest at the one-month LIBOR rate,
with interest to be compounded monthly and paid on the maturity
date. We borrowed $16.1 million under the term loan
agreement in 2000, and the entire amount, including accrued
interest, of $16.5 million was paid off in 2002. The term
loan expired on November 11, 2002, all liens associated
with the loans have been released and we have no obligations
outstanding with respect to these loans.
Other
From time to time, we have received investment banking services
from Morgan Stanley & Co. Incorporated and Goldman,
Sachs & Co., the lead underwriters of this offering and
each an affiliate of one of our Initial Shareholders. From time
to time, we have also received consulting services from Goldman,
Sachs & Co. and have entered into several foreign
exchange forward contracts with Morgan Stanley Capital Group Inc.
In connection with our launch of our electronic trade
confirmation service in April 2002, we entered into promotional
services agreements with J. Aron & Company, an
affiliate of The Goldman Sachs Group, Inc., and Morgan Stanley
Capital Group Inc., two of our Initial Shareholders that are
also affiliated with the lead underwriters of this offering, and
the Gas and Power Firms. These agreements provided that these
signatories receive discount rates for use of our electronic
trade confirmation service through November 2003, and have since
expired. No firm commitments to use this service were made in
these agreements.
Relationships with Certain Shareholders
Order Flow Agreements
We were a party to the following order flow agreements with our
Initial Shareholders, the Gas and Power Firms and other market
participants:
•
Global Precious Metals
— Under these
    order flow agreements, the following parties were each obligated
    to execute trades in global precious metals products on our
    electronic platform covering 15 million gold ounce
    equivalents per year: Deutsche Bank Sharps Pixley Inc., The
    Goldman Sachs Group, Inc., Morgan Stanley Capital Group Inc. and
    Société Générale Financial Corporation, each
    of which is one of our Initial Shareholders. The order flow
    commitments for global precious metals trading became effective
    in September 2000 and expired in August 2002. In 2002, these
    shareholders
126
in the aggregate made order flow shortfall payments to us of
    $32,000 pursuant to these order flow agreements in global
    precious metal.
•
Global Oil
— Under these order flow
    agreements, the following parties were each obligated to execute
    trades in contracts for crude oil and related products on our
    electronic platform covering 500 million barrel equivalents
    per year: BP International Limited, Elf Trading S.A., The
    Goldman Sachs Group, Inc., Morgan Stanley Capital Group Inc.,
    Société Générale Financial Corporation and S
    T Exchange Inc., each of which is one of our Initial
    Shareholders or an affiliate of one of our Initial Shareholders.
    The order flow agreements for global oil became effective in
    November 2000 and expired in October 2002. In 2002 and 2001,
    these shareholders in the aggregate made order flow shortfall
    payments to us of $2.2 million and $2.3 million,
    respectively, pursuant to these order flow agreements in global
    oil.
•
North American Natural Gas and Power
—
    Under this order flow agreement, the Gas and Power Firms, which
    are shareholders of our Company, were obligated as a group to
    execute trades in North American natural gas and power contracts
    on our electronic platform covering, in the aggregate,
    48 billion million British Thermal Units per year. The
    order flow agreement for North American natural gas and power
    became effective in July 2001 and expired in June 2003. In 2002,
    these shareholders in the aggregate made order flow shortfall
    payments to us of $6.4 million pursuant to the order flow
    agreement in North American natural gas and power.
•
European Gas and Power
— The following
    shareholder affiliates were each obligated to execute trades in
    European gas and power contracts on our electronic platform
    which would result in annual minimum commission payments of
    £200,000 in commission revenues per year: BP Gas Marketing
    Limited, Shell Energy Trading Limited, Gaseyls (an affiliate of
    Société Générale) and TotalFinaElf
    Gas & Power Limited. Non-shareholding market
    participants were also parties to these agreements. The order
    flow agreements became effective in January 2002 with respect to
    European gas contracts, were amended in April and May of 2003 to
    include European power contracts, and expired in December 2004.
    The order flow agreements also provided for revenue sharing
    arrangements that survive the expiration of the agreements and
    continue annually through 2006. Pursuant to these arrangements,
    if an order flow provider meets a threshold for trading volumes
    generated in a given period, ranging from 1.5 billion
    therms to 3.0 billion therms, that provider is entitled to
    share in a pool of 20% of our total commission revenues derived
    from trading in European gas products for that period by all
    participants, including those that are not or were not parties
    to the order flow agreements. As of December 31, 2003, none
    of the order flow providers qualified as eligible order flow
    providers in accordance with the threshold and we are no longer
    required to accrue or pay any revenue sharing amounts under
    these agreements. The order flow providers also received access
    to a specialized application programming interface, or API, that
    allows our participants to link their computer systems to our
    electronic platform. European gas order flow agreements were
    entered into with one Initial Shareholder, Morgan Stanley
    Capital Group Inc. and one affiliate of an Initial Shareholder,
    J. Aron & Company, which was similar to the other
    European gas commitments, except that minimum commitments and
    shortfalls were determined monthly and these order flow
    providers did not participate in the revenue sharing
    arrangement. In 2004, 2003 and 2002, we recognized
    $1.1 million, $703,000 and $1.1 million, respectively,
    in order flow shortfall revenues, including $540,000, $409,000
    and $728,000, respectively, relating to our shareholders.
We received total consolidated revenues of $29.4 million,
$34.0 million and $63.5 million during 2004, 2003 and
2002, respectively, from our Initial Shareholders, the Gas and
Power Firms, or affiliates of those entities. These revenues
were derived from all shareholders that own in excess of 1% of
our stock. Revenues from one of the Gas and Power Firms
comprised 10.0% of our total consolidated revenues during 2002.
No other shareholder accounted for more than 10% of total
consolidated revenues during 2004, 2003 or 2002.
Registration Rights
In connection with this offering, we intend to enter into a
registration rights agreement with CPEX, which owns
approximately                      shares
of our common stock outstanding, and substantially all of the
127
equity interests in CPEX are owned by Mr. Sprecher, our
chief executive officer, and members of his family. Under this
agreement, CPEX, or Mr. Sprecher, will be entitled to
require us to register the common stock CPEX currently holds for
resale into the public market, but only if
Mr. Sprecher's employment has been terminated by us
without cause or by him for good reason.
In addition, we intend to enter into a registration rights
agreement with designated shareholders who may acquire new
common stock upon the conversion of shares of their
Class A2 common stock. The agreement will provide for the
registration under the Securities Act and the offering of common
stock from time to time following this offering, and will
contain provisions relating to demand rights, piggy-back rights,
conversion rights and lock-ups, among others.
Shareholders' Agreement
On June 14, 2001, the Initial Shareholders and Gas and
Power Firms entered into a Shareholders' Agreement. This
agreement provides, among other things, that the Gas and Power
Firms as a group may nominate four directors to our board of
directors and each of BP Exploration & Oil, Inc., CPEX,
Elf Trading Inc., The Goldman Sachs Group, Inc., Morgan Stanley
Capital Group Inc., Société Générale
Financial Corporation and S T Exchange Inc., or the Nominating
Shareholders, may each nominate one director, and that all
parties to the agreement would vote their shares in favor of
each other's nominee. This agreement also provided that the
Nominating Shareholders would nominate and elect the chief
executive officer and the chairman of IPE Holdings Plc to our
board of directors as long as our Class B redeemable common
stock remained outstanding. Pursuant to this agreement, since
the elimination of our Class B redeemable common stock, the
Nominating Shareholders have been required to nominate either
the chief executive officer or the chairman of IPE Holdings Plc
to our board of directors, rather than both. This agreement also
provides for the Gas and Power Firms to receive shares from the
Initial Shareholders in order to ensure that the value of their
shares is not diluted. In addition, the agreement places
restrictions on the use of proxies and voting trusts with
unaffiliated entities. The Shareholders' Agreement will
terminate upon the closing of this offering.
Loan to Mr. Sprecher
In December 2001, our board of directors agreed to loan
Mr. Sprecher, our chief executive officer, an amount
corresponding to the income tax liability that accrued in CPEX
as a result of CPEX's ownership interest in our business
from the time of the formation of IntercontinentalExchange, LLC
until our assumption of corporate form on June 15, 2001.
This loan was made pursuant to the requirements of the limited
liability company operating agreement of
IntercontinentalExchange, LLC, dated as of May 11, 2000. As
of December 2001, CPEX had accrued a tax liability of $503,000.
The board of directors agreed to forgive this loan over a
five-year period, with the first installment (20% of the
$503,000 tax liability) forgiven in December 2001, and the
remaining amount forgiven in equal installments in December of
each of the four following years, provided that
Mr. Sprecher continued to serve as our chief executive
officer. The board also agreed to gross up
Mr. Sprecher's compensation for the tax liability
associated with this loan forgiveness. In December 2004, the
board accelerated forgiveness of the final two installments. As
a result, no balance remained outstanding with respect to this
loan as of December 31, 2004. The amounts forgiven under
this arrangement and related gross ups are included in
Mr. Sprecher's compensation as described under the
heading "Management — Executive
Compensation".
Relationships with Our Directors
CCX Agreement
One of our directors, Richard L. Sandor, is also the Chairman,
Chief Executive Officer and principal owner of the Chicago
Climate Exchange, Inc., or CCX, which operates futures and OTC
markets for the trading of emissions. In July 2003, we entered
into an agreement with CCX to provide hosting services for the
trading of CCX emissions on our electronic platform. Under this
agreement, CCX is required to pay us an annual license fee of
$725,000 and an annual service fee of $500,000. CCX is also
required to pay us for certain technology development work at an
agreed upon rate. In 2004 and 2003, CCX paid us
$1.7 million and
128
$605,000, respectively, pursuant to this agreement. The initial
term of this agreement expires in December 2006. The terms of
this agreement provide for automatic renewal for additional one
year periods following the expiration of the initial term,
unless either party provides at least six months' notice of
its intention not to renew.
In May 2004, we entered into a listing agreement with CCX under
which we agreed to allow CCX to make certain emissions contracts
available for trading in its emissions trading market, which we
host on our platform, and to delist such contracts from trading
on our platform. Pursuant to this agreement, CCX is obligated to
pay us 10% of the gross revenues earned by CCX in connection
with trading in these contracts.
In August 2004, we entered into a license agreement with CCX in
respect of certain CCX intellectual property relating to an
emission reduction trading system and method. Pursuant to our
agreement, CCX granted to us, our affiliates (including the IPE)
and any of our contractors, agents and service providers a
perpetual, non-exclusive, royalty-free license, including any
patents or related applications thereto, in relation to such
intellectual property. Pursuant to the terms of this agreement,
we also acknowledged CCX's ownership of the intellectual
property and agreed not to challenge the ownership, validity or
enforceability of the intellectual property.
In addition, in August 2004, the IPE entered into a Cooperation
and Licensing Agreement with CCX. Pursuant to this agreement,
CCX and the IPE formed a cooperative relationship for the
purposes of promoting the development of a European emissions
trading market through, in particular, the trading of emissions
contracts on our electronic platform. The agreement provides for
CCX to fund IPE development and operating costs in relation to
the emissions contracts. CCX will then receive 75% of net
transaction fee income from the emissions contracts (after the
deduction of operating costs). In December 2004, the European
Climate Exchange, or ECX, which is a subsidiary of CCX, acceded
to the terms of the Cooperation and Licensing Agreement.
Emissions contracts refer to any cash or spot or futures
contract for European emissions allowances traded on our
platform pursuant to this agreement. Consistent with, and
subject to, its legal and regulatory obligations and the
provisions of this agreement, the IPE has agreed, among other
obligations, to:
•
use commercially reasonable efforts to cooperate with CCX in the
    design and listing of the emissions contracts;
•
manage, in cooperation with us, the process of modifying our
    electronic platform and other hardware and software as necessary
    to allow the trading of the emissions contracts;
•
provide required market supervision, compliance and regulatory
    arrangements; and
•
obtain the necessary regulatory approvals to allow the trading
    of the emissions contracts from trading screens located in the
    United Kingdom, Germany, France, the Netherlands, Switzerland,
    Sweden, Norway, the United States, and such other countries as
    the IPE and CCX from time to time agree.
The initial term of this agreement concludes on the later of
December 31, 2007 and the date on which Phase I of the
European Emissions Allowances Trading Scheme terminates, unless
sooner terminated pursuant to special termination provisions of
the agreement. The terms of this agreement provide for automatic
renewal periods of one year following the conclusion of the
initial term, unless terminated earlier by either party upon
written notice provided no later than twelve months prior to the
end of the initial term, or three months prior to the end of any
renewal period.
Financial Printing
One of our directors, Vincent Tese, is a member of the board of
directors of Bowne & Co., Inc., a financial printer. We
have engaged the services of Bowne in connection with this
offering and expect to pay Bowne customary fees. We have not
made any payments under this arrangement to date.
129
Intercompany Agreements
License and Services Agreements
In May 2003, we entered into a Software License Agreement and an
Atlanta Services Agreement with our subsidiary, the IPE,
pursuant to which we provide the IPE with access to our
electronic platform. Pursuant to the Software License Agreement,
we have granted the IPE a license to use software related to our
electronic platform, which the IPE may sub-license to its
members and their participants. The Atlanta Services Agreement
requires us to provide hosting, helpdesk and other services to
the IPE. These agreements are designed to assist the IPE in
meeting certain of its regulatory obligations as an RIE. The IPE
is required to pay us for the license and related services
pursuant to the terms of the agreements, which have been set on
the same basis as we would negotiate with an unrelated third
party. Similar agreements exist between the IPE and two of our
other U.K.-based subsidiaries in respect of disaster recovery
services and U.K. helpdesk services.
Other
Kelly L. Loeffler, a corporate officer and our vice
president, investor and public relations, is married to
Jeffrey C. Sprecher, our Chairman and Chief Executive
Officer. Since joining our company in September 2002,
Ms. Loeffler has reported directly to Richard V.
Spencer, our Chief Financial Officer. In 2004, Ms. Loeffler
received total cash compensation of approximately $200,000.
130
PRINCIPAL AND SELLING SHAREHOLDERS
The table below sets forth information regarding the beneficial
ownership of our common stock on an actual basis as of the date
of this prospectus (giving effect to
the           for
1 reverse stock split and assuming full conversion of all
outstanding Class A shares into shares of new common
stock), and as adjusted to reflect the sale of our common stock
in this offering with respect to:
•
each person we know to be the beneficial owner of 5% or more of
    our outstanding shares of common stock;
•
each of our executive officers named in the Summary Compensation
    Table above under the heading "Management";
•
each of our directors;
•
all of our executive officers and directors as a group; and
•
the selling shareholders.
The shares of common stock sold in the offering by the selling
shareholders will result from the conversion of Class A2
shares concurrently with the consummation of such sale. The
shareholders listed below will not own any shares of new common
stock until the first date designated for optional conversion.
Beneficial ownership is determined under the rules of the SEC
and generally includes voting or investment power over
securities. Except in cases where community property laws apply
or as indicated in the footnotes to this table, we believe that
each shareholder identified in the table possesses sole voting
and investment power over all shares of common stock shown as
beneficially owned by the shareholder. Percentage of beneficial
ownership is based
on                      shares
of common stock outstanding as of the date of this prospectus.
Shares of common stock subject to options that are currently
exercisable or exercisable within 60 days of the date of
this prospectus are considered outstanding and beneficially
owned by the person holding the options for the purpose of
computing the percentage ownership of that person but are not
treated as outstanding for the purpose of computing the
percentage ownership of any other person. This table does not
reflect                      shares
that the underwriters have an option to purchase from the
selling shareholders. As of the date of this prospectus, our
common stock was held by 115 shareholders of record. Unless
indicated below, the address of each individual listed below is
2100 RiverEdge Parkway, Suite 500, Atlanta, Georgia 30328.
Shares Beneficially Owned
Shares Beneficially
Before the Offering
Owned After the
Offering
Class A
Common Stock
Shares
Common Stock
Being
Name and Address of Beneficial Owner
Shares
Percentage
Offered
Shares
Percentage
Morgan Stanley Capital Group Inc.
2000 Westchester Avenue, Floor 1,
Purchase, NY 10577
14.85
%
The Goldman Sachs Group, Inc.
85 Broad Street
New York, NY 10004
14.24
Total Investments USA Inc.
1105 N. Market Street, Suite 1442,
Wilmington, DE 19899
9.44
BP Exploration and Oil Inc.
28100 Torch Parkway
Warrenville, IL 60555
8.84
Société Générale Financial Corporation
Decc/Cot Tour Société Générale
17 Cours Valmy 92987
Paris Le Defense Cedex France
8.27
131
Shares Beneficially Owned
Shares Beneficially
Before the Offering
Owned After the
Offering
Class A
Common Stock
Shares
Common Stock
Being
Name and Address of Beneficial Owner
Shares
Percentage
Offered
Shares
Percentage
S T Exchange Inc.
80 Strand
London WC2R OZA
United Kingdom
6.80
AEP Energy Services
1 Riverside Plaza
Columbus, OH 43215-2373
5.60
Mirant Americas Energy
Marketing, LP
1155 Perimeter Center, West Suite 130
Atlanta, GA 30338
11,143,166
5.27
Duke Energy Trading Exchange, LLC(1)
5400 Westheimer
Houston, TX 77056
10,648,094
5.04
CPEX(1)(2) C/O
IntercontinentalExchange
2100 RiverEdge Parkway, Suite 500
Atlanta, GA 30328
9,961,298
4.71
El Paso Merchant Energy North America Company(1)
PO Box 2511,
Houston, TX 77252-2511
9,791,122
4.63
Directors and Executive Officers
Charles R. Crisp(6)
*
Jean-Marc Forneri(6)
*
David S. Goone(3)
*
Edwin Marcial(3)(5)
*
Sir Robert Reid(6)
*
Frederic V. Salerno(6)
*
Richard L. Sandor(6)
*
Johnathan H. Short(3)
*
Richard V. Spencer(3)
*
Jeffrey C. Sprecher(2)(3)
*
Judith A. Sprieser(6)
*
Vincent Tese(6)
*
Charles A. Vice(3)(4)
*
Richard Ward(3)
International House
1 St Katherine's Way
London E1W1UY
United Kingdom
*
All directors and executive officers as a group (14 persons):
Selling shareholders as a group
*
Represents less than 1%.
(1)
Although these parties are not five percent shareholders, they
    are included in this table because they are part of a
    shareholders' agreement with the five percent shareholders.
132
(2)
CPEX figures
    include                     of
    our common shares held by CPEX,
    and                     stock
    options that are exercisable within 60 days of the date of
    this prospectus. Pursuant to the CPEX Stock Option Plan, CPEX
    granted options on shares owned by CPEX to eight employees, two
    of whom are current executive officers of our company. As of the
    date of this prospectus, there are options
    on                      shares
    of our stock owned by CPEX under the CPEX Stock Option Plan.
(3)
Executive officer beneficial ownership levels include stock
    options exercisable within 60 days of the date of this
    prospectus under the 2000 Stock Option Plan, and restricted
    stock unit awards that vest within 60 days of the date of
    this prospectus, under the 2004 Restricted Stock Plan.
(4)
Mr. Vice also holds exercisable options
    for                     of
    CPEX's equity interest in our business pursuant to the CPEX
    Stock Option Plan. These options may be exercised by payment to
    CPEX and will have no effect on the dilution of our common stock.
(5)
Mr. Marcial also holds exercisable options
    for                     of
    CPEX's equity interest in our business pursuant to the CPEX
    Stock Option Plan. These options may be exercised by payment to
    CPEX and will have no effect on the dilution of our common stock.
(6)
Director beneficial ownership levels include stock options
    exercisable within 60 days of the date of this prospectus
    under the 2000 Stock Option Plan, restricted stock unit awards
    that vest within 60 days of the date of this prospectus
    under the 2004 Restricted Stock Plan, and restricted stock unit
    awards that vest within 60 days of the date of this
    prospectus under the 2003 Directors Plan.
133
ORGANIZATION AND RECAPITALIZATION
Formation of IntercontinentalExchange, Inc.
On May 11, 2000, IntercontinentalExchange LLC, or the LLC,
our predecessor entity, was formed as a Delaware limited
liability company. Subsequent to its formation, the LLC created
a wholly-owned subsidiary, IntercontinentalExchange, Inc., a
Delaware corporation, to provide stock options to our employees.
The original members of the LLC were BP Exploration &
Oil Inc., Continental Power Exchange, Inc., Deutsche Bank Sharps
Pixely Inc., Elf Trading Inc., The Goldman Sachs Group, Inc.,
MHC Investment Company, Morgan Stanley Capital Group Inc.,
Société Générale Financial Corporation and S
T Exchange Inc. Upon the LLC's formation, CPEX, a company
owned by our founder, chairman and chief executive officer,
Jeffrey C. Sprecher, contributed to the LLC all of its assets
and liabilities. At the same time, MHC Investment Company
contributed intellectual property rights related to our
electronic platform, and our Initial Shareholders entered into
order flow agreements with us, providing for these Initial
Shareholders to execute a minimum annual volume of transactions
through our electronic platform.
In November 2000, the original members of the LLC amended and
restated the LLC agreement to provide for the issuance of
additional membership interests to the Gas and Power Firms. The
Gas and Power Firms that are currently shareholders are: AEP
Energy Services, Inc., Duke Energy Trading Exchange, LLC,
El Paso Merchant Energy North America Company and Mirant
Americas Energy Marketing, L.P. Two additional Gas and Power
Firms, Aquila Southwest Processing, L.P. and Reliant Energy
Trading Exchange, Inc., are no longer shareholders. The Gas and
Power Firms entered into an order flow agreement providing for
these members, in the aggregate, to execute a minimum annual
volume of transactions on our electronic platform and they made
a combined $30.0 million cash payment. In connection with
their acquisition of an interest in the LLC, the LLC granted the
Gas and Power Firms warrants to purchase additional membership
interests representing an additional 10% profit-sharing and
voting interest in our business, subject to dilution. The
warrants expired unvested on September 30, 2004.
