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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 10-Q



|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

For the Quarterly Period Ended June 30, 2008



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

For the Transition Period from                      to





Commission File Number
001-33149

NYMEX Holdings, Inc.



|                         |  |                                        
|------------------------ |  | ---------------------------------------
|Delaware                 |  | 13-4098266                             
|(State of Incorporation) |  | (I.R.S. Employer Identification Number)

One North End Avenue

World Financial Center

New York, New York 10282-1101

(212) 299-2000





Indicate by check mark whether
the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No   ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.
See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.



|                           |  |                      |  |                          |  |                             
|-------------------------- |  | -------------------- |  | ------------------------ |  | ----------------------------
|Large accelerated filer  x |  | Accelerated filer   ̈ |  | Non-accelerated filer   ̈ |  | Smaller reporting company   ̈

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act).    Yes   ̈    No  x

Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date.

A total of 94,790,125 shares of the registrants $0.01 par value common stock were outstanding at August 7, 2008.









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##### Table of Contents

TABLE OF CONTENTS

PART I: FINANCIAL INFORMATION



|                           |  |                                                                                                                                                       |  |     
|-------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----
|                           |  |                                                                                                                                                       |  | Page
|Item 1.                    |  | Financial Statements                                                                                                                                  |  |     
|                           |  |                                                                                                                                                      
|                           |  | Condensed Consolidated Statements of Income for the three and six months ended June 
30, 2008 and 2007 (Unaudited)                                    |  | 1   
|                           |  |                                                                                                                                                      
|                           |  | Condensed Consolidated Balance Sheets as of June 30, 2008 (Unaudited) and December 31, 2007                                                           |  | 2   
|                           |  |                                                                                                                                                      
|                           |  | Condensed Consolidated Statements of Stockholders Equity for the six months ended June 30, 2008 (Unaudited) and for
the year ended December 31, 2007 |  | 3   
|                           |  |                                                                                                                                                      
|                           |  | Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2008 and 2007
(Unaudited)                                           |  | 4   
|                           |  |                                                                                                                                                      
|                           |  | Notes to the Unaudited Condensed Consolidated Financial Statements                                                                                    |  | 5   
|                           |  |                                                                                                                                                      
|Item 2.                    |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                                                 |  | 30  
|                           |  |                                                                                                                                                      
|Item 3.                    |  | Quantitative and Qualitative Disclosures about Market Risk                                                                                            |  | 48  
|                           |  |                                                                                                                                                      
|Item 4.                    |  | Controls and Procedures                                                                                                                               |  | 50  
|                           | 
|PART II: OTHER INFORMATION |  |                                                                                                                                                      
|                           |  |                                                                                                                                                      
|Item 1.                    |  | Legal Proceedings                                                                                                                                     |  | 51  
|                           |  |                                                                                                                                                      
|Item 1A.                   |  | Risk Factors                                                                                                                                          |  | 51  
|                           |  |                                                                                                                                                      
|Item 2.                    |  | Unregistered Sales of Equity Securities and Use of Proceeds                                                                                           |  | 53  
|                           |  |                                                                                                                                                      
|Item 3.                    |  | Defaults upon Senior Securities                                                                                                                       |  | 53  
|                           |  |                                                                                                                                                      
|Item 4.                    |  | Submission of Matters to a Vote of Security Holders                                                                                                   |  | 53  
|                           |  |                                                                                                                                                      
|Item 5.                    |  | Other Information                                                                                                                                     |  | 54  
|                           |  |                                                                                                                                                      
|Item 6.                    |  | Exhibits                                                                                                                                              |  | 54  
|                           |  |                                                                                                                                                      
|                           |  | Signatures                                                                                                                                            |  | 55  



