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.

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. 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.

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.

The Company offers trading in futures contracts and options on those contracts through its 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.

The Company’s electronic platform offers real-time access to, and transparency of, the liquidity in the OTC markets — that is the complete range of bids, offers and volumes posted on the Company’s electronic platform. The Company’s platform displays a live ticker for all contracts traded in its OTC markets and provides information relating to each trade, such as the cumulative weighted average price and transacted volumes by contract. The Company offers fast, secure and anonymous trade execution services.

The Company offers 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. In addition, the Company offers trading in a wide range of complementary niche contracts.

The Company offers a broad range of automated OTC trade execution services, including straight-through trade processing, risk management functionality and electronic trade confirmation.

The Company’s electronic trade confirmation system is accessible through its website or through its APIs and offers market participants a reliable, low-cost automated alternative to manual trade verification and confirmation. Both participants and third parties may use this service to confirm trades in products commonly traded in the energy and metals markets. The Company’s electronic trade confirmation service accepts data from trades executed on its platform, through other exchanges or trading facilities or through OTC voice brokers.

Revenues grew by $14.7 million, or 15.6%, to $108.4 million for the year ended December 31, 2004 from $93.7 million for the year ended December 31, 2003.

Operating expenses increased slightly to $76.0 million for the year ended December 31, 2004 from $74.8 million for the year ended December 31, 2003.

Selling, general and administrative expenses increased $722,000, or 5.8%, to $13.1 million for the year ended December 31, 2004 from $12.4 million for the year ended December 31, 2003.

Other income increased $380,000, or 40.0%, to $1.3 million for the year ended December 31, 2004 from $949,000 for the year ended December 31, 2003.