On June 15, 2001, in connection with our acquisition of the
IPE described below, the LLC merged into its subsidiary,
IntercontinentalExchange, Inc., which was the surviving entity.
Each of the members of the LLC exchanged its rights and
interests in the LLC for a proportionate number of shares of
Class A common stock, Series 2 of
IntercontinentalExchange, Inc., which we refer to as our
Class A2 shares, and the LLC was dissolved.
Acquisition of IPE Holdings Plc/ Subsequent Redemption of
Class B Redeemable Common Stock
On June 18, 2001, we acquired IPE Holdings Plc in a
share-for-share exchange. IPE Holdings Plc is the owner of the
IPE. In this exchange, each IPE Holdings Plc shareholder
received one share of Class B redeemable common stock,
which we refer to as our Class B shares, and one share of
our Class A common stock, Series 1, which we refer to
as our Class A1 shares, in exchange for each of their
IPE Holdings Plc shares. Under the terms of the Class B
shares, the holders would have the right to require us to redeem
their shares one year after the IPE's two principal futures
contracts traded exclusively on our electronic platform for a
ten consecutive day period. The Class B shares were
redeemable at a price of $5.895 per share, or
$67.5 million in the aggregate.
In November 2004, although the conditions for a redemption
callable by the holders of the Class B shares had not yet
been met, we determined that it was advisable to undertake an
early redemption of the Class B shares. Pursuant to an
amendment to our charter approved by our shareholders, we
undertook an early redemption of the Class B shares on
November 23, 2004. In connection with the early redemption,
we redeemed the Class B shares of all holders at a price of
$5.895 per share, for an aggregate redemption price of
$67.5 million. The Class B shares cannot be reissued,
and upon their redemption became undesignated shares of common
stock.
134
Recapitalization
Our board of directors has approved a plan for the
recapitalization of our outstanding equity that will take effect
upon the closing of this offering. This plan, which we refer to
as the recapitalization, will simplify our capital structure
following this offering and will bring our corporate governance
procedures in line with those of other public companies. The
recapitalization will include the following events:
•
Creation of a new class of common stock.
Our
    charter will be amended and restated to provide for a new class
    of common stock, par value $0.01 per share, which we refer
    to as our new common stock, to be issued to investors who
    purchase shares in this offering.
•
Addition of an optional conversion right to the
    outstanding Class A1 shares and
    Class A2 shares.
Our charter will also be
    amended to provide holders of our outstanding
    Class A1 shares and Class A2 shares a right
    to convert these shares into shares of our new common stock at
    the holder's option, subject to such conditions as our
    board of directors may deem appropriate. All other rights and
    restrictions on our Class A1 shares and
    Class A2 shares will remain intact unless and until
    these shares are converted. The optional conversion right may be
    exercised by any holder of Class A2 shares as necessary to
    enable it to sell shares of new common stock in this offering
    and otherwise at any time (i) by any holder of
    Class A1 shares (other than holders who also own
    Class A2 shares) beginning on the date 90 days after
    the completion of this offering or (ii) by any holder of
    Class A2 shares beginning on the date 180 days after
    the completion of this offering.
•
Creation of a new class of undesignated preferred
    stock.
Our charter will be amended to create a class of
    undesignated preferred stock, the terms of which may be
    established by our board of directors from time to time.
•
Modification of our corporate governance
    provisions.
Our charter and bylaws will be amended and
    restated to add, delete and change various provisions relating
    to the governance of our company to include provisions customary
    for public companies, such as customary anti-takeover provisions.
•
Other changes.
Our charter and bylaws will also be
    amended and restated to make other minor changes, such as:
•
a reclassification, or reverse stock split, of our authorized
    and outstanding Class A1 shares and
    Class A2 shares based on a ratio
    of                     ;
    and
•
the removal of references to the Class B shares from the
    charter.
We describe the material terms of the amended and restated
charter and bylaws as they will be in effect as of the closing
of this offering under the heading "Description of Capital
Stock".
The recapitalization, including all the steps discussed above,
will take effect upon the closing of this offering. We need to
obtain the approval of at least 75% of our shareholders (voting
as a single class) to carry out various aspects of the
recapitalization, and we expect to obtain all necessary
approvals prior to the closing. Consequently, all information in
this prospectus assumes that the recapitalization has occurred,
including the       for 1
reverse stock split of the Class A common stock, unless
otherwise specified.
In this prospectus, we refer to our Class A1 shares
and our Class A2 shares, collectively, as our
Class A common stock. We refer to our Class A common
stock and shares of our new common stock, collectively, as our
common stock. Any shares of common stock to be sold by the
selling shareholders in this offering will be
Class A2 shares held by such holder that will be
converted into shares of new common stock concurrently with the
closing of this offering.
135
DESCRIPTION OF CAPITAL STOCK
The following descriptions are summaries of the material
terms of our amended and restated charter and bylaws as each
will be in effect upon the closing of this offering. They may
not contain all of the information that is important to you. To
understand them fully, you should read our amended and restated
charter and bylaws, copies of which are filed with the SEC as
exhibits to the registration statement of which this prospectus
is a part. The following descriptions are qualified in their
entirety by reference to the amended and restated charter and
bylaws and applicable law.
Pursuant to our amended and restated charter, our authorized
capital stock consists of 300,000,000 shares, each with a
par value of $0.01 per share, of which:
•
25,000,000 shares are designated as preferred
    stock; and
•
275,000,000 shares are designated as common stock, divided
    into the following classes:
•
shares
    are designated as common stock, which we refer to as new common
    stock,                      shares
    of which will be outstanding upon the completion of this
    offering; and
•
shares
    are designated as Class A common stock, divided into two
    series: Class A, Series 1 common stock and Class A,
    Series 2 common stock, of
    which                      shares
    and                      shares,
    respectively, will be outstanding upon the completion of this
    offering.
In this prospectus, unless the context otherwise requires, we
refer to the new common stock and the Class A common stock,
collectively, as our common stock. All outstanding shares of
common stock are, and the shares of common stock offered hereby
will be, when issued and sold, validly issued, fully paid and
nonassessable.
Preferred Stock
Our authorized capital stock includes 25,000,000 shares of
preferred stock. Our board of directors is authorized to divide
the preferred stock into series and, with respect to each
series, to determine the designations and the powers,
preferences and rights, and the qualifications, limitations and
restrictions thereof, including the dividend rights, conversion
or exchange rights, voting rights, redemption rights and terms,
liquidation preferences, sinking fund provisions and the number
of shares constituting the series. Our board of directors could,
without shareholder approval, issue preferred stock with voting
and other rights that could adversely affect the voting power of
the holders of common stock and which could have certain
anti-takeover effects.
Subject to the rights of the holders of any series of preferred
stock, the number of authorized shares of any series of
preferred stock may be increased or decreased (but not below the
number of shares thereof then outstanding) by resolution adopted
by our board of directors and approved by the affirmative vote
of the holders of a majority of the voting power of all
outstanding shares of capital stock entitled to vote on the
matter, voting together as a single class.
Common Stock
Except for the conversion rights and restrictions on transfer
relating to our Class A1 shares and our Class
A2 shares and other matters described below, and subject to
the rights and preferences of the holders of preferred stock at
any time outstanding, our new common stock, our
Class A1 shares and our Class A2 shares have
the same rights and privileges and rank equally, share ratably
and are identical in respect as to all matters, including rights
in liquidation.
•
Voting:
Each holder of shares of new common stock and
    Class A common stock is entitled to one vote for each share
    owned of record on all matters submitted to a vote of
    shareholders. Except as otherwise required by law or as
    described below, holders of shares of new common stock,
    Class A1 shares and Class A2 shares will
    vote together as a single class on all matters presented to the
    stockholders for their vote or approval, including the election
    of directors.
136
There are no cumulative voting rights. Accordingly, the holders
of a majority of the total shares of new common stock,
Class A1 shares and Class A2 shares voting
for the election of directors can elect all the directors if
they choose to do so, subject to the voting rights of holders of
any preferred stock to elect directors.
In the event of a class or series vote to approve a change in
the rights or special powers of any class or series of
Class A common stock, two-thirds of the affected class or
series must approve the change, except that in the case of an
amendment to the rights or special powers of the
Class A1 shares, the holders of
Class A1 shares who also hold
Class A2 shares and their affiliates are excluded.
•
Dividends and distributions:
The holders of shares of new
    common stock and Class A common stock have an equal right
    to receive dividends and distributions, whether payable in cash
    or otherwise, as may be declared from time to time by our board
    of directors from legally available funds. If a dividend or
    distribution is payable on the Class A common stock, we
    must also make a pro rata and simultaneous dividend or
    distribution on the new common stock. Conversely, if a dividend
    or distribution is paid or payable on the new common stock, we
    must also make a pro rata and simultaneous dividend or
    distribution on the Class A common stock.
•
Liquidation, dissolution or winding-up:
In the event of
    our liquidation, dissolution or winding-up, holders of the
    shares of new common stock and Class A common stock are
    entitled to share equally, share-for-share, in the assets
    available for distribution after payment of all creditors and
    the liquidation preferences of our preferred stock.
•
Restrictions on transfer:
Our charter continues to
    restrict the transfer of shares of Class A common stock.
    Class A1 shares may be transferred only with the
    board's consent, which may not be unreasonably withheld.
    Class A2 shares may be transferred only in accordance
    with our bylaws or with the approval of our board of directors,
    in its sole discretion, other than transfers to an affiliate or
    to another holder of Class A2 shares. Neither our
    charter nor our bylaws contain any restrictions on the transfer
    of shares of new common stock. In the case of any transfer of
    shares, there may be restrictions imposed by applicable
    securities laws. We describe these transfer restrictions under
    the heading "Shares Eligible for Future Sale".
•
Redemption, conversion or preemptive rights:
Holders of
    shares of new common stock and Class A common stock have no
    redemption or conversion rights or preemptive rights to purchase
    or subscribe for our securities, except for holders of shares of
    our Class A common stock who have an optional conversion
    right to convert any shares of Class A common stock into
    shares of new common stock at a ratio of one-to-one, after
    giving effect to the reverse stock split. The board may specify
    any conditions to conversion the board deems to be appropriate
    and has determined that, other than shares of Class A
    common stock to be converted and sold by the selling
    shareholders in this offering, the holders of
    Class A1 shares may only exercise the conversion right
    at any time or from time to time following the date 90 days
    after the closing of this offering and the holders of
    Class A2 shares may do so only following the date
    180 days after the closing of this offering. Once
    authorized by the board, the shares of Class A common stock
    are convertible at the holder's option. Upon conversion,
    the shares of common stock would not be subject to restrictions
    on transfer that applied to the shares of Class A common
    stock prior to conversion, except to the extent such
    restrictions are imposed under applicable securities laws.
•
Other Provisions:
There are no redemption provisions or
    sinking fund provisions applicable to either the new common
    stock or the Class A common stock, nor is the new common
    stock or Class A common stock subject to calls or
    assessments by us.
The rights, preferences, and privileges of the holders of new
common stock and Class A common stock are subject to and
may be adversely affected by, the rights of the holders of any
series of preferred stock which we may designate and issue in
the future. As of the date of this prospectus, there are no
shares of preferred stock outstanding.
137
Limitation of Liability and Indemnification Matters
Our charter provides that none of our directors will be liable
to us or our shareholders for monetary damages for breach of
fiduciary duty as a director, except in those cases in which
liability is mandated by the Delaware General Corporation Law,
or DGCL, and except for liability for breach of the
director's duty of loyalty, acts or omissions not in good
faith or involving intentional misconduct or a knowing violation
of law, or any transaction from which the director derived any
improper personal benefit. Our bylaws provide for
indemnification, to the fullest extent permitted by law, of any
person made or threatened to be made a party to any action, suit
or proceeding by reason of the fact that such person is or was
one of our directors or senior officers or, at our request,
serves or served as a director, officer, employee or agent of
any other enterprise, against all expenses, liabilities, losses
and claims actually incurred or suffered by such person in
connection with the action, suit or proceeding. Our bylaws also
provide that, to the extent authorized from time to time by our
board of directors, we may provide to any one or more other
persons rights of indemnification and rights to receive payment
or reimbursement of expenses, including attorneys' fees.
Section 203 of the Delaware General Corporation Law
We are subject to the provisions of Section 203 of the
DGCL. In general, Section 203 prohibits a publicly held
Delaware corporation from engaging in a business combination
with an interested shareholder for a period of three years after
the date of the transaction in which the person became an
interested shareholder, unless the business combination is
approved in a prescribed manner. A business combination includes
a merger, asset sale or a transaction resulting in a financial
benefit to the interested shareholder. An interested shareholder
is a person who, together with affiliates and associates, owns
(or, in certain cases, within three years prior, did own) 15% or
more of the corporation's outstanding voting stock. Under
Section 203, a business combination between us and an
interested shareholder is prohibited during the relevant
three-year period unless it satisfies one of the following
conditions:
•
prior to the time the shareholder became an interested
    shareholder, our board of directors approved either the business
    combination or the transaction that resulted in the shareholder
    becoming an interested shareholder;
•
on consummation of the transaction that resulted in the
    shareholder becoming an interested shareholder, the interested
    shareholder owned at least 85% of our voting stock outstanding
    at the time the transaction commenced (excluding, for purposes
    of determining the number of shares outstanding, shares owned by
    persons who are directors and officers); or
•
the business combination is approved by our board of directors
    and authorized at an annual or special meeting of the
    shareholders by the affirmative vote of at least
    66
2
/
3
%
    of our outstanding voting stock that is not owned by the
    interested shareholder.
Certain Anti-Takeover Matters
Our charter and bylaws include a number of provisions that may
have the effect of encouraging persons considering unsolicited
tender offers or other unilateral takeover proposals to
negotiate with our board of directors rather than pursue
non-negotiated takeover attempts. These provisions include:
Board of Directors
Vacancies and newly created seats on our board may be filled
only by our board of directors. Only our board of directors may
determine the number of directors on our board. The inability of
shareholders to determine the number of directors or to fill
vacancies or newly created seats on the board makes it more
difficult to change the composition of our board of directors,
but these provisions promote a continuity of existing management.
138
Advance Notice Requirements
Our bylaws establish advance notice procedures with regard to
shareholder proposals relating to the nomination of candidates
for election as directors or new business to be brought before
meetings of our shareholders. These procedures provide that
notice of such shareholder proposals must be timely given in
writing to our secretary prior to the meeting at which the
action is to be taken. Generally, to be timely, notice must be
received at our principal executive offices not less than
90 days nor more than 120 days prior to the first
anniversary date of the annual meeting for the preceding year.
The notice must contain certain information specified in the
bylaws.
Adjournment of Meetings of Shareholders Without a
    Shareholder Vote
Our bylaws permit the chairman of the meeting of shareholders,
who is appointed by the board of directors, to adjourn any
meeting of shareholders for a reasonable period of time without
a shareholder vote.
Special Meetings of Shareholders
Our bylaws provide that special meetings of the shareholders may
be called by the board of directors, the chairman of the board,
the chief executive officer, or at the request of holders of at
least 50% of the shares of common stock outstanding at the time.
No Written Consent of Shareholders
Our charter requires all shareholder actions to be taken by a
vote of the shareholders at an annual or special meeting. Our
charter generally does not permit our shareholders to act by
written consent without a meeting, other than for certain class
votes by holders of the Class A common stock.
Amendment of Bylaws and Charter
Our charter requires the approval of not less than
66
2
/
3
%
of the voting power of all outstanding shares of our capital
stock entitled to vote to amend any bylaw by shareholder action
or to amend the charter provisions described in this section.
This supermajority voting requirement makes it more difficult to
alter the anti-takeover provisions of our bylaws and our
charter. Our charter also authorizes the board of directors to
amend the bylaws at any time without shareholder action.
Blank Check Preferred Stock
Our charter provides for 25,000,000 authorized shares of
preferred stock. The existence of authorized but unissued shares
of preferred stock may enable the board of directors to render
more difficult or to discourage an attempt to obtain control of
us by means of a merger, tender offer, proxy contest or
otherwise. For example, if in the due exercise of its fiduciary
obligations, our board of directors were to determine that a
takeover proposal is not in our best interests, the board of
directors could cause shares of preferred stock to be issued
without shareholder approval in one or more private offerings or
other transactions that might dilute the voting or other rights
of the proposed acquirer or insurgent shareholder or shareholder
group. In this regard, the charter grants our board of directors
broad power to establish the rights and preferences of
authorized and unissued shares of preferred stock. The issuance
of shares of preferred stock could decrease the amount of
earnings and assets available for distribution to holders of
shares of common stock. The issuance may also adversely affect
the rights and powers, including voting rights, of such holders
and may have the effect of delaying, deterring or preventing a
change in control. The board of directors currently does not
intend to seek shareholder approval prior to any issuance of
shares of preferred stock, unless otherwise required by law.
Listing
We will apply to have our common stock listed on the New York
Stock Exchange under the symbol "ICE".
Transfer Agent
The transfer agent for our common stock is Computershare
Investor Services.
139
SHARES ELIGIBLE FOR FUTURE SALE
Prior to this offering, there has been no public market for our
common stock. Future sales of substantial amounts of common
stock (or Class A common stock prior to its conversion into
common stock) in the public market, or the perception that such
sales may occur, could adversely affect the market price of our
common stock.
Upon the completion of this offering, we will
have                      shares
of common stock outstanding, which includes
the                      shares
of new common stock sold by us in this
offering,                     Class A1
shares
and                     Class A2
shares.
All of the shares of our common stock to be sold in this
offering will be freely tradable without restriction or further
registration under the Securities Act of 1933, or the Securities
Act, except for any such shares that may be held or acquired by
our affiliates, as that term is defined in Rule 144
promulgated under the Securities Act, which shares will be
subject to the volume limitations and other restrictions of
Rule 144 described below.
Sales of Restricted Shares
An aggregate
of                      shares
of common stock
(representing                     Class A1
shares
and                     Class A2
shares) held by our existing shareholders upon completion of
this offering will be "restricted securities", as that
phrase is defined in Rule 144. These shares may not be
resold in the absence of registration under the Securities Act
or pursuant to an exemption from such registration, including
among others, the exemptions provided by Rule 144, 144(k)
or 701 under the Securities Act, which rules are summarized
below. Taking into account the lockup agreements described below
and the provisions of Rules 144, 144(k) and
701,                      shares
of Class A common stock will be available for sale in the
public market as follows:
•
Class A1
    shares will be available for immediate sale on the date of this
    prospectus pursuant to Rule 144(k); and
•
Class A2
    shares will be available for sale after the date of this
    prospectus and the expiration date for the lockup agreements
    pursuant to Rule 144(k).
Assuming all outstanding Class A1 shares are converted into
shares of common
stock,                      shares
of common stock will be available for sale beginning on the date
90 days following the closing of this offering pursuant to
Rule 144(k). Assuming all outstanding Class A2 shares
are converted into shares of common
stock,                      shares
of common stock will be available for sale beginning on the date
180 days following the closing of this offering pursuant to
Rule 144(k).
Rule 144
In general, under Rule 144 as currently in effect,
beginning 90 days after the date of this prospectus, a
person who has beneficially owned restricted shares for at least
one year, including a person who may be deemed to be our
affiliate, would be entitled to sell within any three-month
period a number of shares that does not exceed the greater of:
•
1.0% of the number of shares of common stock then outstanding,
    which will equal
    approximately                      shares
    immediately after this offering; or
•
the average weekly trading volume of our common stock on the New
    York Stock Exchange during the four calendar weeks before a
    notice of the sale on Form 144 is filed.
For purposes of applying this volume limit, sales by certain
related persons and sales by persons acting in concert must be
aggregated. In addition, sales under Rule 144 must be made
in unsolicited brokers' transactions and must be disclosed
in a notice filing with the SEC. For an affiliate, some of these
requirements would also apply to sales of unrestricted shares.
140
Rule 144(k)
Under Rule 144(k), a person who is not deemed to have been
one of our affiliates at any time during the three months
preceding a sale, and who has beneficially owned the shares
proposed to be sold for at least two years, including the
holding period of any prior owner other than an affiliate, is
entitled to sell these shares without complying with the manner
of sale, public information, volume limitation or notice
provisions of Rule 144.
Rule 701
Securities issued in reliance on Rule 701, such as shares
of common stock acquired upon exercise of options granted under
our stock option plans, are also restricted and, beginning
90 days after the effective date of this prospectus, may be
sold by shareholders other than our affiliates subject only to
the manner of sale provisions of Rule 144 and by affiliates
under Rule 144 without compliance with its one-year holding
period requirement.
Lockup Agreements
Notwithstanding the foregoing, we and the holders of
approximately           %
of our shares outstanding
and           %
of our shares issuable under options and grants outstanding as
of           ,
2005 — including our directors and officers, the
Initial Shareholders and the Gas and Power Firms —
have agreed that, for a period of 180 days following the
date of this prospectus, we and they will not, without the prior
written consent of Morgan Stanley & Co. Incorporated
and Goldman, Sachs & Co., dispose of, directly or
indirectly (including by means of any hedge that results in a
short sale or any swap or other arrangement that transfers any
of the economic consequences of ownership of the shares to
another party), any shares of our common stock, any option to
acquire our common stock or any securities convertible into or
exchangeable for our common stock, subject to certain exceptions
including:
•
sales made in this offering and the conversion of
    Class A2 shares into new common stock in connection
    therewith; and
•
in our case, issuances upon exercise of outstanding options or
    pursuant to existing employee plans.