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##### Table of Contents

PART I: FINANCIAL INFORMATION



|Item 1. | Financial Statements
|------- | --------------------

NYMEX HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(in thousands, except for share data)



|                                                                   |  |                            |            |   |                          |   |            |      |  |   |            |   |  |   |            |  
|------------------------------------------------------------------ |  | -------------------------- | ---------- | - | ------------------------ | - | ---------- | ---- |  | - | ---------- | - |  | - | ---------- | -
|                                                                   |  | Three Months EndedJune 30, |            |   | Six Months EndedJune 30, |  
|                                                                   |  | 2008                       |            |   | 2007                     |   |            | 2008 |  |   | 2007       |  
|Operating Revenues                                                 |  |                            |            |   |                          |   |            |      |  |   |            |   |  |   |            |  
|Clearing and transaction fees                                      |  | $                          | 180,400    |   |                          | $ | 137,390    |      |  | $ | 359,451    |   |  | $ | 275,567    |  
|Market data fees                                                   |  |                            | 26,913     |   |                          |   | 23,363     |      |  |   | 53,126     |   |  |   | 46,500     |  
|Other                                                              |  |                            | 3,495      |   |                          |   | 2,844      |      |  |   | 7,106      |   |  |   | 5,756      |  
|                                                                   |  |                            |            |   |                          |   |            |      |  |   |            |   |  |   |            |  
|Total operating revenues                                           |  |                            | 210,808    |   |                          |   | 163,597    |      |  |   | 419,683    |   |  |   | 327,823    |  
|                                                                   |  |                            |            |   |                          |   |            |      |  |   |            |   |  |   |            |  
|Operating Expenses                                                 |  |                            |            |   |                          |   |            |      |  |   |            |   |  |   |            |  
|Direct transaction costs                                           |  |                            | 26,886     |   |                          |   | 24,318     |      |  |   | 54,969     |   |  |   | 48,420     |  
|Salaries and employee benefits                                     |  |                            | 19,887     |   |                          |   | 20,482     |      |  |   | 39,863     |   |  |   | 41,520     |  
|Occupancy and equipment                                            |  |                            | 5,893      |   |                          |   | 5,604      |      |  |   | 11,653     |   |  |   | 11,547     |  
|Depreciation and amortization, net of deferred credit amortization |  |                            | 3,571      |   |                          |   | 3,614      |      |  |   | 7,029      |   |  |   | 7,145      |  
|General and administrative                                         |  |                            | 4,583      |   |                          |   | 4,945      |      |  |   | 9,204      |   |  |   | 9,642      |  
|Professional services                                              |  |                            | 5,079      |   |                          |   | 3,922      |      |  |   | 8,205      |   |  |   | 8,108      |  
|Telecommunications                                                 |  |                            | 1,428      |   |                          |   | 1,417      |      |  |   | 2,678      |   |  |   | 2,840      |  
|Marketing                                                          |  |                            | 2,013      |   |                          |   | 1,626      |      |  |   | 3,363      |   |  |   | 3,559      |  
|Other expenses                                                     |  |                            | 2,124      |   |                          |   | 182        |      |  |   | 10,487     |   |  |   | 1,843      |  
|                                                                   |  |                            |            |   |                          |   |            |      |  |   |            |   |  |   |            |  
|Total operating expenses                                           |  |                            | 71,464     |   |                          |   | 66,110     |      |  |   | 147,451    |   |  |   | 134,624    |  
|                                                                   |  |                            |            |   |                          |   |            |      |  |   |            |   |  |   |            |  