However, Morgan Stanley & Co. Incorporated and Goldman,
Sachs & Co., in their sole discretion, may release any
of the securities subject to lockup agreements, at any time
without notice.
Additional Shares that May be Registered
In connection with this offering, we intend to enter into a
registration rights agreement with CPEX, which
owns                      shares
of our Class A common stock. Under this agreement, CPEX
will be entitled to require us to register the common stock CPEX
will receive upon conversion of the Class A2 shares it
currently holds for resale into the public market. We also
intend to enter into a registration rights agreement with
holders of our Class A2 shares for registration of up
to                      shares
of common stock received upon conversion of Class A2
shares. For more detailed information regarding these
registration rights, see "Certain Relationships and Related
Transactions — Registration Rights Agreement".
Registration of these shares under the Securities Act would
result in such shares becoming freely tradable without
restriction under the Securities Act, except for shares
purchased by "affiliates", as that term is defined in
Rule 144, immediately upon the effectiveness of such
registration.
After this offering, we intend to register
initially            shares
of our common stock, or
approximately           %
of the shares of our common stock that will be outstanding at
that time, for issuance upon the exercise of options granted
under our 2000 Stock Option Plan and 2004 Long-Term Incentive
Plan. We may increase the number of shares registered for this
purpose from time to time. Once we register these shares, they
can be sold in the public market upon issuance.
141
CERTAIN UNITED STATES TAX CONSEQUENCES
TO NON-U.S. HOLDERS OF COMMON STOCK
This section summarizes certain United States federal income and
estate tax consequences of the ownership and disposition of
common stock by a non-U.S. holder. You are a
non-U.S. holder if you are, for United States federal
income tax purposes:
•
a nonresident alien individual;
•
a foreign corporation; or
•
an estate or trust that in either case is not subject to United
    States federal income tax on a net income basis on income or
    gain from common stock.
This section does not consider the specific facts and
circumstances that may be relevant to a particular
non-U.S. holder and does not address the treatment of a
non-U.S. holder under the laws of any state, local or
foreign taxing jurisdiction. This section is based on the tax
laws of the United States, including the Internal Revenue Code
of 1986, as amended, existing and proposed regulations, and
administrative and judicial interpretations, all as currently in
effect. These laws are subject to change, possibly on a
retroactive basis.
If a partnership holds the common stock, the United States
federal income tax treatment of a partner will generally depend
on the status of the partner and the tax treatment of the
partnership. A partner in a partnership holding the common stock
should consult its tax advisor with regard to the United States
federal income tax treatment of an investment in the common
stock.
You should consult a tax advisor regarding the United States
federal tax consequences of acquiring, holding and disposing of
common stock in your particular circumstances, as well as any
tax consequences that may arise under the laws of any state,
local or foreign taxing jurisdiction.
Dividends
Except as described below, if you are a non-U.S. holder of
common stock, dividends paid to you are subject to withholding
of United States federal income tax at a 30% rate or at a lower
rate if you are eligible for the benefits of an income tax
treaty that provides for a lower rate. Even if you are eligible
for a lower treaty rate, we and other payors will generally be
required to withhold at a 30% rate (rather than the lower treaty
rate) on dividend payments to you, unless you have furnished to
us or another payor:
•
a valid Internal Revenue Service Form W-8BEN or an
    acceptable substitute form upon which you certify, under
    penalties of perjury, your status as (or, in the case of a
    United States alien holder that is a partnership or an estate or
    trust, such forms certifying the status of each partner in the
    partnership or beneficiary of the estate or trust as) a
    non-United States person and your entitlement to the lower
    treaty rate with respect to such payments; or
•
in the case of payments made outside the United States to an
    offshore account (generally, an account maintained by you at an
    office or branch of a bank or other financial institution at any
    location outside the United States), other documentary evidence
    establishing your entitlement to the lower treaty rate in
    accordance with U.S. Treasury regulations.
If you are eligible for a reduced rate of United States
withholding tax under a tax treaty, you may obtain a refund of
any amounts withheld in excess of that rate by filing a refund
claim with the United States Internal Revenue Service.
If dividends paid to you are "effectively connected"
with your conduct of a trade or business within the United
States, and, if required by a tax treaty, the dividends are
attributable to a permanent establishment that you maintain in
the United States, we and other payors generally are not
required to withhold tax from the
142
dividends, provided that you have furnished to us or another
payor a valid Internal Revenue Service Form W-8ECI or an
acceptable substitute form upon which you represent, under
penalties of perjury, that:
•
you are a non-United States person; and
•
the dividends are effectively connected with your conduct of a
    trade or business within the United States and are includible in
    your gross income.
"Effectively connected" dividends are taxed at rates
applicable to United States citizens, resident aliens and
domestic United States corporations.
If you are a corporate non-U.S. holder, "effectively
connected" dividends that you receive may, under certain
circumstances, be subject to an additional "branch profits
tax" at a 30% rate or at a lower rate if you are eligible
for the benefits of an income tax treaty that provides for a
lower rate.
Gain on Disposition of Common Stock
If you are a non-U.S. holder, you generally will not be
subject to United States federal income tax on gain that you
recognize on a disposition of common stock unless:
•
the gain is "effectively connected" with your conduct
    of a trade or business in the United States, and the gain is
    attributable to a permanent establishment that you maintain in
    the United States, if that is required by an applicable income
    tax treaty as a condition for subjecting you to United States
    taxation on a net income basis; or
•
you are an individual, you hold the common stock as a capital
    asset, you are present in the United States for 183 or more days
    in the taxable year of the sale and certain other conditions
    exist.
If you are a corporate non-U.S. holder, "effectively
connected" gains that you recognize may also, under certain
circumstances, be subject to an additional "branch profits
tax" at a 30% rate or at a lower rate if you are eligible
for the benefits of an income tax treaty that provides for a
lower rate.
Federal Estate Taxes
Common stock held by a non-U.S. holder at the time of death
will be included in the holder's gross estate for United
States federal estate tax purposes, unless an applicable estate
tax treaty provides otherwise.
Backup Withholding and Information Reporting
If you are a non-U.S. holder, you are generally exempt from
backup withholding and information reporting requirements with
respect to:
•
dividend payments; and
•
the payment of the proceeds from the sale of common stock
    effected at a United States office of a broker;
as long as the income associated with such payments is otherwise
exempt from United States federal income tax and the payor or
broker does not have actual knowledge or reason to know that you
are a United States person and you have furnished to the payor
or broker:
•
a valid Internal Revenue Service Form W-8BEN or an
    acceptable substitute form upon which you certify, under
    penalties of perjury, that you are (or, in the case of a
    non-U.S. holder that is a partnership or an estate or
    trust, such forms certifying that each partner in the
    partnership or beneficiary of the estate or trust is) a
    non-United States person; or
•
other documentation upon which it may rely to treat the payments
    as made to a non-United States person in accordance with
    U.S. Treasury regulations; or
•
you otherwise establish an exemption.
143
Payment of the proceeds from the sale of common stock effected
at a foreign office of a broker generally will not be subject to
information reporting or backup withholding. However, a sale of
common stock that is effected at a foreign office of a broker
will be subject to information reporting and backup withholding
if:
•
the proceeds are transferred to an account maintained by you in
    the United States;
•
the payment of proceeds or the confirmation of the sale is
    mailed to you at a United States address; or
•
the sale has some other specified connection with the United
    States as provided in U.S. Treasury regulations;
unless the broker does not have actual knowledge or reason to
know that you are a United States person and the documentation
requirements described above are met or you otherwise establish
an exemption.
In addition, a sale of common stock will be subject to
information reporting if it is effected at a foreign office of a
broker that is:
•
a United States person;
•
a controlled foreign corporation for United States tax purposes;
•
a foreign person 50% or more of whose gross income is
    effectively connected with the conduct of a United States trade
    or business for a specified three-year period; or
•
a foreign partnership, if at any time during its tax year:
•
one or more of its partners are "U.S. persons",
    as defined in U.S. Treasury regulations, who in the
    aggregate hold more than 50% of the income or capital interest
    in the partnership; or
•
such foreign partnership is engaged in the conduct of a United
    States trade or business,
unless the broker does not have actual knowledge or reason to
know that you are a United States person and the documentation
requirements described above are met or you otherwise establish
an exemption. Backup withholding will apply if the sale is
subject to information reporting and the broker has actual
knowledge that you are a United States person.
You generally may obtain a refund of any amounts withheld under
the backup withholding rules that exceed your income tax
liability by filing a refund claim with the Internal Revenue
Service.
144
UNDERWRITING
IntercontinentalExchange, the selling shareholders and the
underwriters for this offering named below have entered into an
underwriting agreement with respect to the shares being offered.
Subject to certain conditions, each underwriter has severally
agreed to purchase, and IntercontinentalExchange and the selling
shareholders have agreed to sell, the number of shares indicated
in the following table. Morgan Stanley & Co.
Incorporated and Goldman, Sachs & Co. are acting as
joint book-running managers of this offering and as the
representatives of the underwriters.
Number of
Underwriters
Shares
Morgan Stanley & Co. Incorporated
Goldman, Sachs & Co.
Total
The underwriters are committed to take and pay for all of the
shares being offered, if any are taken, other than the shares
covered by the option described below unless and until this
option is exercised.
If the underwriters sell more shares than the total number set
forth in the table above, the underwriters have an option to buy
up to an
additional                      shares
from the selling shareholders to cover such sales. The
underwriters may exercise this option solely for the purpose of
covering over-allotments, if any, made in connection with the
offering of the shares of common stock offered by this
prospectus. They may exercise that option for 30 days. If
any shares are purchased pursuant to this option, the
underwriters will severally purchase shares in approximately the
same proportion as set forth in the table above.
The following table shows the per share and total underwriting
discounts and commissions to be paid to the underwriters by
IntercontinentalExchange and the selling shareholders. For the
selling shareholders, such amounts are shown assuming both no
exercise and full exercise of the underwriters' option to
purchase additional shares.
Price Paid by the Selling
Shareholders
Price Paid by
IntercontinentalExchange
No Exercise
Full Exercise
Per Share
$
$
$
Total
$
$
$
Shares sold by the underwriters to the public will initially be
offered at the initial public offering price set forth on the
cover of this prospectus. Any shares sold by the underwriters to
securities dealers may be sold at a discount of up to
$          per
share from the initial public offering price. Any such
securities dealers may resell any shares purchased from the
underwriters to certain other brokers or dealers at a discount
of up to
$          per
share from the initial public offering price. If all the shares
are not sold at the initial public offering price, the
representatives may change the offering price and the other
selling terms.
IntercontinentalExchange and the holders of
approximately           %
of the shares outstanding
and           %
of the shares issuable under options outstanding as
of                     ,
2005, including IntercontinentalExchange's directors and
officers, the Initial Shareholders and the Gas and Power Firms,
have agreed with the underwriters not to dispose of, directly or
indirectly (including by means of any hedge that results in a
short sale or any swap or other arrangement that transfers any
of the economic consequences of ownership of the shares to
another party), any shares of the common stock, any option to
acquire the common stock or any securities convertible into or
exchangeable for the common stock, for a period of 180 days
following the date of this prospectus, without the prior written
consent of Morgan Stanley & Co. Incorporated and
Goldman, Sachs & Co., subject to certain exceptions,
including:
•
sales made in this offering; and
•
in the case of IntercontinentalExchange, issuances upon exercise
    of outstanding options or pursuant to existing employee plans.
145
The 180-day restricted period described in the preceding
paragraph will be automatically extended if: (1) during the
last 17 days of the 180-day restricted period,
IntercontinentalExchange issues an earnings release or announces
material news or a material event; or (2) prior to the
expiration of the 180-day restricted period,
IntercontinentalExchange announces that it will release earnings
results during the 15-day period following the last day of the
180-day period, in which case the restrictions described in the
preceding paragraph will continue to apply until the expiration
of the 18-day period beginning on the issuance of the earnings
release of the announcement of the material news or material
event.
Morgan Stanley & Co. Incorporated and Goldman,
Sachs & Co., in their discretion, may release any of
the securities subject to the lockup agreements, at any time
without notice.
At the request of IntercontinentalExchange, the underwriters
have reserved up
to            shares
of common stock offered by this prospectus for sale, at the
initial public offering price, to its directors, officers,
employees and friends through a directed share program.
IntercontinentalExchange cannot assure you that any of the
reserved shares will be purchased. The number of shares of
common stock available for sale to the general public in the
public offering will be reduced to the extent these persons
purchase these reserved shares. Any shares not so purchased will
be offered by the underwriters to the general public on the same
basis as the other shares offered hereby.
IntercontinentalExchange will apply to list the common stock on
the New York Stock Exchange under the symbol "ICE". In
order to meet one of the requirements for listing the common
stock on the New York Stock Exchange, the underwriters have
undertaken to sell round lots of 100 or more shares to a minimum
of 2,000 beneficial holders.
Prior to the offering, there has been no public market for the
shares. The initial public offering price will be negotiated
among IntercontinentalExchange and the representatives. Among
the factors to be considered in determining the initial public
offering price of the shares, in addition to prevailing market
conditions, will be IntercontinentalExchange's historical
performance, estimates of its business potential and its
earnings prospects, an assessment of its management and the
consideration of the above factors in relation to market
valuation of companies in related businesses.
In connection with the offering, the underwriters may purchase
and sell shares of common stock in the open market. These
transactions may include short sales, stabilizing transactions
and purchases to cover positions created by short sales. Shorts
sales involve the sale by the underwriters of a greater number
of shares than they are required to purchase in the offering.
"Covered" short sales are sales made in an amount not
greater than the underwriters' option to purchase
additional shares in the offering. The underwriters may close
out any covered short position by either exercising their option
to purchase additional shares or purchasing shares in the open
market. In determining the source of shares to close out the
covered short position, the underwriters will consider, among
other things, the price of shares available for purchase in the
open market as compared to the price at which they may purchase
shares through the overallotment option. "Naked" short
sales are any sales in excess of such option. The underwriters
must close out any naked short position by purchasing shares in
the open market. A naked short position is more likely to be
created if the underwriters are concerned that there may be
downward pressure on the price of the common stock in the open
market after pricing that could adversely affect investors who
purchase in the offering. Stabilizing transactions consist of
various bids for or purchases of common stock made by the
underwriters in the open market prior to the completion of this
offering.
The underwriters may also impose a penalty bid. This occurs when
a particular underwriter repays to the underwriters a portion of
the underwriting discount received by it because the
representatives have repurchased shares sold by or for the
account of such underwriter in stabilizing or short covering
transactions.
Purchases to cover a short position and stabilizing transactions
may have the effect of preventing or retarding a decline in the
market price of the company's stock, and together with the
imposition of the penalty bid, may stabilize, maintain or
otherwise affect the market price of the common stock. As a
result, the price of the common stock may be higher than the
price that otherwise might exist in the open market. If these
146
activities are commenced, they may be discontinued at any time.
These transactions may be effected on the New York Stock
Exchange, in the OTC market or otherwise.
Morgan Stanley & Co. Incorporated and Goldman,
Sachs & Co. may be deemed to be our
"affiliates", as defined, by Rule 2720 of the
Conduct Rules of the NASD ("Rule 2720").
Accordingly, this offering will be conducted in compliance with
the requirements of Rule 2720. Under the provisions of
Rule 2720, when an NASD member distributes securities of an
affiliate, the public offering price of the securities can be no
higher than that recommended by a "qualified independent
underwriter", as such term is defined in Rule 2720. In
accordance with such
requirements,           has
agreed to serve as a "qualified independent
underwriter" and has conducted due diligence and will
recommend a maximum price for the shares of common stock.
IntercontinentalExchange has agreed to
indemnify           for
acting as a "qualified independent underwriter"
against certain liabilities, including liabilities under the
Securities Act of 1933.
A prospectus in electronic format may be made available on the
websites maintained by one or more underwriters participating in
this offering. The underwriters may agree to allocate a number
of shares to underwriters for sale to their online brokerage
account holders. Internet distribution will be allocated by
Morgan Stanley & Co. Incorporated and Goldman,
Sachs & Co. to underwriters that may make Internet
distributions on the same basis as other allocations.
No sales may be made to discretionary accounts without the prior
written approval of the customer.
IntercontinentalExchange estimates that its share of the total
expenses of the offering, excluding underwriting discounts and
commissions, will be approximately
$           million.
IntercontinentalExchange and the selling shareholders have
agreed to indemnify the several underwriters against certain
liabilities, including liabilities under the Securities Act of
1933.
Two of IntercontinentalExchange's Initial Shareholders are
affiliates of Morgan Stanley & Co. Incorporated and
Goldman, Sachs & Co., the lead underwriters for this
offering. Upon the closing of this offering, each will own
approximately           %
and           %,
respectively, of our common stock. The underwriters and their
affiliates have engaged in, and may in the future engage in,
investment banking and other commercial dealings in the ordinary
course of business with IntercontinentalExchange and its
affiliates. They have received customary fees and commissions
for these transactions.
147
VALIDITY OF THE COMMON STOCK
The validity of the common stock offered hereby will be passed
upon for us by Sullivan & Cromwell LLP, New York, New
York, and for the underwriters by Cleary Gottlieb
Steen & Hamilton LLP, New York, New York.
EXPERTS
Our consolidated financial statements and schedule as of
December 31, 2004 and 2003 and for each of the three years
in the period ended December 31, 2004, all included in this
prospectus and registration statement, have been audited by
Ernst & Young LLP, independent registered public
accounting firm, as set forth in their report. We have included
our consolidated financial statements and schedule in this
prospectus and elsewhere in the registration statement in
reliance on Ernst & Young LLP's report, given on
their authority as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement on
Form S-1 under the Securities Act of 1933 that registers
the shares of our common stock to be sold in this offering. The
registration statement, including the attached exhibits and
schedules, contains additional relevant information about us and
our capital stock. The rules and regulations of the SEC allow us
to omit various information included in the registration
statement from this document. You may read and copy this
information at the public reference room of the SEC at
450 Fifth Street, N.W., Room 1024, Washington, D.C.
20549. You may also obtain copies of this information by mail
from the public reference section of the SEC, 450 Fifth
St., N.W., Room 1024, Washington, D.C. 20549, at prescribed
rates. You may obtain information on the operation of the public
reference rooms by calling the SEC at (800) SEC-0330. Our
filings with the SEC are also available to the public through
the SEC's internet site at http://www.sec.gov.
In addition, upon completion of this offering, we will become
subject to the reporting and informational requirements of the
Securities Exchange Act of 1934, as amended, and, as a result,
will file periodic reports, proxy statements and other
information with the SEC. You will be able to read and copy
these reports, proxy statements and other information at the
addresses set forth above.
148
INDEX TO FINANCIAL STATEMENTS
Page
IntercontinentalExchange, Inc.:
Report of Independent Registered Public Accounting Firm
F-2
Consolidated Balance Sheets as of December 31, 2004 and 2003
F-3
Consolidated Statements of Income for the years ended
    December 31, 2004, 2003 and 2002
F-4
Consolidated Statements of Changes in Shareholders' Equity
    for the years ended December 31, 2004, 2003 and 2002
F-5
Consolidated Statements of Comprehensive Income for the years
    ended December 31, 2004, 2003 and 2002
F-6
Consolidated Statements of Cash Flows for the years ended
    December 31, 2004, 2003 and 2002
F-7
Notes to Consolidated Financial Statements
F-8
F-1
Report of Independent Registered Public Accounting Firm
Board of Directors and Shareholders
IntercontinentalExchange, Inc.
We have audited the accompanying consolidated balance sheets of
IntercontinentalExchange, Inc. and Subsidiaries as of
December 31, 2004 and 2003, and the related consolidated
statements of income, changes in shareholders' equity,
comprehensive income, and cash flows for each of the three years
in the period ended December 31, 2004. These financial
statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are
free of material misstatement. We were not engaged to perform an
audit of the Company's internal control over financial
reporting. Our audit included consideration of internal control
over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of
the Company's internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by
management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated
financial position of IntercontinentalExchange, Inc. and
Subsidiaries at December 31, 2004 and 2003, and the
consolidated results of their operations and their cash flows
for each of the three years in the period ended
December 31, 2004, in conformity with U.S. generally
accepted accounting principles.
/s/ Ernst & Young LLP
Atlanta, Georgia
February 16, 2005
F-2
IntercontinentalExchange, Inc. and Subsidiaries
Consolidated Balance Sheets
(in thousands, except per share amounts)
December 31,
2004
2003
ASSETS
Current assets:
Cash and cash equivalents
$
61,199
$
44,913
Restricted cash
18,421
12,797
Short-term investments
5,700
12,000
Restricted short-term investments
—
24,000
Customer accounts receivable:
Trade, net of allowance for doubtful accounts of $171 and $123
    at December 31, 2004 and 2003, respectively
8,330
6,854
Related-parties
1,278
1,086
Deferred tax asset, net
426
345
Prepaid expenses and other current assets
4,688
3,898
Total current assets
100,042
105,893
Property and equipment, net
19,364
25,625
Other noncurrent assets:
Goodwill, net
82,454
76,799
Other intangible assets, net
3,621
4,649
Other noncurrent assets
2,037
1,913
Total other noncurrent assets
88,112
83,361
Total assets
$
207,518
$
214,879
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable
$
829
$
551
Accrued salaries and benefits
7,145
4,061
Accrued liabilities (including $1,307 to a related-party at
    December 31, 2004)
6,431
4,638
Income taxes payable
6,000
5,709
Current portion of revolving credit facility
12,000
—
Current portion of obligations under capital leases
482
1,648
Deferred revenue
1,553
1,310
Total current liabilities
34,440
17,917
Noncurrent liabilities:
Obligations under capital leases
—
482
Long-term portion of revolving credit facility
13,000
—
Deferred tax liability, net
9,093
9,191
Other noncurrent liabilities
1,254
1,013
Total noncurrent liabilities
23,347
10,686
Total liabilities
57,787
28,603
Commitments and contingencies
Class B redeemable common stock, $.01 par value; none
    authorized, issued or outstanding at December 31, 2004;
    11,450 shares authorized, issued and outstanding at
    December 31, 2003; $5.895 per share redemption value
—
67,500
SHAREHOLDERS' EQUITY
:
Class A, Series 1 common stock, $.01 par value;
    22,901 shares authorized; 11,450 shares issued and
    outstanding at December 31, 2004 and 2003
115
115
Class A, Series 2 common stock, $.01 par value;
    300,000 shares authorized; 206,147 and 206,138 shares
    issued at December 31, 2004 and 2003, respectively, and
    200,010 and 200,001 shares outstanding at December 31,
    2004 and 2003, respectively
2,061
2,061
Treasury stock, at cost; 6,137 Class A, Series 2
    common stock shares at December 31, 2004 and 2003
(5,541
)
(5,541
)
Additional paid-in capital
53,484
47,043
Deferred stock compensation
(6,087
)
(34
)
Retained earnings
71,172
49,223
Accumulated other comprehensive income
34,527
25,909
Total shareholders' equity
149,731
118,776
Total liabilities and shareholders' equity
$
207,518
$
214,879
See accompanying notes.
F-3
IntercontinentalExchange, Inc. and Subsidiaries
Consolidated Statements of Income
(in thousands, except per share amounts)
Year Ended December 31,
2004
2003
2002
Revenues:
Transaction fees, net (including $10,861, $11,556 and $52,785
    with related-parties in 2004, 2003 and 2002, respectively)
$
90,906
$
81,434
$
118,794
Data services fees (including $178 with related-parties in 2004)
9,691
7,742
5,141
Trading access fees
3,595
2,461
490
Other (including $1,869 and $605 with related-parties in 2004
    and 2003, respectively)
4,222
2,109
1,065
Total revenues
108,414
93,746
125,490
Operating expenses:
Cost of hosting
1,279
1,715
3,962
Compensation and benefits
30,074
26,236
27,906
Professional services
14,523
15,138
15,876
Selling, general and administrative
13,120
12,398
12,425
Depreciation and amortization
17,024
19,341
14,368
Total operating expenses
76,020
74,828
74,537
Operating income
32,394
18,918
50,953
Other income (expense):
Interest income
2,885
1,694
1,956
Interest expense
(137
)
(80
)
(400
)
Other expense, net
(1,420
)
(666
)
(64
)
Total other income, net
1,328
948
1,492
Income before income taxes
33,722
19,866
52,445
Income tax expense
11,773
6,489
17,739
Net income
$
21,949
$
13,377
$
34,706
Deduction for accretion of redeemable common stock
—
(1,768
)
(3,656
)
Net income available to common shareholders
$
21,949
$
11,609
$
31,050
Earnings per common share:
Basic and Diluted
$
0.10
$
0.05
$
0.14
Weighted average common shares outstanding:
Basic
211,460
217,316
217,570
Diluted
212,248
218,559
219,400
See accompanying notes.
F-4
IntercontinentalExchange, Inc. and Subsidiaries
Consolidated Statements of Changes in Shareholders'
Equity
(in thousands)
Accumulated Other
Comprehensive Income
Net Unrealized Gain
(Loss) from
Class A, Series 1
Class A, Series 2
Common Stock
Common Stock
Treasury Stock
Additional
Deferred
Foreign
Total
Paid-in
Stock
Retained
Currency
Hedging
Shareholders'
Shares
Value
Shares
Value
Shares
Value
Capital
Compensation
Earnings
Translation
Derivatives
Equity
Balance, December 31, 2001
11,450
$
115
206,106
$
2,061
—
$
—
$
22,943
$
—
$
6,564
$
3,087
$
—
$
34,770
Other comprehensive income
—
—
—
—
—
—
—
—
—
10,134
—
10,134
Exercise of common stock options
—
—
22
—
—
—
27
—
—
—
—
27
Net income
—
—
—
—
—
—
—
—
34,706
—
—
34,706
Accretion of Class B redeemable common stock
—
—
—
—
—
—
—
—
(3,656
)
—
—
(3,656
)
Balance, December 31, 2002
11,450
115
206,128
2,061
—
—
22,970
—
37,614
13,221
—
75,981
Other comprehensive income (loss)
—
—
—
—
—
—
—
—
—
13,129
(441
)
12,688
Exercise of common stock options
—
—
10
—
—
—
24
—
—
—
—
24
Treasury shares received for order flow shortfall
—
—
—
—
(6,705
)
(6,053
)
—
—
—
—
—
(6,053
)
Issuance of Class A, Series 2 shares
—
—
—
—
568
512
10
—
—
—
—
522
Issuance of restricted stock
—
—
—
—
—
—
39
(39
)
—
—
—
—
Amortization of deferred compensation
—
—
—
—
—
—
—
5
—
—
—
5
Consolidation of variable interest entity
—
—
—
—
—
—
24,000
—
—
—
—
24,000
Net income
—
—
—
—
—
—
—
—
13,377
—
—
13,377
Accretion of Class B redeemable common stock
—
—
—
—
—
—
—
—
(1,768
)
—
—
(1,768
)
Balance, December 31, 2003
11,450
115
206,138
2,061
(6,137
)
(5,541
)
47,043
(34
)
49,223
26,350
(441
)
118,776
Other comprehensive income (loss)
—
—
—
—
—
—
—
—
—
10,693
(2,075
)
8,618
Exercise of common stock options
—
—
9
—
—
—
14
—
—
—
—
14
Issuance of restricted stock
—
—
—
—
—
—
6,427
(6,427
)
—
—
—
—
Amortization of deferred compensation
—
—
—
—
—
—
—
374
—
—
—
374
Net income
—
—
—
—
—
—
—
—
21,949
—
—
21,949
Balance, December 31, 2004
11,450
$
115
206,147
$
2,061
(6,137
)
$
(5,541
)
$
53,484
$
(6,087
)
$
71,172
$
37,043
$
(2,516
)
$
149,731
See accompanying notes.
F-5
IntercontinentalExchange, Inc. and Subsidiaries
Consolidated Statements of Comprehensive Income
(in thousands)
Year Ended December 31,
2004
2003
2002
Net income
$
21,949
$
13,377
$
34,706
Other comprehensive income (loss):
Foreign currency translation adjustments, net of tax of $344,
    $355 and $291 for the years ended December 31, 2004, 2003
    and 2002, respectively
10,693
13,129
10,134
Change in fair value of derivatives, net of tax of ($1,250) and
    ($266) for the years ended December 31, 2004 and 2003,
    respectively
(2,075
)
(441
)
—
Comprehensive income
$
30,567
$
26,065
$
44,840
See accompanying notes.
F-6
IntercontinentalExchange, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(in thousands)
Year Ended December 31,
2004
2003
2002
Operating activities
Net income
$
21,949
$
13,377
$
34,706
Adjustments to reconcile net income to net cash provided by
    operating activities:
Depreciation and amortization
17,024
19,341
14,368
Amortization of revolving credit facility issuance costs
8
—
—
Allowance for doubtful accounts
(2
)
(330
)
508
Net realized gains on sales of available-for-sale investments
(163
)
(96
)
(165
)
Accrued interest included in principal balance of
    related-parties notes payable
—
—
264
Amortization of deferred compensation
374
5
—
Deferred taxes
(579
)
(462
)
3,059
Changes in assets and liabilities:
Customer accounts receivable:
Trade, net
(1,172
)
(3,803
)
(4,439
)
Related-parties
(192
)
1,114
4,180
Prepaid expenses and other current assets
(2,629
)
(1,999
)
(3,213
)
Noncurrent assets
103
676
307
Accounts payable
253
(802
)
(698
)
Income taxes payable
283
3,968
(2,360
)
Deferred revenue
254
681
(336
)
Accrued salaries and benefits, and other accrued liabilities
4,650
(4,577
)
4,991
Total adjustments
18,212
13,716
16,466
Net cash provided by operating activities
40,161
27,093
51,172
Investing activities
Capital expenditures
(1,703
)
(1,606
)
(14,770
)
Capitalized software development costs
(4,841
)
(5,176
)
(6,021
)
Purchase of trademarks and internet domain names
—
(665
)
—
Cash payments for order flow agreements
—
—
(725
)
Proceeds from sales of available-for-sale investments
30,463
11,096
49,165
Purchases of available-for-sale investments
(24,000
)
(19,000
)
(53,000
)
(Increase) decrease in restricted cash
(4,696
)
(2,780
)
142
Net cash used in investing activities
(4,777
)
(18,131
)
(25,209
)
Financing activities
Proceeds from issuance of treasury shares
—
522
—
Repayments of related-party notes payable
—
—
(16,465
)
Payments on capital lease obligations
(1,648
)
(1,870
)
(3,613
)
Proceeds from revolving credit facility
25,000
—
—
Issuance costs for revolving credit facility
(190
)
—
—
Redemption of Class B redeemable common stock
(43,500
)
—
—
Proceeds from exercise of common stock options
14
24
27
Net cash used in financing activities
(20,324
)
(1,324
)
(20,051
)
Effect of exchange rate changes on cash and cash equivalents
1,226
3,648
2,105
Net increase in cash and cash equivalents
16,286
11,286
8,017
Cash and cash equivalents, beginning of year
44,913
33,627
25,610
Cash and cash equivalents, end of year
$
61,199
$
44,913
$
33,627
Supplemental cash flow disclosure
Cash paid for income taxes
$
11,506
$
6,291
$
16,295
Cash paid for interest
$
89
$
80
$
137
Supplemental noncash investing and financing activities
Restricted cash used for redemption of Class B redeemable
    common stock
$
(24,000
)
$
—
$
—
Proceeds from sales of available-for-sale restricted investments
$
48,231
$
20
$
—
Purchases of available-for-sale restricted investments
$
(24,000
)
$
(24,000
)
$
—
Issuance of restricted stock
$
6,427
$
39
$
—
Consolidation of variable interest entity
$
—
$
24,000
$
—
Treasury shares received for order flow shortfall
$
—
$
6,053
$
—
Capital lease obligations issued for purchase of equipment
$
—
$
1,344
$
6,020
Accretion of Class B redeemable common stock
$
—
$
1,768
$
3,656
See accompanying notes.
F-7
IntercontinentalExchange, Inc.
and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2004
1.
Nature of Business and Organization
IntercontinentalExchange, Inc. (the "Company") (a
Delaware corporation) owns and operates an Internet-based,
global electronic marketplace for facilitating trading in
futures and over-the-counter ("OTC") commodities and
derivative financial products (the "Platform"). The
Company owns 100% of IPE Holding Plc, which is the sole
shareholder of the International Petroleum Exchange of London
Limited (the "IPE"). The IPE operates as a United
Kingdom ("U.K.") Recognized Investment Exchange
("RIE") in London, England, for the purpose of trading
energy commodity futures and options contracts both
electronically through the Platform and through floor-based
open-outcry trading in London. Headquartered in Atlanta,
Georgia, the Company also has offices in London, New York,
Chicago, Houston, Singapore and recently opened a new office in
Calgary in January 2005.
The Company currently operates the Platform as an exempt
commercial market ("ECM") pursuant to the Commodity
Exchange Act and regulations of the Commodity Futures Trading
Commission ("CFTC"). As an ECM, the Company is
required to file a notice with the CFTC, provide the CFTC with
access to its trading system and respond to requests for
information or records from the CFTC.
The IPE is subject to regulation in the U.K. by the Financial
Services Authority ("FSA") in accordance with the
Financial Services and Markets Act 2000. The IPE is responsible
for maintaining financial resources sufficient for the proper
performance of its functions as an RIE, and, in order to satisfy
this requirement, is obligated to maintain a minimum amount of
liquid financial assets at all times.
The Company also owns 100% of IntercontinentalExchange Services,
Inc. ("ICE Services US"), The 10x Group, L.P. and The
10x Group (UK) L.L.P (collectively, "10x"),
IntercontinentalExchange Services (UK) Ltd. ("ICE Services
UK") and IntercontinentalExchange Technologies Ltd.
("ICE Tech"). ICE Services US is based in New York and
performs global marketing and business development services for
the Company, including, but not limited to, targeted promotions
and client development. 10x is a market data services company
based in Houston and London that offers subscriptions to OTC end
of day reports, market price validation ("MPV")
curves, customized data packages, real-time IPE price
information through terminal and license fees and real-time view
only screen access to the Platform through WebICE. The IPE began
selling its market data services through 10x in November 2004.
WebICE is a web-based desktop service whose subscribers can view
every bid, offer and trade as well as depth of market across all
of the North American power and gas commodity markets traded on
the Platform. ICE Services UK, which is based in London,
supports trading of European energy commodities, performs
helpdesk functions and received authorization by the FSA in
January 2003 to act as an arranger of deals in investments. ICE
Tech operates the fully functional disaster recovery facility
for the Platform.
2.     Summary of Significant
Accounting Policies
Basis of Presentation
The accompanying consolidated financial statements are presented
in accordance with U.S. generally accepted accounting
principles. The consolidated financial statements include the
accounts of the Company and its wholly-owned subsidiaries. All
intercompany balances and transactions between the Company and
its wholly-owned subsidiaries have been eliminated in
consolidation.
Use of Estimates
The preparation of financial statements in conformity with
U.S. generally accepted accounting principles requires the
Company's management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of
the financial statements.
F-8
IntercontinentalExchange, Inc.
and Subsidiaries
Notes to Consolidated Financial
Statements — (Continued)
Estimates also affect the reported amounts of expenses during
the reporting period. Actual amounts could differ from those
estimates.
Segment and Geographic Information
The Company currently has two reportable operating segments: its
OTC business segment and its futures business segment. Both
segments operate across domestic and international markets.
Substantially all of the Company's identifiable assets are
in the U.S. and the U.K.
Cash and Cash Equivalents
The Company considers all short-term, highly liquid investments
with original maturity dates of three months or less at the time
of purchase to be cash equivalents.
Short-Term Investments
The Company invests a portion of its cash in excess of
short-term operating needs and a portion of its restricted cash
in U.S. AAA rated 28-day Auction Rate Securities
("ARS"). The Company classifies these investments as
available-for-sale in accordance with Statement of Financial
Accounting Standards ("SFAS") No. 115,
Accounting for Certain Investments in Debt and Equity
Securities
. ARS are long-term instruments whose interest
rates or dividends are reset frequently, usually every seven to
49 days. The reset mechanism occurs via a Dutch auction,
wherein purchasers and sellers submit their orders for ARS to
registered broker-dealers. The highest bid that clears the
auction is the interest rate or dividend applied to the entire
issue until the next auction date. While there is no guarantee
that a sell order will be filled, it is rare for it not to be
filled due to the high credit quality of the ARS. Even though
the Company only purchases 28-day auction rate issues, the
Company is required to classify these securities as short-term
investments instead of cash equivalents in the accompanying
consolidated balance sheets as the original maturity of the ARS
is in excess of 90 days. As of December 31, 2004, the
contractural maturities of these securities are in excess of ten
years. The ARS investments are classified as current assets
based upon the Company's intent and ability to use these
investments as necessary for short-term requirements.
Available-for-sale investments are carried at their fair value.
Based on the short-term nature of these 28-day auction rate
issues and their market rates, the estimated fair value of the
ARS approximates carrying value. Therefore, the net unrealized
gains or losses are immaterial. Proceeds from sales of
available-for-sale investments, including the restricted
short-term investments, were $78.7 million,
$11.1 million and $49.2 million during the years ended
December 31, 2004, 2003 and 2002, respectively. Purchases
of available-for-sale investments, including the restricted
short-term investments, were $48.0 million,
$43.0 million and $53.0 million during the years ended
December 31, 2004, 2003 and 2002, respectively. Gross
realized gains on the short-term investments, including the
restricted short-term investments, were $394,000, $116,000 and
$165,000 during the years ended December 31, 2004, 2003 and
2002, respectively, and have been classified as interest income
in the accompanying consolidated statements of income.
Restricted Cash and Restricted Short-Term Investments
The Company classifies all cash and short-term investments that
are not available for general use by the Company, either due to
FSA requirements or through restrictions in specific agreements,
as restricted in the accompanying consolidated balance sheets
(Note 3).
F-9
IntercontinentalExchange, Inc.
and Subsidiaries
Notes to Consolidated Financial
Statements — (Continued)
Property and Equipment
Property and equipment are recorded at cost, reduced by
accumulated depreciation (Note 4). Depreciation and
amortization expense is computed using the straight-line method
based on estimated useful lives of the assets, or in the case of
leasehold improvements, the shorter of the initial lease term or
the estimated useful life of the asset. The Company reviews the
remaining estimated useful lives of its property and equipment
at each balance sheet date and will make adjustments to the
estimated remaining useful lives whenever events or changes in
circumstances indicate that the remaining useful lives have
changed. Gains on disposals of property and equipment are
included in other income and losses on disposals of property and
equipment are included in depreciation expense. Maintenance and
repairs are expensed as incurred.
Software Development Costs
The Company capitalizes costs, both internal and external direct
and incremental costs, related to software developed or obtained
for internal use in accordance with AICPA Statement of
Position 98-1,
Accounting for Costs of Computer Software
Developed or Obtained for Internal Use
. Software development
costs incurred during the preliminary or maintenance project
stage are expensed as incurred, while costs incurred during the
application development stage are capitalized and are amortized
using the straight-line method over the useful life of the
software, not to exceed three years. Amortization of these
capitalized costs begins only when the software becomes ready
for its intended use. General and administrative costs related
to developing or obtaining such software are expensed as
incurred.
Interest Costs
The Company's policy is to capitalize qualified interest
costs incurred on internally developed software projects that
are in the application development stage and that extend beyond
six months. For the years ended December 31, 2004, 2003 and
2002, the Company incurred interest costs of $137,000, $80,000
and $400,000, respectively. No interest was capitalized during
the years ended December 31, 2004, 2003 and 2002 as no
internally developed software projects extended beyond six
months.
Goodwill and Other Intangible Assets
The Company has recorded goodwill for the excess of the purchase
price for its acquisition of the IPE during June 2001 over the
fair value of identifiable net assets acquired, including other
identified intangible assets (Note 5). The Company
recognizes specifically identifiable intangibles when a specific
right or contract is acquired. Finite-lived intangible assets
are amortized on a straight-line basis over the lesser of their
contractual or estimated useful lives. The Company's
goodwill and other intangible assets are evaluated for
impairment annually in its fiscal fourth quarter or sooner if
events indicate that value may be diminished. Such evaluation
includes comparing the fair value of a reporting unit with its
carrying value and analyzing expected future discounted cash
flows at the reporting unit level. The reporting unit level for
the Company's goodwill and the majority of its other
intangible assets is the futures business segment, which relates
to the operations of the IPE. This analysis did not result in an
impairment charge during the years ended December 31, 2004,
2003 or 2002.
Intellectual Property
All costs related to internally developed patents and trademarks
are expensed as incurred. All costs related to purchased
patents, trademarks and internet domain names are recorded as
other intangible assets and are amortized on a straight-line
basis over their estimated useful lives. All costs related to
licensed patents are capitalized and amortized on a
straight-line basis over the term of the license.
F-10
IntercontinentalExchange, Inc.
and Subsidiaries
Notes to Consolidated Financial
Statements — (Continued)
Long-Lived Assets
The Company reviews its long-lived assets, such as property and
equipment, goodwill, and other intangible assets, for impairment
at each balance sheet date and whenever events or changes in
circumstances indicate that the carrying amount may not be fully
recoverable. To analyze recoverability, the Company projects
undiscounted net future cash flows over the remaining life of
such assets. If these projected cash flows are less than the
carrying amount, an impairment would be recognized, resulting in
a write-down of assets with a corresponding charge to earnings.
The impairment loss is measured based upon the difference
between the carrying amount and the fair value of the assets.
An impairment would also be recorded when events or changes in
circumstances may indicate that the carrying amount of an asset
may not be recoverable. Management believes its long-lived
assets in the accompanying consolidated balance sheets are
appropriately valued.
Income Taxes
The Company and its U.S. subsidiaries file a consolidated
U.S. federal income tax return. State income tax returns
are filed on a separate, combined or consolidated basis in
accordance with relevant state laws and regulations. The
Company's foreign subsidiaries are based in the U.K. and
they file separate local country income tax returns and take
advantage of the U.K.'s group relief provisions when
applicable. The Company utilizes the liability method of
accounting for income taxes. Under the liability method,
deferred taxes are determined based on the difference between
the financial and tax bases of assets and liabilities using
enacted tax rates in effect in the years in which the
differences are expected to reverse. Deferred tax expenses and
benefits are recognized for changes in deferred tax assets and
liabilities.
The difference between our actual income tax rate and our
effective tax rate for a given period is primarily a reflection
of the tax effects of our foreign operations, general business
and tax credits, state income taxes and the non-deductibility of
certain expenses. We have provided for U.S. income taxes on
all undistributed earnings of our foreign subsidiaries as they
are not expected to be permanently reinvested.
Revenue Recognition
The Company's revenues primarily consist of commission and
exchange fee revenues for OTC transactions executed over the
Platform and for futures transactions executed through the IPE
and are recognized on the date the transactions occur. The
Company calculates the commission fee revenues based on the
volume of each commodity traded on the Platform multiplied by
the commission rate for each commodity type. The IPE exchange
fee revenues are determined on the basis of an exchange fee
charged for each "lot" or contract traded on the
exchange. Exchange fees are calculated by LCH.Clearnet Limited
(formerly the London Clearing House or "LCH") on the
IPE's behalf and are transferred to the IPE on a monthly
basis. The LCH, which is a leading clearinghouse based in
London, also calculates and collects fees for cleared OTC
contracts traded on the Platform.