|Operating income                                                   |  |                            | 139,344    |   |                          |   | 97,487     |      |  |   | 272,232    |   |  |   | 193,199    |  
|                                                                   |  |                            |            |  
|Non-Operating Income and Expenses                                  |  |                            |            |   |                          |   |            |      |  |   |            |   |  |   |            |  
|Investment income, net                                             |  |                            | 3,222      |   |                          |   | 6,133      |      |  |   | 6,836      |   |  |   | 12,840     |  
|Interest income from securities lending                            |  |                            | 4,829      |   |                          |   | 31,087     |      |  |   | 12,597     |   |  |   | 60,493     |  
|Interest expense/fees from securities lending                      |  |                            | (4,233     | ) |                          |   | (30,136    | )    |  |   | (10,281    | ) |  |   | (59,025    | )
|Interest expense                                                   |  |                            | (1,587     | ) |                          |   | (1,612     | )    |  |   | (3,173     | ) |  |   | (3,224     | )
|Gain (losses) from unconsolidated investments                      |  |                            | 28,616     |   |                          |   | (28,944    | )    |  |   | 26,406     |   |  |   | (30,587    | )
|                                                                   |  |                            |            |   |                          |   |            |      |  |   |            |   |  |   |            |  
|Total non-operating income and expenses                            |  |                            | 30,847     |   |                          |   | (23,472    | )    |  |   | 32,385     |   |  |   | (19,503    | )
|                                                                   |  |                            |            |   |                          |   |            |      |  |   |            |   |  |   |            |  
|Income before provision for income taxes                           |  |                            | 170,191    |   |                          |   | 74,015     |      |  |   | 304,617    |   |  |   | 173,696    |  
|Provision for income taxes                                         |  |                            | 75,879     |   |                          |   | 32,270     |      |  |   | 139,120    |   |  |   | 75,731     |  
|                                                                   |  |                            |            |   |                          |   |            |      |  |   |            |   |  |   |            |  
|Net income                                                         |  | $                          | 94,312     |   |                          | $ | 41,745     |      |  | $ | 165,497    |   |  | $ | 97,965     |  
|                                                                   |  |                            |            |   |                          |   |            |      |  |   |            |   |  |   |            |  
|Earnings per Share                                                 |  |                            |            |   |                          |   |            |      |  |   |            |   |  |   |            |  
|Basic                                                              |  | $                          | 0.99       |   |                          | $ | 0.44       |      |  | $ | 1.75       |   |  | $ | 1.04       |  
|                                                                   |  |                            |            |   |                          |   |            |      |  |   |            |   |  |   |            |  
|Diluted                                                            |  | $                          | 0.99       |   |                          | $ | 0.44       |      |  | $ | 1.74       |   |  | $ | 1.03       |  
|                                                                   |  |                            |            |   |                          |   |            |      |  |   |            |   |  |   |            |  
|Weighted Average Number of Common Shares Outstanding               |  |                            |            |   |                          |   |            |      |  |   |            |   |  |   |            |  
|Basic                                                              |  |                            | 94,791,000 |   |                          |   | 94,450,000 |      |  |   | 94,786,000 |   |  |   | 94,450,000 |  
|                                                                   |  |                            |            |   |                          |   |            |      |  |   |            |   |  |   |            |  
|Diluted                                                            |  |                            | 94,947,000 |   |                          |   | 94,798,000 |      |  |   | 94,981,000 |   |  |   | 94,784,000 |  
|                                                                   |  |                            |            |   |                          |   |            |      |  |   |            |   |  |   |            |  