Transaction fees are recorded net of rebates of
$3.3 million, $981,000 and $887,000 for the years ended
December 31, 2004, 2003 and 2002, respectively. The Company
rebates a portion of the exchange fees paid by IPE independent
local traders for lots bought and sold on the same day for the
same price. The Company also rebates a portion of the commission
fees paid by certain market makers in the OTC business. The 2004
rebates include $2.3 million for a two month rebate program
in November and December 2004 designed to promote electronic
futures trading in the Brent Crude futures market on the
Platform.
Data services revenues include terminal and license fees
received from data vendors in exchange for the provision of
real-time IPE price information. Data services fees are charged
to data vendors on a monthly basis based on the number and type
of terminals they have carrying IPE data. Each data vendor also
pays an annual
F-11
IntercontinentalExchange, Inc.
and Subsidiaries
Notes to Consolidated Financial
Statements — (Continued)
license fee to the IPE, which is deferred and recognized as
revenue ratably over the period of the annual license. Data
services revenues include view-only access charges to
subscribers to view real-time OTC price information on the
Platform through 10x. 10x also publishes end of day trading and
price reports and provides MPV services. The MPV service
provides validation of long-dated and illiquid swaps and options
valuations based on inputs from counterparties in the
marketplace submitting their trader valuations for open
positions. 10x invoices its subscribers either on a monthly or
annual basis. For those 10x subscribers billed on an annual
basis, the revenues are deferred and amortized ratably over the
period of the annual subscriptions.
Trading access revenues include monthly minimum commission
shortfall fees charged to customers that are signed up to trade
on the OTC Platform. The monthly minimum commission amount for
each company is based on the number of users at each company
signed up to trade on the Platform. The difference between the
monthly minimum commission total for each company and the actual
amount of commissions paid that month for trading activity is
recognized as monthly minimum commission shortfall trading
access revenues. The actual amount of commissions paid that
month for trading activity is recognized as transaction fee
revenues. Trading access revenues also relate to annual member
subscription and system user fees charged to IPE customers,
which are deferred and amortized ratably over the periods to
which they relate.
Other revenues primarily relate to revenue generated from IPE
equipment rentals, IPE communications charges and IPE training
seminars, and are recognized as services are provided. The IPE
equipment rentals are charged in advance and are amortized
ratably over the period to which they relate. Other revenues
also include licensing and service fees charged to the Chicago
Climate Exchange, Inc. ("CCX"). CCX is a
self-regulated exchange that administers a voluntary
multi-sector greenhouse gas reduction and trading program for
North America. The Company has been contracted to provide,
design and service CCX's electronic trading platform. The
license and service fees are billed in advance to CCX on a
monthly basis and are recognized as services are provided. We
recognize technology development fees as revenues when the
development work is completed and accepted by CCX.
Sources of Supplies
The Company uses ten primary vendors for equipment used in the
Platform and its network. If these vendors were unable to meet
the Company's needs, management believes that the Company
could obtain this equipment from other vendors on comparable
terms and that its operating results would not be materially
adversely affected.
Credit Risk and Significant Customers
The Company's accounts receivable related to its OTC
business segment subjects the Company to credit risk, as the
Company does not require its customers to post collateral for
bilateral trades. The Company does not risk its own capital in
transactions or extend credit to market participants in any
commodities markets. The Company limits its risk of loss by
allowing trading access to the Platform to companies that
qualify as eligible commercial entities, as defined in the
Commodity Exchange Act, and by terminating access to the
Platform by entities with delinquent accounts.
Beginning in January 2003, the Company received approval from
the CFTC permitting registered traders and locals with floor or
electronic trading privileges on any regulated U.S. futures
exchange to qualify as eligible commercial entities and,
therefore, to execute OTC transactions on the Platform. The
Company also received approval in October 2004 from the CFTC
permitting IPE's registered brokers and local traders to
transact in the OTC markets for their own accounts. This has
allowed IPE members and traders access to both the futures
markets and the OTC markets on one screen via the Platform. The
launch and growth of cleared OTC products also limits the
Company's risk of loss in its OTC business as the LCH
collects cleared transaction fees on the date the transactions
occur and transfers these fees to the Company on a monthly basis.
F-12
IntercontinentalExchange, Inc.
and Subsidiaries
Notes to Consolidated Financial
Statements — (Continued)
The LCH serves as the central counterparty to all trades
executed by its members. During the year ended December 31,
2004, 54% of the OTC business segment commission fee revenues
were from cleared trades.
The Company's large customer base also mitigates the
concentration of credit risk as the Company had over
660 companies registered to trade on the Platform as of
December 31, 2004 and another 200 companies with
view-only access rights through 10x. There were no accounts
receivable balances greater than 10% of total consolidated
accounts receivable as of December 31, 2004 or
December 31, 2003.
Revenues from one customer, which was a related-party for a
portion of the year ended December 31, 2002, comprised 10%
of total consolidated revenues for the year ended
December 31, 2002. No other customer accounted for more
than 10% of total consolidated revenues during any of the years
presented in the accompanying consolidated statements of income,
including the years ended December 31, 2004 and 2003. See
Note 11 where related-parties are discussed in more detail.
Stock-Based Compensation
The Company currently sponsors an employee stock option plan,
described more fully in Note 9. The Company accounts for
the stock-based compensation plan under the intrinsic value
method in accordance with Accounting Principles Board
("APB") Opinion No. 25,
Accounting for Stock
Issued to Employees
, and related Interpretations. Therefore,
the Company recognizes no compensation expense for the stock
option grants as long as the exercise price is equal to or more
than the fair value of the shares at the date of grant. The
Company has adopted the disclosure-only provisions under
SFAS No. 123,
Accounting for Stock-Based
Compensation,
as amended by SFAS No. 148,
Accounting for Stock-Based Compensation —
Transaction and Disclosure
. Please refer to the New
Accounting Pronouncements section of Note 2 for information
regarding the Company's plans regarding the implementation
of SFAS No. 123 (revised 2004),
Share-Based
Payment
. Had the Company elected to adopt the fair value
recognition provisions of SFAS No. 123, pro forma net
income available to common shareholders and earnings per common
share for the years ended December 31, 2004, 2003 and 2002
would be as follows:
Year Ended December 31,
2004
2003
2002
(in thousands, except per share amounts)
Net income available to common shareholders, as reported
$
21,949
$
11,609
$
31,050
Add: Stock-based compensation expense included in reported net
    income, net of tax
243
4
—
Deduct: Total stock-based compensation expense determined under
    the fair value method for all awards, net of tax
(737
)
(3,494
)
(2,638
)
Net income available to common shareholders, pro forma
$
21,455
$
8,119
$
28,412
Earnings per common share:
Basic and Diluted — as reported
$
0.10
$
0.05
$
0.14
Basic and Diluted — pro forma
$
0.10
$
0.04
$
0.13
The reduction in pro forma stock-based compensation expense for
the year ended December 31, 2004 is primarily due to the
large number of stock option forfeitures that occurred during
the year ended December 31, 2004. Pursuant to
SFAS No. 123, the Company reduced the compensation
cost for actual forfeited options during the year ended
December 31, 2004, which included 4,475,733 stock options
and $4.4 million of compensation cost recognized on a pro
forma basis in prior periods for the forfeited stock options.
F-13
IntercontinentalExchange, Inc.
and Subsidiaries
Notes to Consolidated Financial
Statements — (Continued)
Earnings Per Common Share
Basic earnings per common share is calculated using the weighted
average common shares outstanding during the year. Common
equivalent shares from stock options, restricted stock awards
and warrants, using the treasury stock method, are also included
in the diluted per share calculations unless their effect of
inclusion would be antidilutive (Note 16).
Treasury Stock
The Company records treasury stock activities under the cost
method whereby the entire cost of the acquired stock is recorded
as treasury stock (Note 9).
Fair Value of Financial Instruments
SFAS No. 107,
Disclosure about the Fair Value of
Financial Instruments
, requires the disclosure of the fair
value of financial instruments, including assets and liabilities
recognized in the consolidated balance sheets. The
Company's financial instruments include cash and cash
equivalents, short-term investments, restricted cash, accounts
receivable, short-term and long-term debt and other short-term
assets and liabilities. Based on the short-term nature of these
financial instruments or their market rates, the estimated fair
values of the Company's financial instruments approximate
their carrying values as of December 31, 2004 and 2003.
Foreign Currency Transaction Adjustments and Transactions
The functional currency of the Company's foreign
subsidiaries is the U.K. pounds sterling. The Company translates
these assets and liabilities into U.S. dollars using
period-end exchange rates and revenues and expenses are
translated using the average exchange rates for the reporting
period. Translation adjustments are recorded in accumulated
other comprehensive income, a separate component of
shareholders' equity in the accompanying consolidated
balance sheets and in the consolidated statements of
comprehensive income. Gains and losses from foreign currency
transactions, such as those resulting from the settlement of
foreign receivables or payables or the Company's foreign
subsidiaries cash accounts held in U.S. dollars, are
included in other income (expense) in the accompanying
consolidated statements of income and resulted in net losses of
$1.4 million, $644,000 and $149,000 for the years ended
December 31, 2004, 2003 and 2002, respectively.
Hedging
During the years ended December 31, 2004 and 2003, the
Company entered into foreign currency hedging activities
primarily to protect the net investment in its foreign
subsidiaries (Note 13). In accordance with
SFAS No. 133,
Accounting for Derivative Instruments
and Hedging Activities
, the Company is required to recognize
all derivative financial instruments as either assets or
liabilities in the accompanying consolidated balance sheets at
fair value. The effective portion of any gain or loss on these
derivative financial instruments, which have been designated as
a hedge of a net investment in foreign operations, are reflected
in accumulated other comprehensive income. Any ineffective
portion of any gain or loss on these derivative financial
instruments are immediately recognized in earnings. The
Company's foreign exchange forward contracts entered into
during the years ended December 31, 2004 and 2003 met the
requirements for hedge accounting, including correlation, and
qualified as effective hedges. Therefore, all gains or losses on
these foreign exchange forward contracts have been reflected in
other comprehensive income in the accompanying consolidated
statements of comprehensive income and balance sheets.
F-14
IntercontinentalExchange, Inc.
and Subsidiaries
Notes to Consolidated Financial
Statements — (Continued)
Marketing and Promotional Fees
Advertising costs, including print advertising and production
costs, product promotion campaigns and seminar, conference and
convention costs related to trade shows and other industry
events, are expensed as incurred. The Company incurred
advertising costs of $849,000, $1.2 million and
$1.4 million during the years ended December 31, 2004,
2003 and 2002, respectively.
New Accounting Pronouncements
On December 16, 2004, the Financial Accounting Standards
Board ("FASB") issued SFAS No. 123 (revised
2004),
Share-Based Payment
, which is a revision of
SFAS No. 123. SFAS No. 123(R) supersedes APB
Opinion No. 25 and amends SFAS No. 95,
Statement of Cash Flows
. Generally, the approach in
SFAS No. 123(R) is similar to the approach described
in SFAS No. 123. However, SFAS No. 123(R)
requires all share-based payments to employees, including grants
of employee stock options, to be recognized in the income
statement based on their fair value. Pro forma disclosure is no
longer an alternative.
For public companies that do not file as small business issuers,
SFAS No. 123(R) must be adopted no later than
July 1, 2005. For nonpublic entities,
SFAS No. 123(R) is effective as of the beginning of
the first annual reporting period that begins after
December 15, 2005. Early adoption will be permitted in
periods in which financial statements have not been issued. The
Company expects to adopt SFAS No. 123(R) on
July 1, 2005.
SFAS No. 123(R) permits companies to adopt its
requirements using one of two methods:
1. A "modified prospective" method in which
    compensation cost is recognized beginning with the effective
    date (a) based on the requirements of
    SFAS No. 123(R) for all share-based payments granted
    after the effective date and (b) based on the requirements
    of SFAS No. 123 for all awards granted to employees
    prior to the effective date of SFAS No. 123(R) that
    remain unvested on the effective date.
2. A "modified retrospective" method which
    includes the requirements of the modified prospective method
    described above, but also permits entities to restate based on
    the amounts previously recognized under SFAS No. 123
    for purposes of pro forma disclosures either (a) all prior
    periods presented or (b) prior interim periods of the year
    of adoption.
The Company plans to adopt SFAS No. 123(R) using the
modified prospective method.
As permitted by SFAS No. 123, the Company currently
accounts for share-based payments to employees using APB Opinion
No. 25's intrinsic value method and, as such,
generally recognizes no compensation cost for employee stock
options. Accordingly, the adoption of
SFAS No. 123(R)'s fair value method will have a
significant impact on our result of operations, although it will
have no impact on our overall financial position. The impact of
adoption of SFAS No. 123(R) cannot be predicted at
this time because it will depend on levels of share-based
payments granted in the future. However, had the Company adopted
SFAS No. 123(R) in prior periods, the impact of the
standard would have approximated the impact of
SFAS No. 123 as described in the disclosure of pro
forma net income and earnings per share in Notes 2 and 9.
It should be noted that there are certain differences between
the requirements of SFAS No. 123 and
SFAS No. 123(R) that may result in a material
difference in the impact of the fair value calculations on the
Company's net income and earnings per share. This includes
the requirement under SFAS No. 123(R) to estimate
forfeitures, the requirement that an excess tax benefit reduces
taxes payable before it is realized, potential changes to the
capitalization of compensation cost and the Company's use
of industry volatility figures in prior periods.
SFAS No. 123(R) also requires the benefits of tax
deductions in excess of recognized compensation cost to be
reported as a financing cash flow, rather than as an operating
cash flow as required under current literature. This requirement
will reduce net operating cash flows and increase net financing
cash flows in
F-15
IntercontinentalExchange, Inc.
and Subsidiaries
Notes to Consolidated Financial
Statements — (Continued)
periods after adoption. The Company cannot estimate what those
amounts may be in the future because they depend on, among other
things, when employees exercise stock options. The Company did
not recognize any tax deductions in excess of the recognized
compensation cost for the years ended December 31, 2004,
2003 and 2002.
In December 2004, FASB Staff Position No. SFAS 109-2,
Accounting and Disclosure Guidance for the Foreign Earnings
Repatriation Provision within the American Jobs Creation Act of
2004
("FSP SFAS 109-2") was issued. FSP
SFAS 109-2 provides guidance under SFAS 109,
Accounting for Income Taxes
("SFAS No. 109"), for recording the
potential impact of the repatriation provisions of the American
Jobs Creation Act of 2004 (the "Jobs Act"), enacted on
October 22, 2004. FSP SFAS 109-2 allows time beyond
the financial reporting period of enactment to evaluate the
effects of the Jobs Act before applying the requirements of FSP
SFAS 109-2. Accordingly, the Company is evaluating the
potential effects of the Jobs Act and has not adjusted the tax
expense or deferred tax liability as of December 31, 2004
to reflect the requirements of FSP SFAS 109-2
(Note 10).
Reclassifications
Certain prior year amounts have been reclassified to conform to
the current year's financial statement presentation.
3.
Restricted Cash and Short-Term Investments
As an RIE, the FSA requires the IPE to restrict the use of the
equivalent of six months of operating expenditures in cash or
cash equivalents at all times. As of December 31, 2004 and
2003, this amount was equal to $12.4 million and
$11.9 million, respectively, and is reflected as restricted
cash in the accompanying consolidated balance sheets.
ICE Services UK is regulated by the FSA as an agency broker. The
FSA requires ICE Services UK to maintain a minimum level of
financial resources, which is calculated annually on the basis
of
1
/
4
of the relevant annual expenditures, adjusted for any illiquid
assets. As of December 31, 2004 and 2003, the resource
requirement was equal to $1.0 million and $874,000,
respectively, and is reflected as restricted cash in the
accompanying consolidated balance sheets.
In November 2004, the Company entered into a $25.0 million
revolving credit agreement with Wachovia Bank, National
Association ("Wachovia") (Note 7). The Company is
required to maintain a $5.0 million money market account
with Wachovia until it has transferred the primary domestic and
international deposit accounts to the lender, which will likely
occur during 2005. As of December 31, 2004, this
$5.0 million balance is reflected as restricted cash in the
accompanying consolidated balance sheets.
In January 2003, the FASB issued Interpretation No. 46
("FIN 46"),
Consolidation of Variable Interest
Entities
. FIN 46 requires a variable interest entity to
be consolidated by a company if that company is subject to a
majority of the risk of loss from the variable interest
entity's activities or entitled to receive a majority of
the entity's residual returns or both. Previously, entities
were generally consolidated by a company that has a controlling
financial interest through ownership of a majority voting
interest in the entity. The Company was required to adopt
FIN 46 in the first quarter of 2004, but chose to adopt it
early during November 2003.
The Company had an interest in a special purpose or variable
interest entity that it previously was not required to
consolidate based on preexisting authoritative accounting
guidance. However, given that the Company had the ability to
receive all of the variable interest entity's expected
residual losses and returns, the Company was considered the
primary beneficiary under FIN 46 and was required to
consolidate the entity. The result of the adoption of
FIN 46 and the consolidation of the variable interest
entity in November 2003 was an increase to restricted
short-term investments and a corresponding increase to
additional paid-in capital
F-16
IntercontinentalExchange, Inc.
and Subsidiaries
Notes to Consolidated Financial
Statements — (Continued)
for $24.0 million. The $24.0 million held by the
special purpose entity was pledged to a bank as a guarantee to
secure a letter-of-credit facility for the Company's
Class B redeemable common stock and was invested in ARS
investments. Therefore, these amounts were classified as
restricted short-term investments in the accompanying
consolidated balance sheets as of December 31, 2003. The
Class B redeemable common stock was redeemed in November
2004 and the entire $24.0 million in restricted short-term
investments was used for a portion of the redemption
(Note 8).
4.
Property and Equipment
Property and equipment consisted of the following as of
December 31, 2004 and 2003:
December 31,
Depreciation
2004
2003
Period
(in years)
(in thousands)
Land
$
3,832
$
3,569
–
Computer and network equipment
22,964
21,161
3 to 4
Software and internally developed software
37,058
31,643
3
Office furniture and equipment
2,263
1,964
5
Leasehold improvements
2,010
1,858
7
68,127
60,195
Less accumulated depreciation and amortization
(48,763
)
(34,570
)
Property and equipment, net
$
19,364
$
25,625
For the years ended December 31, 2004, 2003 and 2002,
amortization of software and internally developed software was
$8.3 million, $9.1 million and $6.0 million,
respectively, and depreciation of all other property and
equipment was $5.2 million, $7.3 million and
$6.0 million, respectively.
In January 2004, the Company extended the remaining estimated
useful lives of various computer and network equipment from
March 2005 to December 2005. The Company's decision to
extend the useful lives of these assets was based on an internal
analysis that indicated the estimated useful lives would extend
beyond the original estimate of three years. This had the impact
of deferring $676,000 of depreciation expense, $440,000 on an
after tax basis, that would have otherwise been recorded during
the year ended December 31, 2004. The change in estimate
had no impact on earnings per share as reported during the year
ended December 31, 2004. We will continue to review the
remaining estimated useful lives of our property and equipment
and will make adjustments whenever events or changes in
circumstances indicate that the remaining useful lives have
changed.
F-17
IntercontinentalExchange, Inc.
and Subsidiaries
Notes to Consolidated Financial
Statements — (Continued)
5.
Goodwill and Other Intangible Assets
Goodwill and other intangible assets and the related accumulated
amortization consisted of the following as of December 31,
2004 and 2003:
December 31,
2004
2003
(in thousands)
Goodwill from the IPE acquisition
$
84,713
$
78,903
IPE Customer relationships
5,978
5,568
RIE license
1,473
1,373
Trademark and internet domain names
665
665
92,829
86,509
Less accumulated amortization
(6,754
)
(5,061
)
Goodwill and other intangible assets, net
$
86,075
$
81,448
The IPE has contractual customer relationships with its members
and quote vendors. A member is defined as a company and/or an
individual who has rights to execute and/or clear exchange
trades directly through the IPE's exchange. A quote or data
vendor is defined as a data reseller who distributes IPE
real-time price information to its customers. These customer
relationships have been classified as intangible assets and are
being amortized over their estimated useful lives of five years.
As of December 31, 2004 and 2003, the net carrying value of
these customer relationships totaled $1.8 million and
$2.7 million, respectively.
As discussed in Note 1, the IPE is a RIE that is regulated
by the FSA in accordance with the Financial Services and Markets
Act 2000. The RIE status allows the IPE to carry out its
business as a futures and options exchange. The process of
obtaining recognition as an Investment Exchange in the U.K.
involves applicants incurring significant time and legal
expense, which the Company avoided by its acquisition of the
IPE. The IPE's RIE status has therefore been classified as
an intangible asset due to its operating agreement/license with
the FSA. In accordance with the adoption of
SFAS No. 142 on January 1, 2002 as discussed in
Note 2, the Company did not recognize any amortization
expense on the RIE license intangible asset during the years
ended December 31, 2004, 2003 and 2002 as it has an
indefinite useful life. As of December 31, 2004 and 2003,
the carrying value of the RIE license totaled $1.4 million
and $1.3 million, respectively.
During 2003, the Company purchased trademarks and internet
domain names from various third parties for $665,000. These
trademarks and internet domain names have been classified as
intangible assets and are being amortized over their estimated
useful lives of five years. As of December 31, 2004 and
2003, the carrying value of these trademarks and internet domain
names totaled $433,000 and $566,000, respectively.
In accordance SFAS No. 142, the Company did not
recognize any amortization expense on goodwill during the years
ended December 31, 2004, 2003 and 2002. As of
December 31, 2004 and 2003, the Company's goodwill
balance totaled $82.5 million and $76.8 million,
respectively. The increase in goodwill and other intangible
assets primarily resulted from translation adjustments.
F-18
IntercontinentalExchange, Inc.
and Subsidiaries
Notes to Consolidated Financial
Statements — (Continued)
For the years ended December 31, 2004, 2003 and 2002,
amortization of other intangible assets was $1.5 million,
$1.0 million and $876,000, respectively. The Company
expects future amortization expense from other intangible assets
as of December 31, 2004 to be as follows (in thousands):
2005
$
1,329
2006
691
2007
133
2008
34
$
2,187
6.
Deferred Revenue
Deferred revenue relates to the unamortized annual billings for
IPE member subscription and user fees, IPE equipment rentals and
IPE and 10x market data services, reports and subscriptions
which are recognized as revenue as services are provided.
Deferred revenue also includes the CCX license and service fees
that are billed monthly in advance and for certain IPE training
seminars that are pre-billed.
7.
Current and Long-Term Debt
Revolving Credit Facility
On November 17, 2004, the Company entered into a
$25.0 million revolving credit agreement (the
"Facility") with Wachovia. Under the terms of the
Facility, the Company can borrow an aggregate principal amount
of up to $25.0 million at any time from the closing date of
the Facility through the termination date of the Facility, which
is November 17, 2006. The Company also has the right to
repay and reborrow loans or to permanently reduce in whole or in
part the amount available under the Facility at any time prior
to the termination date of the Facility without premium or
penalty. The Facility includes an unused line fee that is equal
to the unused maximum revolver amount multiplied by an
applicable margin rate and is payable on a quarterly basis. The
applicable margin rate ranges from 0.15% to 0.25% based on a
cash flow leverage ratio calculated on a trailing twelve month
period. Based on this calculation, the applicable margin rate
was 0.15% as of December 31, 2004.
The loans under the Facility bear interest on the principal
amounts outstanding at a rate of LIBOR plus an applicable
margin. The Company has the option to select the interest period
applicable to any loans at the time of borrowing. The interest
periods shall either be a daily LIBOR market index loan or a
LIBOR rate loan with a period of one, three or six months.
Interest on each LIBOR market index loan shall be payable on a
monthly basis and the interest on the LIBOR rate loans shall be
payable on the last day of each interest period. However, if the
interest period is six months, interest shall be payable at and
on the last day of each three month period during the interest
period. The applicable margin rate ranges from 0.85% to 1.05%
based on a cash flow leverage ratio calculated on a trailing
twelve month period. As of December 31, 2004, the
applicable margin rate was 0.85%.
The Company borrowed the entire $25.0 million available
under the Facility on November 23, 2004. These funds were
used for a portion of the $67.5 million redemption of the
Company's Class B redeemable common stock that
occurred in November 2004 (Note 8). As of December 31,
2004, $13.0 million was held in a six month LIBOR rate loan
with a locked-in interest rate, including the applicable margin
rate, of 3.40%. The remaining balance of $12.0 million was
held in a daily LIBOR market index loan with an interest rate,
including the applicable margin rate, of 3.25% as of
December 31, 2004. The Company repaid the
$12.0 million LIBOR market index loan in January 2005 with
excess cash. Therefore, the $12.0 million was shown as a
current liability in the accompanying consolidated balance
sheets.
F-19
IntercontinentalExchange, Inc.
and Subsidiaries
Notes to Consolidated Financial
Statements — (Continued)
The Facility has a negative pledge on all the assets of the
Company and the Company pledged 65% of the stock of its foreign
subsidiary holding company. The Facility also contains certain
affirmative and negative covenants including, but not limited
to, cash flow leverage ratios, minimum tangible net worth ratios
and limitations or approvals needed from Wachovia for
acquisitions, investments, external debt and other fundamental
changes to the business.
Term Notes Payable
In May 2000, the Company entered into a related-party term loan
note agreement with two of the founding shareholders of the
Company (the "Term Notes"). The Term Notes bore
interest on the principal amounts at one-month LIBOR, with
interest compounding monthly and payable at the maturity date.
Interest of $264,000 was accrued to the principal balance of the
Term Notes during the year ended December 31, 2002 in
accordance with the terms of the Term Notes agreements. The Term
Notes matured and $16.5 million was repaid in November
2002. The Term Notes were cancelled and all liens associated
therewith were released in November 2002.
8.
Class B Redeemable Common Stock
In June 2001, the Company purchased the IPE. The Company
acquired the share capital of the IPE in a tax-free
stock-for-stock exchange. Each IPE shareholder received, for
each share tendered to the Company, one Class A,
Series 1 common share and one Class B redeemable
common share of the Company, for an aggregate total of
11,450,319 Class A, Series 1 shares and
11,450,319 Class B redeemable shares.
Under the terms of the offer and the Company's charter, the
Class B redeemable shares had an aggregate redemption value
of $67.5 million and were subject to redemption at the
holder's option for $5.895 per share following the
first anniversary of the date on which the IPE Brent Crude
futures contract and the IPE Gas Oil futures contract have
traded exclusively for ten consecutive days through an
electronic trading platform. The Class B redeemable shares
were also subject to redemption at the holder's option if
certain redemption trigger events occurred including, but not
limited to, if the Company decided not to proceed with an
electronic trading platform for the IPE Brent Crude futures
contract and the Gas Oil futures contract.
The Company recorded the issuance of the Class B redeemable
shares at their discounted present value of $60.2 million
at the date of issuance, and accreted to the redemption value
based on the effective interest method over a two-year period
ended in June 2003. June 15, 2003 was the earliest
potential redemption date under the terms of the Class B
redeemable shares. During the years ended December 31, 2003
and 2002, the Company recorded $1.8 million and
$3.7 million, respectively, in accretion directly to
retained earnings related to the Class B redeemable shares.
On November 5, 2004, pursuant to a vote of the
Company's shareholders, the Company amended its charter to
provide the Company with a mandatory right of redemption with
respect to the Class B redeemable shares. The Company could
redeem all but not less than all of the outstanding shares of
the Class B redeemable shares at the redemption price at
its option with a five day notice period. On November 23,
2004, the Company exercised the mandatory redemption option and
redeemed all 11,450,319 Class B redeemable shares at the
$5.895 redemption value for an aggregate redemption price of
$67.5 million. The Company used the $25.0 million
available under the Facility (Note 7), the
$24.0 million available under the letter-of-credit facility
(Note 3) and $18.5 million of its excess cash for the
$67.5 million redemption. The Class B redeemable
shares received in connection with the redemption hold the
status of undesignated shares of common stock (Note 9).
The Company exercised the mandatory redemption option for
several reasons. Facilitating an early redemption of the
Class B redeemable stock permitted the Company to eliminate
existing credit support
F-20
IntercontinentalExchange, Inc.
and Subsidiaries
Notes to Consolidated Financial
Statements — (Continued)
arrangements attached to the unfulfilled redemption obligations
that existed with respect to the Class B redeemable stock.
Such credit support arrangements have in practice restricted the
Company's ability to incur material debt, to expand its
business and to finance potential acquisitions. The Company also
anticipates that the IPE will move to exclusive electronic
trading during 2005, at which time the Company would have been
obligated to redeem the Class B redeemable stock at the
$5.895 cash redemption value following the anniversary date.
9.
Shareholders' Equity
Common Stock
The following table summarizes the number and classes of shares
of common stock authorized for issuance by the Company as of
December 31, 2004 and 2003:
Number of Shares Authorized
as of December 31,
Par
2004
2003
Value
Class A common stock, Series 1
22,900,638
22,900,638
$
.01
Class A common stock, Series 2
300,000,000
300,000,000
$
.01
Class B redeemable common stock
(Note 8)
—
11,450,319
$
.01
Undesignated shares of common stock
11,450,319
—
—
Shares of Class A and Class B common stock are
identical in all respects and entitle the holders to the same
rights and privileges with respect to dividends, liquidation
preferences and voting rights, except that the Class B
shares were redeemable, as described in Note 8.
As discussed in Note 8, the Company redeemed the
Class B redeemable shares in November 2004. The
Company's charter provides that upon payment of the
redemption price, all rights in respect of the Class B
redeemable shares ceased, no Class B redeemable shares may
be reissued and all such re-acquired shares shall hold the
status of undesignated shares of common stock.
Stock Option Plan
The Company has adopted the IntercontinentalExchange, Inc. 2000
Stock Option Plan (the "Plan"). As of
December 31, 2004, there are 21,000,000 shares of
common stock reserved for issuance under the Plan.
Stock options are granted at the discretion of the compensation
committee of the board of directors. The Company may grant,
under provisions of the Plan, both incentive stock options and
nonqualified stock options. The options generally vest over four
years, but can vest at different intervals based on the
compensation committee's determination. Generally, options
may be exercised up to ten years after the date of grant, but
F-21
IntercontinentalExchange, Inc.
and Subsidiaries
Notes to Consolidated Financial
Statements — (Continued)
generally expire 14 days after termination of employment.
The following is a summary of options for the years ended
December 31, 2004, 2003 and 2002:
Weighted
Average
Number of
Exercise Price
Options
Per Option
Outstanding at January 1, 2002
2,762,706
$
1.31
Granted
8,732,345
3.00
Exercised
(22,163
)
1.21
Forfeited
(766,426
)
2.23
Outstanding at December 31, 2002
10,706,462
2.62
Granted
7,138,352
2.03
Exercised
(10,000
)
2.38
Forfeited
(500,368
)
2.52
Outstanding at December 31, 2003
17,334,446
2.38
Granted
6,646,580
2.00
Exercised
(9,000
)
1.60
Forfeited
(4,475,733
)
2.95
Outstanding at December 31, 2004
19,496,293
2.12
Details of options outstanding as of December 31, 2004 are
as follows:
Weighted
Average
Remaining
Options
Contractual
Options
Exercise Price
Outstanding
Life
Exercisable
$1.05
1,517,936
5.54
1,517,936
1.76
651,335
6.31
593,562
2.00
13,404,932
9.37
1,696,963
3.00
3,922,090
7.46
2,468,127
Of the options outstanding at December 31, 2004, 6,276,588
were exercisable at a weighted-average exercise price of $2.14.
Of the options outstanding at December 31, 2003, 5,023,187
were exercisable at a weighted-average exercise price of $2.38.
Of the options outstanding at December 31, 2002, 1,280,252
were exercisable at a weighted-average exercise price of $1.22.
All stock options were granted at a price equal to the estimated
fair value of the common stock at the date of grant as
determined by the compensation committee. This determination was
primarily based on a valuation performed by an independent third
party.
Pro forma information regarding net income and earnings per
share, as presented in Note 2, is required by
SFAS No. 123, as amended by SFAS No. 148,
and has been determined as if the Company has accounted for its
employee stock options under the fair value method of
SFAS No. 123 as of its effective date. The fair value
of these options was estimated at the date of grant using a
Black-Scholes option-pricing model. The Black-Scholes
option-pricing model is the most common method under
SFAS No. 123 for computing fair value. The
Black-Scholes option pricing model was originally developed for
use in estimating the fair value of traded options which have
different characteristics than the Company's employee stock
options. The model is also sensitive to changes in subjective
assumptions which can materially affect fair value estimates. As
a result, management believes that the Black-Scholes model may
not necessarily provide a reliable single measure of
F-22
IntercontinentalExchange, Inc.
and Subsidiaries
Notes to Consolidated Financial
Statements — (Continued)
the fair value of employee stock options. The pro forma results
are not intended to be indicative of or a projection of future
results.
For SFAS No. 123 disclosure purposes, the Company,
using the Black-Scholes option pricing model and the
weighted-average assumptions included in the table below, has
computed the value of all options for shares of common stock
granted to employees. For purposes of pro forma disclosures, the
estimated fair value of the options is amortized to expense over
the options' vesting period.
Year Ended December 31,
Assumptions
2004
2003
2002
Risk-free interest rate
3.4
%
3.2
%
4.4
%
Expected life in years
5
5
5
Expected volatility
49
%
40
%
59
%
Expected dividend yield
0
%
0
%
0
%
Estimated weighted-average fair value of options granted per
    share
$
0.93
$
0.82
$
1.63
Restricted Stock Deferral Plan for Outside Directors
The Company has adopted the IntercontinentalExchange, Inc. 2003
Restricted Stock Deferral Plan for Outside Directors (the
"Director Plan"). Directors can elect to receive up to
100% of their board compensation in restricted stock or
restricted stock units. All restricted stock is granted at a
price equal to the estimated fair value of the common stock at
the date of grant as determined by the compensation committee.
The restricted stock generally vests over a three-year period.
Under the Director Plan, the compensation committee reserved a
number of the Company's common stock treasury shares
sufficient to cover obligations under the Director Plan for
issuance to the board of directors in lieu of fees otherwise
payable in cash. During the years ended December 31, 2004
and 2003, 12,375 and 15,083 shares, respectively, of
restricted stock units were granted to members of the board of
directors under the Director Plan.
The weighted-average grant date fair value of restricted stock
units granted during the years ended December 31, 2004 and
2003 was $2.00 and $2.63, respectively. The fair value of the
restricted shares on the date of the grant is recognized as
expense ratably over the vesting period. During the years ended
December 31, 2004 and 2003, deferred stock compensation of
$25,000 and $39,000, respectively, was recorded for the
restricted stock grants issued during the years based on the
fair value of the shares on the date of grant and is being
amortized over three years.
During the years ended December 31, 2004 and 2003, $17,000
and $5,000, respectively, was amortized as compensation and
benefits expenses in the accompanying consolidated statements of
income. The unamortized balance of deferred stock compensation
on restricted stock is included as a separate component of
shareholders' equity in the accompanying consolidated
balance sheets.
Restricted Stock Plan
The Company has adopted the IntercontinentalExchange, Inc. 2004
Restricted Stock Plan (the "Restricted Plan"). Under
the Restricted Plan, the compensation committee reserved a
number of the Company's common stock treasury shares
sufficient to cover obligations under the Restricted Plan for
issuance to the employees and board of directors of the Company.
During the year ended December 31, 2004, a maximum of
5,701,700 restricted shares under the Restricted Plan were
reserved for issuance to senior officers of the Company and
members of the board of directors pursuant to awards of
restricted stock units. Of these shares, 3,200,850 were
time-based restricted shares and vest based on a four-year
vesting schedule. Until the shares vest and are issued, the
participants
F-23
IntercontinentalExchange, Inc.
and Subsidiaries
Notes to Consolidated Financial
Statements — (Continued)
have no voting or dividend rights and the shares may not be
sold, assigned, transferred, pledged or otherwise encumbered. As
of December 31, 2004, no restricted treasury shares have
been issued.
The weighted-average grant date fair value of the time-based
restricted stock units granted during the year ended
December 31, 2004 was $2.00. The grant date fair value is
determined by the compensation committee primarily based on a
valuation performed by an independent third party. The fair
value of the restricted shares on the date of the grant is
recognized as expense ratably over the vesting period. During
the year ended December 31, 2004, deferred stock
compensation of $6.4 million was recorded for the
time-based restricted stock grants issued during the year based
on the fair value of the shares on the date of grant and is
being amortized over four years. During the year ended
December 31, 2004, $357,000 was amortized as compensation
and benefits expenses in the accompanying consolidated
statements of income. Granted but unvested shares would be
forfeited upon termination of employment. When restricted stock
is forfeited, compensation costs previously recognized for
unvested shares are reversed. The unamortized balance of
deferred stock compensation on restricted stock is included as a
separate component of shareholders' equity in the
accompanying consolidated balance sheets.
An additional 833,617 to 2,500,850 restricted shares under the
Restricted Plan have been reserved for potential issuance as
performance-based restricted shares for the Company's
senior officers and vest based on Company financial performance
relative to three-year cumulative performance targets (the
"Performance Targets") set by the compensation
committee for the period from January 1, 2005 to
December 31, 2007. The measurement of compensation costs
under the performance-based restricted shares at the date the
Performance Targets have been met determines the ultimate
compensation to be recognized in the consolidated financial
statements. The fair market value of the performance-based
restricted stock at the date of vesting will be recorded as
compensation expense. Because this type of plan is classified as
a variable plan, interim estimates of compensation are required
based on a combination of the then fair market value of the
stock at the end of the reporting periods and the extent or
degree of achievement relative to the performance criteria. No
compensation costs or deferred stock compensation costs have
been recorded in the accompanying consolidated financial
statements as of December 31, 2004, as the performance
period has not commenced and it is not possible at this time to
determine which, if any, of the Performance Targets will be
achieved. If the Performance Targets are not reached, the
corresponding performance-based restricted shares will not be
issued.
Restricted shares are used as an incentive to attract and retain
qualified senior officers and to increase shareholder returns
with actual performance-based awards based on enhanced
shareholder value. As part of the implementation of the
Restricted Plan, the Company's senior officers and members
of the board of directors exchanged a total of 3,770,400 stock
options (which represented all options available for exchange)
that had been granted in 2002 at an exercise price of $3.00.
The Restricted Plan includes a change in control provision that
may accelerate vesting on both the time-based and
performance-based restricted shares if employment is terminated
or if the individual resigns for "good reason" within
12 months after the effective date of a change in control.
This would result in all unamortized deferred stock compensation
relating to the time-based restricted shares being recognized as
compensation expense at the date of the acceleration, which is
the date when both the change in control and the termination in
employment have occurred. All performance-based restricted
shares would also immediately vest and the Company would take a
one time compensation expense charge equal to the maximum number
of performance-based restricted shares multiplied by the fair
market value of the restricted shares at the date of the
acceleration.
Warrants
In connection with their initial investment in the Company,
certain shareholders in the gas and power industries (the
"Gas and Power Firms") were granted warrants to
purchase an additional 10% ownership
F-24
IntercontinentalExchange, Inc.
and Subsidiaries
Notes to Consolidated Financial
Statements — (Continued)
interest in the Company, subject to dilution under certain
events. The Gas and Power Firms could have purchased up to
23,216,381 shares of Class A, Series 2 common
stock upon vesting and exercise of the warrants at an aggregate
exercise price of $75 million, or $3.23 per share. The
warrants would have vested and become exercisable if the
Company's average monthly revenue from transaction
commissions and ancillary and back-office services related to
North American power and gas products traded on the Platform
(the "Gas and Power Revenues") exceeded certain
revenue thresholds (the "Revenue Threshold") over a
consecutive 12-month period. The measurement period for the
Revenue Threshold began on October 1, 2001 and expired on
September 30, 2004. If such warrants had vested, the fair
value of the warrants would have been recorded as a reduction to
revenues in the month that vesting occurred based on the value
of the Company at the date of vesting.
For all 12-month periods during the vesting period, the Gas and
Power Revenues were substantially less than the Revenue
Thresholds. Accordingly, such warrants did not vest and
therefore, the Company did not assign any value to the warrants.
The warrants expired unvested on September 30, 2004.
Treasury Stock
During the year ended December 31, 2003, the Company
received 6,704,931 Class A, Series 2 shares from
certain shareholders of the Company related to an order flow
commitment shortfall in lieu of cash payments to the Company
(Note 12). The Company recorded the receipt of the shares
as treasury stock. The Company subsequently reissued 567,696
treasury shares during the year ended December 31, 2003.
During the year ended December 31, 2004, the compensation
committee reserved 5,701,700 treasury shares for potential
issuance under the Restricted Plan and 27,458 for potential
issuance under the Restricted Stock Deferral Plan for Outside
Directors. Treasury stock activity is presented in the
accompanying consolidated statements of changes in
shareholders' equity.
10.
Income Taxes
For the years ended December 31, 2004, 2003 and 2002,
income before income taxes from domestic operations was
$10.0 million, $386,000 and $35.1 million,
respectively, and income before income taxes from foreign
operations was $23.7 million, $19.5 million and
$17.3 million, respectively. Details of the income tax
provision in the accompanying consolidated statements of income
for the years ended December 31, 2004, 2003 and 2002, are
as follows:
Year Ended December 31,
2004
2003
2002
(in thousands)
Current tax expense:
Domestic
$
4,992
$
289
$
9,771
Foreign
7,360
6,662
4,909
12,352
6,951
14,680
Deferred tax expense (benefit):
Domestic
(298
)
(402
)
2,953
Foreign
(281
)
(60
)
106
(579
)
(462
)
3,059
Total tax expense
$
11,773
$
6,489
$
17,739
F-25
IntercontinentalExchange, Inc.
and Subsidiaries
Notes to Consolidated Financial
Statements — (Continued)
The tax effects of temporary differences between the carrying
amount of assets and liabilities in the consolidated financial
statements and their respective tax bases which give rise to
deferred tax assets (liabilities) as of December 31,
2004 and 2003 are as follows:
December 31,
2004
2003
(in thousands)
Deferred tax assets:
Allowance for doubtful accounts
$
53
$
22
Book depreciation in excess of tax
591
—
Deferred compensation
134
—
Accrued expenses
867
673
Other
4
—
Total deferred tax assets
1,649
695
Deferred tax liabilities:
Capitalization and amortization of software development costs
(2,787
)
(3,027
)
Tax depreciation in excess of books
—
(315
)
Property and intangible costs
(2,001
)
(2,448
)
Tax accrued on undistributed earnings of foreign subsidiaries
    (pre and post acquisition earnings)
(5,030
)
(3,401
)
Other
(498
)
(350
)
Total deferred tax liabilities
(10,316
)
(9,541
)
Net deferred tax liabilities
(8,667
)
(8,846
)
Net current deferred tax assets
426
345
Net noncurrent deferred tax liabilities
$
(9,093
)
$
(9,191
)
A reconciliation of the statutory U.S. federal income tax
rate to the Company's effective income tax rate for the
years ended December 31, 2004, 2003 and 2002 are as follows:
Year Ended
December 31,
2004
2003
2002
Statutory federal income tax rate
35.0
%
35.0
%
35.0
%
State income taxes, net of federal benefit
0.5
0.2
1.7
Tax credits
(0.5
)
(1.2
)
(0.8
)
Other
(0.1
)
(1.3
)
(2.1
)
Total provision for income taxes
34.9
%
32.7
%
33.8
%
The pre and post acquisition undistributed earnings of the
Company's foreign subsidiaries based on the period-end
exchange rates totaled $71.5 million and $54.1 million
as of December 31, 2004 and 2003, respectively, which will
not be subject to U.S. income tax until distributed. The
Company has provided for U.S. federal income taxes on these
undistributed earnings in the accompanying consolidated
statements of income as they are not expected to be permanently
reinvested.