See accompanying notes to the unaudited condensed consolidated financial statements.



1



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##### Table of Contents

NYMEX HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except for share data)



|                                                                                                                                                                                                                                                                        |  |              |           |   |                  |   |          
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | --------- | - | ---------------- | - | ---------
|                                                                                                                                                                                                                                                                        |  | June 30,2008 |           |   | December 31,2007
|                                                                                                                                                                                                                                                                        |  | (Unaudited)  |           |   |                 
|Assets                                                                                                                                                                                                                                                                  |  |              |           |   |                  |   |          
|Cash and cash equivalents                                                                                                                                                                                                                                               |  | $            | 2,411     |   |                  | $ | 3,296    
|Collateral from securities lending program                                                                                                                                                                                                                              |  |              | 558,367   |   |                  |   | 842,444  
|Marketable securities, at fair value                                                                                                                                                                                                                                    |  |              | 633,202   |   |                  |   | 461,142  
|Clearing and transaction fees receivable, net of allowance for member credits                                                                                                                                                                                           |  |              | 63,119    |   |                  |   | 38,443   
|Prepaid expenses                                                                                                                                                                                                                                                        |  |              | 8,962     |   |                  |   | 8,786    
|Margin deposits and guaranty funds                                                                                                                                                                                                                                      |  |              | 70,516    |   |                  |   | 170,192  
|Other current assets                                                                                                                                                                                                                                                    |  |              | 33,124    |   |                  |   | 34,097   
|                                                                                                                                                                                                                                                                        |  |              |           |   |                  |   |          
|Total current assets                                                                                                                                                                                                                                                    |  |              | 1,369,701 |   |                  |   | 1,558,400
|Property and equipment, net                                                                                                                                                                                                                                             |  |              | 173,707   |   |                  |   | 176,471  
|Goodwill and indefinite-lived intangible asset                                                                                                                                                                                                                          |  |              | 307,125   |   |                  |   | 307,125  
|Long-term investments                                                                                                                                                                                                                                                   |  |              | 117,414   |   |                  |   | 178,036  
|Other assets                                                                                                                                                                                                                                                            |  |              | 7,115     |   |                  |   | 7,121    
|                                                                                                                                                                                                                                                                        |  |              |           |   |                  |   |          
|Total assets                                                                                                                                                                                                                                                            |  | $            | 1,975,062 |   |                  | $ | 2,227,153
|                                                                                                                                                                                                                                                                        |  |              |           |   |                  |   |          
|Liabilities and Stockholders Equity                                                                                                                                                                                                                                    |  |              |           |   |                  |   |          
|Accounts payable and accrued liabilities                                                                                                                                                                                                                                |  | $            | 18,188    |   |                  | $ | 15,723   
|Accrued salaries and related liabilities                                                                                                                                                                                                                                |  |              | 13,155    |   |                  |   | 17,107   
|Payable under securities lending program                                                                                                                                                                                                                                |  |              | 571,009   |   |                  |   | 847,581  
|Margin deposits and guaranty funds                                                                                                                                                                                                                                      |  |              | 70,516    |   |                  |   | 170,192  
|Income tax payable                                                                                                                                                                                                                                                      |  |              | 7,217     |   |                  |   | 2,704    
|Other current liabilities                                                                                                                                                                                                                                               |  |              | 38,337    |   |                  |   | 31,122   
|                                                                                                                                                                                                                                                                        |  |              |           |   |                  |   |          
|Total current liabilities                                                                                                                                                                                                                                               |  |              | 718,422   |   |                  |   | 1,084,429
|Grant for building construction deferred credit                                                                                                                                                                                                                         |  |              | 102,949   |   |                  |   | 104,021  
|Long-term debt                                                                                                                                                                                                                                                          |  |              | 77,464    |   |                  |   | 77,464   
|Members retirement obligation                                                                                                                                                                                                                                          |  |              | 11,884    |   |                  |   | 12,038   
|Other liabilities                                                                                                                                                                                                                                                       |  |              | 21,636    |   |                  |   | 23,646   
|                                                                                                                                                                                                                                                                        |  |              |           |   |                  |   |          
|Total liabilities                                                                                                                                                                                                                                                       |  |              | 932,355   |   |                  |   | 1,301,598
|                                                                                                                                                                                                                                                                        |  |              |           |   |                  |   |          
|Commitments and contingencies                                                                                                                                                                                                                                           |  |              |           |   |                  |   |          
|                                                                                                                                                                                                                                                                        |  |             
|Stockholders equity                                                                                                                                                                                                                                                    |  |              |           |   |                  |   |          
|Common stock, $0.01 par value; 181,909,600 shares authorized, 94,799,009 and 94,769,342 shares issued as of June 30, 2008 and
December 31, 2007, respectively; and 94,788,250 and 93,972,289 shares outstanding as of June 30, 2008 and December 31, 2007, respectively |  |              | 948       |   |                  |   | 948      
|Additional paid-in capital                                                                                                                                                                                                                                              |  |              | 837,537   |   |                  |   | 828,227  
|Retained earnings                                                                                                                                                                                                                                                       |  |              | 220,390   |   |                  |   | 73,851   
|Accumulated other comprehensive (loss) income, net of tax                                                                                                                                                                                                               |  |              | (16,168   | ) |                  |   | 22,529   
|                                                                                                                                                                                                                                                                        |  |              |           |   |                  |   |          
|Total stockholders equity                                                                                                                                                                                                                                              |  |              | 1,042,707 |   |                  |   | 925,555  
|                                                                                                                                                                                                                                                                        |  |              |           |   |                  |   |          
|Total liabilities and stockholders equity                                                                                                                                                                                                                              |  | $            | 1,975,062 |   |                  | $ | 2,227,153
|                                                                                                                                                                                                                                                                        |  |              |           |   |                  |   |          

See accompanying notes to the unaudited condensed consolidated financial
statements.



2



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##### Table of Contents

NYMEX HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY

(in thousands, except for share data)



|                                                                                                  |        |              |        |                          |     |  |                           |         |   |                                            |   |          |                          |  |   |         |   |  |   |           |  
|------------------------------------------------------------------------------------------------- | ------ | ------------ | ------ | ------------------------ | --- |  | ------------------------- | ------- | - | ------------------------------------------ | - | -------- | ------------------------ |  | - | ------- | - |  | - | --------- | -
|                                                                                                  |        | Common Stock |        | AdditionalPaid-inCapital |     |  | RetainedEarnings(Deficit) |         |   | AccumulatedOtherComprehensiveIncome (Loss) |   |          | TotalStockholdersEquity | 
|                                                                                                  | Shares |              | Amount |                          |     |  |                          
|Balances at January 1, 2007                                                                       |        | 94,449,800   |        | $                        | 944 |  | $                         | 796,585 |   |                                            | $ | (21,823  | )                        |  | $ | (784    | ) |  | $ | 774,922   |  
|Comprehensive income:                                                                             |        |              |        |                          |     |  |                           |         |   |                                            |   |          |                          |  |   |         |   |  |   |           |  
|Net income                                                                                        |        |             |        |                          |    |  |                           |        |   |                                            |   | 224,039  |                          |  |   |        |   |  |   | 224,039   |  
|Foreign currencies translations                                                                   |        |             |        |                          |    |  |                           |        |   |                                            |   |         |                          |  |   | 385     |   |  |   | 385       |  
|Postretirement benefits, net of deferred income tax of $548                                       |        |              |        |                          |     |  |                           |         |   |                                            |   |          |                          |  |   | 773     |   |  |   | 773       |  
|Unrealized gain on available-for-sale securities, net of deferred income taxes of $12,188         |        |             |        |                          |    |  |                           |        |   |                                            |   |         |                          |  |   | 22,155  |   |  |   | 22,155    |  
|                                                                                                  |        |              |        |                          |     |  |                           |         |   |                                            |   |          |                          |  |   |         |   |  |   |           |  
|Total comprehensive income                                                                        |        |              |        |                          |     |  |                           |         |   |                                            |   |          |                          |  |   |         |   |  |   | 247,352   |  
|                                                                                                  |        |              |        |                          |     | 
|Dividends declared:                                                                               |        |              |        |                          |     |  |                           |         |   |                                            |   |          |                          |  |   |         |   |  |   |           |  
|Common stock, $0.10/share on April 30, 2007                                                       |        |             |        |                          |    |  |                           |        |   |                                            |   | (9,445   | )                        |  |   |        |   |  |   | (9,445    | )
|Common stock, $0.10/share on August 1, 2007                                                       |        |             |        |                          |    |  |                           |        |   |                                            |   | (9,445   | )                        |  |   |        |   |  |   | (9,445    | )
|Common stock, $0.10/share on September 30, 2007                                                   |        |             |        |                          |    |  |                           |        |   |                                            |   | (9,475   | )                        |  |   |        |   |  |   | (9,475    | )
|Common stock, $1.06/share on September 30, 2007                                                   |        |             |        |                          |    |  |                           |        |   |                                            |   | (100,000 | )                        |  |   |        |   |  |   | (100,000  | )
|Share-based compensation amortization                                                             |        |             |        |                          |    |  |                           | 10,109  |   |                                            |   |         |                          |  |   |        |   |  |   | 10,109    |  
|Direct costs of initial public offering                                                           |        |             |        |                          |    |  |                           | (346    | ) |                                            |   |         |                          |  |   |        |   |  |   | (346      | )
|Exercise of employee stock options                                                                |        | 265,150      |        |                          | 3   |  |                           | 15,641  |   |                                            |   |         |                          |  |   |        |   |  |   | 15,644    |  
|Issuance of restricted stock and stock units                                                      |        | 54,392       |        |                          | 1   |  |                           |        |   |                                            |   |         |                          |  |   |        |   |  |   | 1         |  
|Excess net tax benefit related to share-based compensation                                        |        |             |        |                          |    |  |                           | 6,238   |   |                                            |   |         |                          |  |   |        |   |  |   | 6,238     |  