The Jobs Act provides for a temporary 85% dividends received
deduction on certain foreign earnings repatriated during a
one-year period. The deduction would result in an approximate
5.25% federal tax rate on
F-26
IntercontinentalExchange, Inc.
and Subsidiaries
Notes to Consolidated Financial
Statements — (Continued)
the repatriated earnings. To qualify for the deduction, the
earnings must be reinvested in the U.S. pursuant to a
domestic reinvestment plan established by the Company's
chief executive officer and approved by the Company's board
of directors. Certain other criteria in the Jobs Act must be
satisfied as well. The maximum amount of the Company's
foreign earnings that qualify for the temporary deduction is
$71.5 million as of December 31, 2004.
The Company is in the process of evaluating whether it will
repatriate foreign earnings under the repatriation provisions of
the Jobs Act, and if so, the amount that will be repatriated. As
substantially all of the Company's foreign earnings have
been subject to tax at a local country rate of approximately 30%
or greater, the application of this new repatriation provision
to these earnings may result in insignificant or no benefit to
the Company. The Company is awaiting the issuance of further
regulatory guidance and passage of statutory technical
corrections with respect to certain provisions in the Jobs Act
prior to deciding whether to repatriate funds under the Jobs
Act. It anticipates making a decision within a reasonable time
period following the issuance of such clarifying regulations and
enactment of technical corrections legislation. The range of
reasonably possible amounts that the Company is considering for
repatriation under the Jobs Act is zero to $71.5 million.
The reasonably possible range of related tax expense is zero to
the amount of deferred taxes currently provided for
undistributed earnings of foreign subsidiaries.
11.
Related-Parties
Related-parties include principal owners of the Company and
other parties that control or can significantly influence the
management or operating policies of the Company. Principal
owners include any party that owns more than 10% of the voting
interest in or common stock of the Company. The Company has
classified all companies that had board of director
participation as a related-party due to their significant
influence over the Company. Through the end of October 2002, ten
shareholders had a seat on the Company's board of
directors. Beginning in November 2002, these companies no longer
had representation on the Company's board of directors and,
except for two shareholders who held more than 10% of the common
stock of the Company, were no longer considered related-parties.
CCX is considered a related-party due to the founder and Chief
Executive Officer of CCX being a member of the Company's
board of directors. Revenues earned from related-parties of the
Company totaled $12.9 million, $12.2 million and
$52.8 million for the years ended December 31, 2004,
2003 and 2002, respectively. As of December 31, 2004 and
2003, the Company had $1.3 million and $1.1 million,
respectively, in accounts receivable from related-parties.
On May 11, 2000, the Company entered into the Term Note
agreements with two related-parties, which were repaid in
November 2002. See Note 7 for more detail of these
related-party notes.
The Company entered into annual order flow commitments with
related-party companies, which committed these companies to
execute a minimum annual volume of transactions through the
Platform. See Note 12 for more detail on these
related-party order flow commitments.
The Company entered into several foreign exchange forward
contracts with a related-party company during the year ended
December 31, 2004 (Note 13). The Company paid $353,000
relating to these hedges during the year ended December 31,
2004 to this related-party company. The Company also had an
additional $1.3 million accrued to this related-party
company as of December 31, 2004 relating to a hedge that
expires in June 2005, which is included in accrued liabilities
in the accompanying consolidated balance sheets.
During 2001, the Company advanced $500,000 to a senior officer
of the Company, with the loan due in five installments of
$100,000 over a five-year period. The payments would be forgiven
each year based on continued employment by the officer. The
forgiveness each year was recorded as compensation and benefits
expense in the accompanying consolidated statements of income.
As of December 31, 2003, the balance of the
F-27
IntercontinentalExchange, Inc.
and Subsidiaries
Notes to Consolidated Financial
Statements — (Continued)
note totaled $201,000. The remaining balance was forgiven during
the year ended December 31, 2004 in connection with the
officer entering into a new employment agreement (Note 13).
The Company's predecessor company, Continental Power
Exchange, Inc. ("CPEX"), is owned by a senior officer
of the Company. The Company currently has a put agreement with
CPEX. Under the terms of the agreement, in certain
circumstances, CPEX has the right to require the Company to
purchase all, but not less than all, of the Company's
common stock held by CPEX for an amount equal to the greater of
fair market value at the date the put is exercised, or
$5 million. CPEX owns 9,961,298 shares of the
Company's common stock and based on the $2.00 estimated
fair value of the common stock as of December 31, 2004, the
fair market value of the common stock held by CPEX is in excess
of the $5 million threshold. Upon exercise of the put
option, the Company can either pay cash within 30 days of
the exercise or can elect to issue a promissory note and defer
payment for one year, with interest accruing on the note at
LIBOR plus 1%.
12.
Order Flow Commitments
Certain of the Company's founding shareholders (the
"Founding Shareholders") and the Gas and Power Firms
executed annual order flow commitments in connection with the
formation of, and their investment in, the Company, which
committed them to transact a minimum volume of various
transactions through the Platform. The Company also entered into
order flow commitments with seven companies (the "Euro Gas
Order Flow Providers") during November 2001 to trade
European gas products on the Platform.
Founding Shareholders' Commitments
The Founding Shareholders entered into annual order flow
commitments with the Company, whereby such members individually
committed to enter into an annual minimum volume of executed oil
and/or precious metals transactions through the Platform. The
Founding Shareholders' annual order flow commitments reset
each year and were for a two-year period, which began in
September 2000 and expired in August 2002 for precious metals
transactions and began in November 2000 and expired in October
2002 for oil transactions.
Under the terms of the Founding Shareholders' annual order
flow commitments, in the event that such members failed to meet
the minimum volume of transactions specified in the agreements,
imputed on a month-to-date basis, such members were billed for
the difference between the imputed monthly minimum commitment
and any actual executed transactions by such members or their
affiliates, multiplied by an imputed commission rate. To the
extent that the Founding Shareholders transacted sufficient
volume to satisfy the order flow commitments at any point in the
annual commitment period, any amounts previously billed as order
flow shortfall were refunded to the Founding Shareholders.
Therefore, monthly billings related to unmet order flow
commitments were recorded as deferred revenue and not recognized
until the end of the annual commitment periods as these amounts
were potentially refundable. For the year ended
December 31, 2002, the Company recognized $2.2 million
in transaction fee revenues related to unmet Founding
Shareholders' annual order flow commitments for the
commitment periods that expired during the year.
Gas and Power Firms' Commitments
Under the terms of the Gas and Power Firms' annual order
flow agreement, the Gas and Power Firms committed as a group to
enter into an annual minimum volume of executed North American
power and gas transactions through the Platform. The Gas and
Power Firms' annual order flow commitments reset each year
and were for a two-year period, which began in July 2001 and
expired in June 2003. Under the terms of this agreement, in the
event that the Gas and Power Firms failed to meet the minimum
volume of transactions specified in the agreement, imputed on a
month-to-date basis, the Gas and Power Firms were billed for the
difference between the imputed monthly minimum commitment and
any actual executed transactions by the
F-28
IntercontinentalExchange, Inc.
and Subsidiaries
Notes to Consolidated Financial
Statements — (Continued)
members or their affiliates, multiplied by an imputed commission
rate. To the extent that the Gas and Power Firms transacted
sufficient volume to satisfy the order flow commitments at any
point in the annual commitment period, any amounts previously
billed as order flow shortfall were refunded to the Gas and
Power Firms. Therefore, monthly billings related to unmet order
flow commitments were recorded as deferred revenue and not
recognized until the end of the annual commitment periods as
these amounts were potentially refundable.
For the year ended December 31, 2003, the Company
recognized $6.4 million in transaction fee revenues related
to unmet Gas and Power Firms' annual order flow commitment
for the commitment period that expired during the year. A
portion of the shortfall was paid in cash and the remainder was
satisfied through the delivery to the Company of shares of the
Company's Class A, Series 2 common stock
(Note 9). The fair market value of the Company's
common stock received from the Gas and Power Firms was in excess
of the contractual obligation owed under the order flow
shortfall. However, the Company only recognized revenues to the
extent of the contractual order flow commitment.
There were no revenues recognized during the year ended
December 31, 2002 relating to the Gas and Power Firms'
annual order flow agreement as the Gas and Power Firms exceeded
their commitment in the first annual commitment period.
Euro Gas Order Flow Providers' Commitments
The Euro Gas Order Flow Providers individually committed to
enter into executed transactions for European gas ("Euro
Gas") product groups through the Platform which resulted in
annual or monthly minimum transaction payments to the Company.
The Euro Gas Order Flow Providers' order flow commitments
began in January 2002 and continued through December 2004. Under
the terms of such order flow agreements, in the event that the
Euro Gas Order Flow Providers failed to execute the annual or
monthly required minimum transactions, the Euro Gas Order Flow
Providers paid to the Company the difference in transaction fees
actually paid and minimum payments required under the order flow
agreements. During the years ended December 31, 2004, 2003
and 2002, the Company recognized $1.1 million, $764,000 and
$1.3 million, respectively, in transaction fee revenues
related to unmet Euro Gas Order Flow Providers' order flow
commitments for commitment periods that expired during such
years.
The Euro Gas Order Flow Providers originally received reduced
commission rates for executed transactions for Euro Gas products
as a result of their commitments in the order flow agreements.
However, beginning in March 2003, the Company reduced commission
rates for all other customers to be equal to the Euro Gas Order
Flow Providers commission rates. The order flow agreements also
required the Company to distribute to the Euro Gas Order Flow
Providers their respective share of a revenue sharing pool
annually through 2006. The revenue sharing pool was equal to 20%
of the transaction fee revenues earned by the Company from
trading of all Euro Gas product groups, subject to certain
adjustments. The Euro Gas Order Flow Providers do not share in
the revenue sharing pool, for the current year and for all
future years, if they do not trade a minimum annual volume of
executed transactions for Euro Gas product groups through the
Platform to become an eligible order flow provider. For the
years ended December 31, 2003 and 2002, the Company paid
$61,000 and $188,000, respectively, relating to the revenue
sharing pool to certain Euro Gas Order Flow Providers that
qualified as eligible order flow providers. The Company recorded
the revenue sharing pool amounts payable to the Euro Gas Order
Flow Providers as a reduction to transaction fee revenues.
As of December 31, 2003, none of the Euro Gas Order Flow
Providers qualified as eligible order flow providers. Under the
terms of the Euro Gas Order Flow Providers' commitments,
the Company is therefore, no longer required to accrue or pay
any amounts relating to the revenue sharing pools subsequent to
December 31, 2003.
F-29
IntercontinentalExchange, Inc.
and Subsidiaries
Notes to Consolidated Financial
Statements — (Continued)
13.
Commitments and Contingencies
Leases
The Company leases office space, equipment facilities, and
certain computer equipment. As of December 31, 2004, future
minimum lease payments under these noncancelable agreements are
as follows:
Operating
Capital
(in thousands)
2005
$
1,867
$
512
2006
1,309
—
2007
1,047
—
2008
761
—
$
4,984
512
Less amounts representing interest and tax
30
Present value of minimum lease payment, current portion
$
482
As of December 31, 2004, 2003 and 2002, the Company had
capital lease obligations of $482,000, $2.1 million and
$2.7 million, respectively. The amortization of assets
recorded under capital leases is included in depreciation
expense in the accompanying consolidated statements of income
and totaled $1.2 million, $2.8 million and
$2.3 million for the years ended December 31, 2004,
2003 and 2002, respectively. Rental expense amounted to
$5.3 million, $5.2 million and $5.6 million for
the years ended December 31, 2004, 2003 and 2002,
respectively.
Licensing Agreement
In March 2002, the Company entered into a long-term,
non-exclusive licensing agreement with a third party, which
granted the use of the third party's patent to the Company
and its majority-owned and controlled affiliates. The patent
relates to automated futures trading systems in which
transactions are completed by a computerized matching of bids
and offers of futures contracts on an electronic platform. The
license of the patent provides legal certainty to traders,
clearing banks and brokers wishing to utilize the Company's
Platform for trading futures contracts from within the
U.S. Under the agreement, the Company is required to pay
minimum annual license fees of $2.0 million beginning
April 5, 2002 through the expiration date of the patent in
February 2007 along with additional royalty payments calculated
quarterly, which have been insignificant through December 2004.
The agreement covers the Company's use of the patent in
certain markets including energy, certain metals, weather,
sulfur and nitrogen pollution allowances and financial products
specifically related to products in these markets.
The Company recorded amortization expense of $2.0 million,
$2.0 million and $1.5 million during the years ended
December 31, 2004, 2003 and 2002, respectively, relating to
the licensing agreement. As of December 31, 2004 and 2003,
the balance of $500,000 relating to the unamortized annual
license fee payment is included in prepaid expenses in the
accompanying consolidated balance sheets.
Employment Agreements
The Company has entered into employment agreements with all of
its corporate officers. If the corporate officers are terminated
without cause, the employment agreements result in separation
payments ranging from six months to three years of the corporate
officer's annual base salary. In some cases, the employment
agreements also stipulate an additional payment for bonus
compensation for the balance of the term of the
F-30
IntercontinentalExchange, Inc.
and Subsidiaries
Notes to Consolidated Financial
Statements — (Continued)
employment agreement. Also, certain employment agreements have
provisions that provide for termination payments following a
change of control and corresponding loss of employment, which
generally provide for base salary, bonus payment, benefits
continuation for the full term of the employment agreement
(ranging from one to three years), gross up payment for any
excise taxes due under Section 4999 of the Internal Revenue
Code of 1986 and the acceleration of vesting of any stock
options granted after the execution of the employment agreements.
The Company's U.K. subsidiaries, in accordance with normal
U.K. practice, have entered into employment agreements with all
of its employees. The employment agreements require a severance
notice ranging from one to six months.
Legal Proceedings
In November 2002, the New York Mercantile Exchange, Inc.
("NYMEX") filed suit against the Company in United
States District Court, Southern District of New York. In the
suit, NYMEX alleges that the Company has infringed certain
intellectual property rights of NYMEX through the use of
settlement prices of futures contracts listed on NYMEX and
references to NYMEX in describing products traded on the
Platform. The Company filed an answer and counterclaims in
January 2003. NYMEX filed a motion to dismiss the Company's
counterclaims, which was denied in part and granted in part,
with leave for the Company to amend its counterclaims. The
Company filed an amended and restated answer and counterclaims
in August 2003. The Company's amended counterclaims
asserted that NYMEX has engaged in violations of the federal
antitrust laws by, among other things, seeking to prevent the
Company from accessing its settlement prices. The counterclaims
also sought a declaratory judgment that NYMEX does not hold a
copyright in its settlement prices, that any copyright found
cannot be enforced against the Company, and that the Company has
not infringed any copyright.
NYMEX filed a motion to dismiss the Company's amended
counterclaims, and the court granted NYMEX's motion and
dismissed the Company's antitrust counterclaims in June
2004. In September 2004, the Company filed a motion for summary
judgment seeking judgment as a matter of law with respect to the
claims in NYMEX's complaint. In November 2004, NYMEX filed
a cross motion for summary judgment seeking judgment as a matter
of law regarding the issue of copyrightability of its settlement
prices and with respect to its claim that the Company tortuously
interfered with a contract between NYMEX and the party from
which the Company licenses NYMEX's settlement prices. The
Court heard oral argument on the cross motions for summary
judgment in February 2005, but has yet to issue an order.
No trial date has been scheduled in this action. At this point
in time, the Company does not believe that the resolution of
this matter will have a material adverse effect on the
Company's consolidated financial condition, results of
operations, or liquidity.
In January 2004, EBS Dealing Resources, Inc. ("EBS")
filed a complaint against the Company in United States District
Court, Southern District of New York, alleging that the Company
infringes two patents held by EBS related to credit filter
technology for electronic brokerage systems. The Company filed
an answer denying liability in March 2004. EBS has requested
injunctive relief and monetary damages for the alleged patent
infringement, but has not specified an amount of damages in its
complaint. Fact discovery in the case is scheduled to conclude
in March 2005, with a trial set for February 2006 pursuant to
the court's present scheduling order. At this point in
time, the Company does not believe that the resolution of this
matter will have a material adverse effect on the Company's
consolidated financial condition, results of operations, or
liquidity.
The Company is subject to other potential legal proceedings and
claims which arise in the ordinary course of business. The
Company has concluded that these proceedings and claims have not
proceeded sufficiently for
F-31
IntercontinentalExchange, Inc.
and Subsidiaries
Notes to Consolidated Financial
Statements — (Continued)
their likely outcomes to be determinable. It is possible,
however, that future results of operations for any particular
quarterly or annual period could be materially and adversely
affected by any new developments relating to these proceedings
and claims, including the NYMEX and EBS suits discussed above.
Foreign Currency Hedging Transactions
A significant portion of the Company's revenues, earnings
and net assets are exposed to changes in foreign exchange rates,
primarily relating to the operations of the IPE and the other
U.K.-based subsidiaries in relation to pounds sterling. For the
years ended December 31, 2004, 2003 and 2002, the U.K.
subsidiaries' average exchange rate of pounds sterling to
the U.S. dollar, which was used to translate the U.K.
subsidiaries' revenues and expenses into U.S. dollars,
was 1.8296, 1.6341 and 1.5071, respectively. The appreciation of
pounds sterling relative to the U.S. dollar has had a
significant impact on the Company's operating results due
to the significance of our U.K-based subsidiaries'
operations (Note 15). The Company seeks to manage its
foreign exchange risk and exposure in part through operational
means, including managing expected local currency revenues in
relation to local currency expenses (primarily through billing
certain IPE fees in U.S. dollars) and local currency assets
in relation to local currency liabilities (primarily through
converting the U.K. subsidiaries cash to U.S. dollar
denominated investments). In addition, as discussed in
Note 2, the Company entered into forward exchange
instruments during the years ended December 31, 2004 and
2003 to protect a portion of the net investments in its foreign
subsidiaries from adverse fluctuations in foreign exchange rates.
The foreign exchange forward contract derivative financial
instruments had maturities ranging from two months to eight
months. As of December 31, 2004 and 2003, the Company had
hedged $24.9 million and $36.6 million, respectively,
of the $58.2 million and $52.5 million, respectively,
in foreign subsidiaries net assets held in pounds sterling based
on the year-end exchange rates. Under SFAS No. 133,
changes in the fair value of these derivative financial
instruments are recognized as a component of accumulated other
comprehensive income, to offset the change in value of the net
investment being hedged. For the years ended December 31,
2004 and 2003, $2.1 million and $441,000, respectively, of
losses, net of taxes, relating to the derivative financial
instruments were recorded in accumulated other comprehensive
income in the accompanying consolidated statements of
comprehensive income. As of December 31, 2004 and 2003,
$1.3 million and $708,000, respectively, relating to the
derivative financial instruments were included in accrued
liabilities in the accompanying consolidated balance sheets.
When entered into, the Company formally designates and documents
the derivative financial instrument as a hedge of a specific
underlying exposure, as well as the risk management objectives
and strategies for undertaking the hedge transactions. The
Company formally assesses, both at inception and at least
quarterly thereafter, whether the derivative financial
instruments that are used in hedging transactions are effective
at offsetting changes in either the fair value or cash flows of
the related underlying exposure. Because of the high degree of
effectiveness between the hedging instruments and the underlying
exposure being hedged, fluctuations in the value of the
derivative financial instruments are offset by changes in the
fair value or cash flows of the underlying exposures being
hedged. The Company's derivatives are OTC financial
instruments with liquid markets.
The Company does not enter into derivative financial instruments
for trading purposes. The counterparties with whom the Company
trades foreign exchange contracts are major U.S. and
international financial institutions, including one which is a
related-party (Note 11). The Company continually monitors
its position with and the credit quality of the financial
institutions and does not expect nonperformance by the
counterparties.
F-32
IntercontinentalExchange, Inc.
and Subsidiaries
Notes to Consolidated Financial
Statements — (Continued)
14.
Employee Benefit Plans
Employees of the Company are eligible to participate in the
Company's 401(k) and Profit Sharing Plan (the "401(k)
Plan"). The Company offers a match of 100% of the first 5%
of the eligible employee's compensation contributed to the
401(k) Plan, subject to plan and statutory limits. Total
matching contributions under the Company's 401(k) Plan for
the years ended December 31, 2004, 2003 and 2002 were
$617,000, $556,000 and $473,000, respectively. No discretionary
or profit sharing contributions were made during the years ended
December 31, 2004, 2003 or 2002.
The Company's U.K.-based subsidiaries have a defined
contribution pension plan for eligible employees. The Company
contributes a percentage of the employee's base salary to
the plan each month and employees are also able to make
additional voluntary contributions, subject to plan and
statutory limits. The Company's contribution ranges from
10% to 20% of the employee's base salary. Total pension
contributions made by the Company for the years ended
December 31, 2004, 2003 and 2002 were $789,000, $750,000
and $617,000, respectively.
15.
Segment Reporting
The Company's principal business segments consist of its
OTC business and its futures business. The operations of ICE
Services U.S., 10x, ICE Services UK and ICE Tech have been
included in the OTC business segment as they primarily support
the Company's OTC business operations. Prior to the
Company's acquisition of the IPE in June 2001, the Company
had only one reportable business segment, the OTC business,
which was limited to the U.S.