|                                                                                                  |        |              |        |                          |     |  |                           |         |   |                                            |   |          |                          |  |   |         |   |  |   |           |  
|Balances at December 31, 2007                                                                     |        | 94,769,342   |        | $                        | 948 |  | $                         | 828,227 |   |                                            | $ | 73,851   |                          |  | $ | 22,529  |   |  | $ | 925,555   |  
|                                                                                                  |        |              |        |                          |     |  |                           |         |   |                                            |   |          |                          |  |   |         |   |  |   |           |  
|Comprehensive income:                                                                             |        |              |        |                          |     |  |                           |         |   |                                            |   |          |                          |  |   |         |   |  |   |           |  
|Net income                                                                                        |        |             |        |                          |    |  |                           |        |   |                                            |   | 165,497  |                          |  |   |        |   |  |   | 165,497   |  
|Foreign currencies translations, net of deferred income taxes of $87                              |        |             |        |                          |    |  |                           |        |   |                                            |   |         |                          |  |   | (283    | ) |  |   | (283      | )
|Postretirement benefits, net of deferred income taxes of $49                                      |        |             |        |                          |    |  |                           |        |   |                                            |   |         |                          |  |   | 84      |   |  |   | 84        |  
|Realization of net gain on available-for-sale securities, net of deferred income taxes of $15,427 |        |             |        |                          |    |  |                           |        |   |                                            |   |         |                          |  |   | (26,839 | ) |  |   | (26,839   | )
|Unrealized loss on available-for-sale securities, net of deferred income taxes of $6,155          |        |             |        |                          |    |  |                           |        |   |                                            |   |         |                          |  |   | (11,659 | ) |  |   | (11,659   | )
|                                                                                                  |        |              |        |                          |     |  |                           |         |   |                                            |   |          |                          |  |   |         |   |  |   |           |  
|Total comprehensive income                                                                        |        |              |        |                          |     |  |                           |         |   |                                            |   |          |                          |  |   |         |   |  |   | 126,800   |  
|                                                                                                  |        |              |        |                          |     | 
|Dividends declared:                                                                               |        |              |        |                          |     |  |                           |         |   |                                            |   |          |                          |  |   |         |   |  |   |           |  
|Common stock, $0.10/share on February 1, 2008                                                     |        |             |        |                          |    |  |                           |        |   |                                            |   | (9,478   | )                        |  |   |        |   |  |   | (9,478    | )
|Common stock, $0.10/share on May 1, 2008                                                          |        |             |        |                          |    |  |                           |        |   |                                            |   | (9,480   | )                        |  |   |        |   |  |   | (9,480    | )
|Share-based compensation amortization                                                             |        |             |        |                          |    |  |                           | 7,746   |   |                                            |   |         |                          |  |   |        |   |  |   | 7,746     |  
|Exercise of employee stock options                                                                |        | 23,500       |        |                          |    |  |                           | 1,387   |   |                                            |   |         |                          |  |   |        |   |  |   | 1,387     |  
|Issuance of restricted stock and stock units                                                      |        | 6,167        |        |                          |    |  |                           |        |   |                                            |   |         |                          |  |   |        |   |  |   |          |  
|Excess net tax benefit related to share-based compensation                                        |        |             |        |                          |    |  |                           | 177     |   |                                            |   |         |                          |  |   |        |   |  |   | 177       |  
|                                                                                                  |        |              |        |                          |     |  |                           |         |   |                                            |   |          |                          |  |   |         |   |  |   |           |  
|Balances at June 30, 2008 (Unaudited)                                                             |        | 94,799,009   |        | $                        | 948 |  | $                         | 837,537 |   |                                            | $ | 220,390  |                          |  | $ | (16,168 | ) |  | $ | 1,042,707 |  
|                                                                                                  |        |              |        |                          |     |  |                           |         |   |                                            |   |          |                          |  |   |         |   |  |   |           |  

See accompanying notes to the unaudited condensed consolidated financial
statements.



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NYMEX HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(in thousands)



|                                                                                  |  |                          |            |   |      |   |             |  
|--------------------------------------------------------------------------------- |  | ------------------------ | ---------- | - | ---- | - | ----------- | -
|                                                                                  |  | Six Months EndedJune 30, |           
|                                                                                  |  | 2008                     |            |   | 2007 |  
|Cash flows from operating activities                                              |  |                          |            |   |      |   |             |  
|Net income                                                                        |  | $                        | 165,497    |   |      | $ | 97,965      |  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                          |            |   |      |   |             |  
|Depreciation and amortization                                                     |  |                          | 8,101      |   |      |   | 8,218       |  
|Deferred grant credits                                                            |  |                          | (1,323     | ) |      |   | (1,323      | )
|Deferred rental income                                                            |  |                          | (338       | ) |      |   | (338        | )
|Deferred rent expense                                                             |  |                          | (95        | ) |      |   | (95         | )
|Deferred income taxes                                                             |  |                          | 4,021      |   |      |   | (13,468     | )
|Excess tax benefit associated with exercise of stock options                      |  |                          | (177       | ) |      |   |            |  
|Allowance for doubtful accounts and credits                                       |  |                          | 158        |   |      |   | 328         |  
|Share-based compensation                                                          |  |                          | 7,746      |   |      |   | 4,929       |  
|Gain on available-for-sale security                                               |  |                          | (33,869    | ) |      |   |            |  
|Other, net                                                                        |  |                          | 4,363      |   |      |   | 3,710       |  
|Asset impairment and disposition losses                                           |  |                          | 3,247      |   |      |   | 25,996      |  
|Decrease (increase) in operating assets:                                          |  |                          |            |   |      |   |             |  
|Marketable securities                                                             |  |                          | (172,091   | ) |      |   | 29,841      |  
|Clearing and transaction fees receivable                                          |  |                          | (24,676    | ) |      |   | (14,927     | )
|Prepaid expenses                                                                  |  |                          | (176       | ) |      |   | (225        | )
|Margin deposits and guaranty fund assets                                          |  |                          | 99,676     |   |      |   | 8,634       |  
|Other current assets                                                              |  |                          | 5,623      |   |      |   | (7,176      | )
|Increase (decrease) in operating liabilities:                                     |  |                          |            |   |      |   |             |  
|Accounts payable and accrued liabilities                                          |  |                          | 2,465      |   |      |   | 1,816       |  
|Accrued salaries and related liabilities                                          |  |                          | (3,952     | ) |      |   | (1,125      | )
|Margin deposits and guaranty fund liabilities                                     |  |                          | (99,676    | ) |      |   | (8,634      | )
|Income tax payable                                                                |  |                          | 14,089     |   |      |   | 2,602       |  
|Other current liabilities                                                         |  |                          | 8,283      |   |      |   | (2,325      | )
|Other liabilities                                                                 |  |                          | (455       | ) |      |   | 437         |  
|Members retirement obligation                                                    |  |                          | (154       | ) |      |   | (401        | )
|                                                                                  |  |                          |            |   |      |   |             |  
|Net cash (used in) provided by operating activities                               |  |                          | (13,713    | ) |      |   | 134,439     |  
|                                                                                  |  |                          |            |   |      |   |             |  
|Cash flows from investing activities                                              |  |                          |            |   |      |   |             |  
|Maturities and sales of securities lending program investments                    |  |                          | 2,129,607  |   |      |   | 54,514,793  |  
|Purchases of securities lending program investments                               |  |                          | (1,853,035 | ) |      |   | (54,298,988 | )
|Purchase of long-term investments                                                 |  |                          | (12,659    | ) |      |   | (109,139    | )
|Proceeds of available-for-sale security                                           |  |                          | 49,299     |   |      |   |            |  
|Loan to unconsolidated entity                                                     |  |                          |           |   |      |   | (13,700     | )
|Capital expenditures                                                              |  |                          | (5,356     | ) |      |   | (3,591      | )
|Decrease in other assets                                                          |  |                          | 6          |   |      |   | 105         |  
|                                                                                  |  |                          |            |   |      |   |             |  
|Net cash provided by investing activities                                         |  |                          | 307,862    |   |      |   | 89,480      |  
|                                                                                  |  |                          |            |   |      |   |             |  
|Cash flows from financing activities                                              |  |                          |            |   |      |   |             |  
|Direct costs of initial public offering                                           |  |                          |           |   |      |   | (346        | )
|Proceeds from issuance of capital stock under employee stock plan                 |  |                          | 1,387      |   |      |   |            |  
|Excess tax benefit associated with exercise of stock options                      |  |                          | 177        |   |      |   |            |  
|Decrease in obligation to return collateral under securities lending program      |  |                          | (276,572   | ) |      |   | (215,805    | )
|Dividends paid                                                                    |  |                          | (20,026    | ) |      |   | (9,287      | )
|                                                                                  |  |                          |            |   |      |   |             |  
|Net cash used in financing activities                                             |  |                          | (295,034   | ) |      |   | (225,438    | )
|                                                                                  |  |                          |            |   |      |   |             |  
|Net decrease in cash and cash equivalents                                         |  |                          | (885       | ) |      |   | (1,519      | )
|Cash and cash equivalents, beginning of period                                    |  |                          | 3,296      |   |      |   | 18,631      |  
|                                                                                  |  |                          |            |   |      |   |             |  
|Cash and cash equivalents, end of period                                          |  | $                        | 2,411      |   |      | $ | 17,112      |  
|                                                                                  |  |                          |            |   |      |   |             |  