Intersegment revenues and transactions attributable to the
performance of services are recorded at cost plus an agreed
market percentage intercompany profit. Intersegment revenues
attributable to licensing transactions have been priced in
accordance with comparable third party agreements. The Company
had $7.9 million and $4.8 million in intersegment
revenues during the years ended December 31, 2004 and 2003,
respectively, primarily relating to fees paid from the futures
business segment to the OTC business segment as required under
the technical services agreement.
F-33
IntercontinentalExchange, Inc.
and Subsidiaries
Notes to Consolidated Financial
Statements — (Continued)
The accounting policies of the business segments are the same as
those described in the summary of significant accounting
policies. Financial data for the Company's business
segments and geographic areas are as follows:
OTC
Futures
Business
Business
Segment
Segment
Total
(in thousands)
Year ended December 31, 2004:
Revenues from external customers
$
52,907
$
55,507
$
108,414
Intersegment revenues
7,530
353
7,883
Depreciation and amortization
14,609
2,415
17,024
Interest income
939
1,946
2,885
Interest expense
137
—
137
Income tax expense
3,366
8,407
11,773
Net income
6,337
15,612
21,949
Total assets
149,450
58,068
207,518
Capital expenditures and software development costs
4,431
2,113
6,544
Goodwill and other intangibles, net
86,075
—
86,075
Net cash provided by operating activities
19,230
20,931
40,161
Geographic areas:
United
European
States
Union
Total
(in thousands)
Year ended December 31, 2004:
Revenues
$
53,009
$
55,405
$
108,414
As of December 31, 2004:
Property and equipment, net
10,263
9,101
19,364
Revenues from one customer of the futures business segment
comprised 13% of the Company's futures revenues for the
year ended December 31, 2004. No additional customers
accounted for more than 10% of the Company's segment
revenues or consolidated revenues during the year ended
December 31, 2004.
F-34
IntercontinentalExchange, Inc.
and Subsidiaries
Notes to Consolidated Financial
Statements — (Continued)
OTC
Futures
Business
Business
Segment
Segment
Total
(in thousands)
Year ended December 31, 2003:
Revenues from external customers
$
44,652
$
49,094
$
93,746
Intersegment revenues
4,735
79
4,814
Depreciation and amortization
17,224
2,117
19,341
Interest income
462
1,232
1,694
Interest expense
80
—
80
Income tax (benefit) expense
(781
)
7,270
6,489
Net (loss) income
(126
)
13,503
13,377
Total assets
158,211
56,668
214,879
Capital expenditures and software development costs
4,133
2,649
6,782
Goodwill and other intangibles, net
81,448
—
81,448
Net cash provided by operating activities
12,807
14,286
27,093
Geographic areas:
United
European
States
Union
Total
(in thousands)
Year ended December 31, 2003:
Revenues
$
45,635
$
48,111
$
93,746
As of December 31, 2003:
Property and equipment, net
15,283
10,342
25,625
Revenues from one customer of the futures business segment
comprised 15% of the Company's futures revenues for the
year ended December 31, 2003. No additional customers
accounted for more than 10% of the Company's segment
revenues or consolidated revenues during the year ended
December 31, 2003.
OTC
Futures
Business
Business
Segment
Segment
Total
(in thousands)
Year ended December 31, 2002:
Revenues
$
87,345
$
38,145
$
125,490
Depreciation and amortization
13,406
962
14,368
Interest income
1,033
923
1,956
Interest expense
400
—
400
Income tax expense
11,679
6,060
17,739
Net income
23,452
11,254
34,706
Total assets
127,403
42,650
170,053
Capital expenditures and software development costs
18,194
2,597
20,791
Goodwill and other intangibles, net
73,950
—
73,950
Net cash provided by operating activities
38,497
12,675
51,172
F-35
IntercontinentalExchange, Inc.
and Subsidiaries
Notes to Consolidated Financial
Statements — (Continued)
Geographic areas:
United
European
States
Union
Total
(in thousands)
Year ended December 31, 2002:
Revenues
$
85,322
$
40,168
$
125,490
As of December 31, 2002:
Property and equipment, net
22,285
10,558
32,843
Revenues from one customer of the OTC business segment comprised
10% of the Company's consolidated revenues and 14% of the
Company's OTC revenues for the year ended December 31,
2002. Revenues from one customer of the futures business segment
comprised 13% of the Company's futures revenues for the
year ended December 31, 2002.
16.
Earnings Per Common Share
The following is a reconciliation of the numerators and
denominators of the basic and diluted earnings per common share
computations for the years ended December 31, 2004, 2003
and 2002:
Year Ended December 31,
2004
2003
2002
(in thousands, except per share amounts)
Basic:
Net income available to common shareholders
$
21,949
$
11,609
$
31,050
Weighted average common shares outstanding
211,460
217,316
217,570
Basic earnings per common share
$
0.10
$
0.05
$
0.14
Diluted:
Weighted average common shares outstanding
211,460
217,316
217,570
Effect of dilutive securities:
Stock options and warrants
788
1,243
1,830
Diluted weighted average common shares outstanding
212,248
218,559
219,400
Diluted earnings per common share
$
0.10
$
0.05
$
0.14
The 11,450,319 Class B redeemable common shares, the
unvested restricted shares granted and substantially all of the
Gas and Power Firms' warrants to purchase 23,216,381
common shares have not been included in the computation of
diluted earnings per share in the applicable periods when they
were outstanding because their effects would be antidilutive.
F-36
IntercontinentalExchange, Inc.
and Subsidiaries
Notes to Consolidated Financial
Statements — (Continued)
17.
Quarterly Financial Data (Unaudited)
The following table has been prepared from the financial records
of the Company, and reflects all adjustments that are, in the
opinion of management, necessary for a fair presentation of the
results of operations for the interim periods presented.
1st Qtr
2nd Qtr(a)
3rd Qtr
4th Qtr(b)
Total
(in thousands, except per share amounts)
Year Ended December 31, 2004
Revenues
$
24,213
$
26,258
$
29,447
$
28,496
$
108,414
Operating income
6,878
7,745
9,717
8,054
32,394
Net income available to common shareholders
4,622
5,437
7,051
4,839
21,949
Earnings per common share — Basic and Diluted
$
0.02
$
0.03
$
0.03
$
0.02
$
0.10
Year Ended December 31, 2003
Revenues
$
24,168
$
26,361
$
20,837
$
22,380
$
93,746
Operating income
5,279
6,981
2,231
4,427
18,918
Net income available to common shareholders
2,771
3,746
1,567
3,525
11,609
Earnings per common share — Basic and Diluted
$
0.01
$
0.02
$
0.01
$
0.01
$
0.05
(a)
The Company recognized $6.4 million in revenues during the
    second quarter of 2003 relating to unmet order flow commitments
    for commitment periods that expired during the quarter
    (Note 12).
(b)
The Company recognized $2.3 million in a special fee rebate
    program during the fourth quarter of 2004. The fee rebate was
    shown as a reduction to revenues and was designed to promote the
    electronic futures trading on our Platform (Note 2).
18.
Subsequent Events (Unaudited)
On January 5, 2005, the compensation committee granted
options to members of the board of directors to
purchase 700,000 shares of common stock under the Plan
at $2.00 per share. All options were granted at a price
equal to the estimated fair value of the common stock on the
date of grant as determined by the compensation committee. These
options vest over four years and expire ten years after the date
of grant.
On March 7, 2005, the Company announced its intention to
close its open-outcry trading floor in London on April 7,
2005. This was done to take advantage of the increasing
acceptance and adoption of electronic trading and to maintain
and enhance the Company's competitive position. Thereafter,
all of the futures trading will be conducted exclusively on the
Platform. The Company currently estimates that it will incur
costs primarily in the second quarter of 2005 ranging from
$6.0 million to $8.0 million in connection with the
closure of the open-outcry trading floor. These expenses
primarily include lease termination costs, employee termination
costs and property and equipment disposals relating to the
open-outcry trading floor.
F-37
No
dealer, salesperson or other person is authorized to give any
information or to represent anything not contained in this
prospectus. You must not rely on any unauthorized information or
representations. This prospectus is an offer to sell only the
shares offered hereby, but only under circumstances and in
jurisdictions where it is lawful to do so. The information
contained in this prospectus is current only as of its date.
TABLE OF CONTENTS
Page
Prospectus Summary
1
Risk Factors
10
Forward-Looking Statements
28
Use of Proceeds
29
Dividend Policy
29
Capitalization
30
Dilution
31
Selected Consolidated Financial Data
32
Management's Discussion and Analysis of Financial Condition
    and Results of Operations
36
Industry Overview
75
Business
86
Regulation and Legal Proceedings
109
Management
113
Certain Relationships and Related Transactions
125
Principal and Selling Shareholders
131
Organization and Recapitalization
134
Description of Capital Stock
136
Shares Eligible for Future Sale
140
Certain United States Tax Consequences to Non-U.S. Holders
    of Common Stock
142
Underwriting
145
Validity of the Common Stock
148
Experts
148
Where You Can Find More Information
148
Index to Financial Statements
F-1
Unless
otherwise indicated, all information in this prospectus assumes
that the underwriters' over-allotment option will not be
exercised.
Through
and
including                     ,
2005 (the 25th day after the date of this prospectus), all
dealers effecting transactions in these securities, whether or
not participating in this offering, may be required to deliver a
prospectus. This is in addition to a dealer's obligation to
deliver a prospectus when acting as an underwriter with respect
to an unsold allotment or subscription.
Shares
Common Stock
Joint Book-Running Managers
Morgan Stanley
Goldman, Sachs & Co.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13.
Other Expenses of Offering and Distribution
The following is a statement of the estimated expenses to be
incurred in connection with the distribution of the securities
registered under this registration statement:
Amount to
be Paid
SEC registration fee
$
13,536
NASD fees and expenses
$
12,000
Legal fees and expenses
*
Fees and expenses of qualification under state securities laws
    (including legal fees)
*
New York Stock Exchange listing fees and expenses
*
Accounting fees and expenses
*
Printing and engraving fees
*
Registrar and transfer agent's fees
*
Miscellaneous
*
—
Total
$
*
*
To be provided by amendment
Item 14.
Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law (the
"DGCL") provides that a corporation may indemnify
directors and officers, as well as other employees and
individuals, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with any
threatened, pending or completed actions, suits or proceedings
in which such person is made a party by reason of such person
being or having been a director, officer, employee or agent of
the Corporation, subject to certain limitations. The statute
provides that it is not exclusive of other rights to which those
seeking indemnification may be entitled under any by-law,
agreement, vote of shareholders or disinterested directors or
otherwise. Section 7.6 of our bylaws provides for
indemnification by us of our directors, officers and employees
to the fullest extent permitted by the DGCL.
Section 102(b)(7) of the DGCL permits a corporation to
provide in its charter that a director of the corporation shall
not be personally liable to the corporation or its shareholders
for monetary damages for breach of fiduciary duty as a director,
except for liability (1) for any breach of the
director's duty of loyalty to the corporation or its
shareholders, (2) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation
of law, (3) for payments of unlawful dividends or unlawful
stock purchases or redemptions, or (4) for any transaction
from which the director derived an improper personal benefit.
Our charter provides for such limitation of liability.
We expect to maintain standard policies of insurance under which
coverage is provided (1) to our directors and officers
against loss rising from claims made by reason of breach of duty
or other wrongful act, and (2) to us with respect to
payments which may be made by us to such officers and directors
pursuant to the above indemnification provision or otherwise as
a matter of law.
The proposed form of Underwriting Agreement filed as
Exhibit 1.1 to this Registration Statement provides for
indemnification to our directors and officers by the
underwriters against certain liabilities.
II-1
Item 15.
Unregistered Securities Transactions
During the past three years, the Registrant has issued
securities that were not registered under the Securities Act as
described below. The Registrant offered and sold the securities
that it issued in such transactions in reliance on exemptions
from registration under Section 4(2) of the Securities Act,
and/or Regulation D promulgated thereunder, relating to
offers of securities by an issuer not involving any public
offering, or in reliance on the exemption from registration
under Rule 701 or Rule 504 of the Securities Act,
relating to offers and sales of securities pursuant to benefit
plans and contracts relating to compensation. None of these
transactions involved any underwriters, underwriting discounts
or commissions, or any public offering.
Pursuant to its 2000 Stock Option Plan, the Registrant granted
stock options to its employees and members of the board of
directors to purchase an aggregate of 8,732,345 shares of
common stock at a weighted average exercise price of $3.00 per
share in 2002, 7,138,352 shares of common stock at a
weighted average exercise price of $2.03 per share in 2003, and
6,646,580 shares of common stock at a weighted average
exercise price of $2.00 per share in 2004. As of
December 31, 2004, there are 19,496,293 options
outstanding at a weighted average exercise price of $2.12 per
share. In 2002, 2003, and 2004, an aggregate of 22,163, 10,000,
and 9,000 shares of Class A common stock,
Series 2, respectively were issued for cash upon the
exercise of stock options previously granted under the 2000
Stock Option Plan.
Pursuant to its 2003 Restricted Stock Deferral Plan for Outside
Directors, the Registrant granted awards of restricted stock
units to members of the board of directors for
15,083 shares of common stock at a weighted average
exercise price of $2.63 per share in 2003, and
12,375 shares of common stock at a weighted average
exercise price of $2.00 per share in 2004. As of
December 31, 2004, no shares of common stock have been
issued under the 2003 Restricted Stock Deferral Plan for Outside
Directors.
Pursuant to its 2004 Restricted Stock Plan, the Registrant
granted awards of restricted stock units to its senior officers
and members of the board of directors for 5,701,700 shares
of common stock at a weighted average grant date fair value of
$2.00 per share in 2004. As of December 31, 2004, no shares
of common stock have been issued under the 2004 Restricted Stock
Plan.
Item 16.
Exhibits and Financial Statement Schedules
(a) The following exhibits are filed as part of this
Registration Statement:
Exhibit
Number
Description of Document
1
.1
—
Form of Underwriting Agreement*
3
.1
—
Form of Fourth Amended and Restated Certificate of Incorporation
    of IntercontinentalExchange, Inc.*
3
.2
—
Form of Amended and Restated Bylaws of IntercontinentalExchange,
    Inc.*
4
.1
—
Form of certificate for the Common Stock of
    IntercontinentalExchange, Inc., par value $0.01 per share*
5
.1
—
Opinion of Sullivan & Cromwell LLP*
10
.1
—
Employment Agreement, dated as of September 27, 2004,
    between IntercontinentalExchange, Inc. and Jeffrey C.
    Sprecher*
10
.2
—
Employment Agreement, dated as of April 14, 2003, between
    IntercontinentalExchange, Inc. and Charles A. Vice*
10
.3
—
Employment Agreement, dated as of April 14, 2003, between
    IntercontinentalExchange, Inc. and Richard V. Spencer*
10
.4
—
Employment Agreement, dated as of May 9, 2003, between
    IntercontinentalExchange, Inc. and David S. Goone*
10
.5
—
Employment Agreement, dated as of May 9, 2003, between
    IntercontinentalExchange, Inc. and Edwin Marcial*
10
.6
—
Letter, dated as of November 19, 1999, and Statement of
    Terms and Conditions of Employment between The International
    Petroleum Exchange of London Limited and Richard Ward*
II-2
Exhibit
Number
Description of Document
10
.7
—
Employment Agreement, dated as of May 24, 2004, between
    IntercontinentalExchange, Inc. and Johnathan H. Short*
10
.8
—
IntercontinentalExchange, Inc. 2000 Stock Option Plan*
10
.9
—
IntercontinentalExchange, Inc. 2003 Restricted Stock Deferral
    Plan for Outside Directors*
10
.10
—
IntercontinentalExchange, Inc. 2004 Restricted Stock Plan*
10
.11
—
Amendment and Restatement Agreement, dated as of October 9,
    2003, between The London Clearing House Limited and
    IntercontinentalExchange, Inc.*
10
.12
—
Clearing Services Agreement, dated as of October 2003, between
    The International Petroleum Exchange of London Limited and The
    London Clearing House Limited*
10
.13
—
TRS — Application Services Agreement, dated as of
    April 21, 2001, between The International Petroleum
    Exchange of London Limited and LIFFE Services Company Limited*
10
.14
—
Credit Agreement, dated as of November 17, 2004, between
    IntercontinentalExchange, Inc. and Wachovia, National
    Association*
10
.15
—
Stock Pledge Agreement, dated as of November 17, 2004,
    between IntercontinentalExchange, Inc. and Wachovia Bank,
    National Association*
21
.1
—
Subsidiaries of IntercontinentalExchange, Inc.*
23
.1
—
Consent of Ernst & Young LLP, Independent Registered
    Public Accounting Firm
23
.3
—
Consent of Sullivan & Cromwell LLP (included in
    Exhibit 5.1)*
24
.1
—
Power of Attorney (included on signature page)
*
To be filed by amendment.
(b) Financial Statement Schedule
II-3
INTERCONTINENTALEXCHANGE, INC. AND SUBSIDIARIES
SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS
Year Ended December 31, 2004, 2003 and 2002
(in thousands)
Additions
Balance at
Charged to
Beginning
Costs and
Balance at
Description
of Year
Expenses(1)
Deductions(2)
End of Year
Year Ended December 31, 2004:
Allowance for doubtful accounts
$
123
$
140
$
(92
)
$
171
Year Ended December 31, 2003:
Allowance for doubtful accounts
$
446
$
435
$
(758
)
$
123
Year Ended December 31, 2002:
Allowance for doubtful accounts
$
465
$
379
$
(398
)
$
446
(1)
Additions charged to costs and expenses for the allowance for
    doubtful accounts are based on our historical collection
    experiences and management's assessment of the
    collectibility of specific accounts. This column also includes
    the foreign currency translation adjustments.
(2)
Deductions represent the write-off of uncollectible receivables,
    net of recoveries.
Item 17.
Undertakings
The undersigned hereby undertakes:
(a) to provide to the underwriters at the closing specified
    in the underwriting agreement, certificates in such
    denominations and registered in such names as required by the
    underwriters to permit prompt delivery to each purchaser.
(b) insofar as indemnification for liabilities arising
    under the Securities Act of 1933 may be permitted to directors,
    officers and controlling persons of the registrant pursuant to
    the provisions referenced in Item 14 of this registration
    statement, or otherwise, the registrant has been advised that in
    the opinion of the Securities and Exchange Commission such
    indemnification is against public policy as expressed in the Act
    and is, therefore, unenforceable. In the event that a claim for
    indemnification against such liabilities (other than the payment
    by the registrant of expenses incurred or paid by a director,
    officer, or controlling person of the registrant in the
    successful defense of any action, suit or proceeding) is
    asserted by such director, officer or controlling person in
    connection with the securities being registered hereunder, the
    registrant will, unless in the opinion of its counsel the matter
    has been settled by controlling precedent, submit to a court of
    appropriate jurisdiction the question of whether such
    indemnification by it is against public policy as expressed in
    the Act and will be governed by the final adjudication of such
    issue.
(c) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the
    Securities Act of 1933, the information omitted from the form of
    prospectus filed as part of this Registration Statement in
    reliance upon Rule 430A and contained in a form of
    prospectus filed by the Registrant pursuant to
    Rule 424(b)(1) or (4) or 497(h) under the Securities
    Act shall be deemed to be part of this registration statement as
    of the time it was declared effective; and
(2) For the purpose of determining any liability under the
    Securities Act of 1933, each post-effective amendment that
    contains a form of prospectus shall be deemed to be a new
    registration statement relating to the securities offered
    therein, and the offering of such securities at that time shall
    be deemed to be the initial bona fide offering thereof.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly
authorized, in Atlanta, Georgia on the 21st day of March,
2005.
INTERCONTINENTALEXCHANGE,
    INC.
By:
/s/
Jeffrey C. Sprecher
Name:        Jeffrey C.
    Sprecher
Title:
Chairman and Chief Executive Officer
The undersigned directors and officers do hereby constitute and
appoint Jeffrey C. Sprecher and Richard V. Spencer and either of
them, with full power of substitution, our true and lawful
attorneys-in-fact and agents to do any and all acts and things
in our name and behalf in our capacities as directors and
officers, and to execute any and all instruments for us and in
our names in the capacities indicated below, that such person
may deem necessary or advisable to enable the Registrant to
comply with the Securities Act of 1933 (the "Act") and
any rules, regulations and requirements of the Securities and
Exchange Commission in connection with this registration
statement, including specifically, but not limited to, power and
authority to sign for us, or any of us, in the capacities
indicated below, any and all amendments hereto (including
pre-effective and post-effective amendments or any other
registration statement filed pursuant to the provisions of
Rule 462(b) under the Act); and we do hereby ratify and
confirm all that such person or persons shall do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons
in the capacities indicated on the 21st day of March, 2005.
Signature
Title(s)
/s/
Jeffrey C. Sprecher
Jeffrey
    C. Sprecher
Chairman of the Board and Chief Executive Officer (principal
    executive officer)
/s/
Charles R. Crisp
Charles
    R. Crisp
Director
/s/
Jean-Marc Forneri
Jean-Marc
    Forneri
Director
/s/
Sir Robert Reid
Sir
    Robert Reid
Director
/s/
Frederic V. Salerno
Frederic
    V. Salerno
Director
/s/
Richard L. Sandor
Richard
    L. Sandor, Ph.D.
Director
/s/
Richard V. Spencer
Richard
    V. Spencer
Chief Financial Officer
(principal financial and accounting officer)
/s/
Judith A. Sprieser
Judith
    A. Sprieser
Director
/s/
Vincent Tese
Vincent
    Tese
Director
II-5