See accompanying notes to the unaudited condensed consolidated financial
statements.



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##### Table of Contents

NYMEX HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.    Basis of Presentation and Summary of Significant Accounting Policies

Nature of
Business

NYMEX Holdings, Inc. (NYMEX Holdings) was incorporated in 2000 as a stock corporation in Delaware, and is the
successor to the New York Mercantile Exchange. On November 22, 2006, NYMEX Holdings completed an initial public offering (IPO) of its common stock which is listed on the New York Stock Exchange under the symbol NMX. The
two principal operating subsidiaries of NYMEX Holdings are New York Mercantile Exchange, Inc. (NYMEX Exchange or NYMEX Division) and Commodity Exchange, Inc. (COMEX or COMEX Division), which is a
wholly-owned subsidiary of NYMEX Exchange. Where appropriate, each division will be discussed separately, and collectively will be referred to as the Exchange. NYMEX Holdings and its subsidiaries are collectively referred to as the
Company.

The Company exists principally to provide facilities to buy, sell and clear energy, precious and base metals, and
soft commodities for future delivery under rules intended to protect the interests of market participants. The Company itself does not own commodities, trade for its own account, or otherwise engage in market activities. The Company provides the
physical facilities necessary to conduct an open outcry auction market, electronic trading systems, systems for the matching and clearing of trades executed on the Exchange, and systems for the clearing of certain bilateral trades executed
off-exchange in the over-the-counter (OTC) market. These services facilitate price discovery, hedging and liquidity in the energy and metals markets. The liquidity that the Exchange and other centralized markets offer is achieved in
large part because the traded contracts have standardized terms and the Companys clearinghouse mitigates counterparty performance risk. Transactions executed on the Exchange mitigate the risk of counter-party default because the Companys
clearinghouse acts as the counter party to every trade. To manage the risk of financial nonperformance, the Exchange requires members to post margin. Trading on the Exchange is regulated by the Commodity Futures Trading Commission.

Merger Agreement

The Company, CME Group Inc.
(CME Group), CMEG NY Inc., a wholly-owned subsidiary of CME Group, and NYMEX Exchange are parties to an Agreement and Plan of Merger, dated as of March 17, 2008 (the Merger Agreement) and amended as of June 30,
2008, July 18, 2008 and August 7, 2008, pursuant to which the Company would merge with and into CMEG NY Inc. with CMEG NY Inc. continuing as the surviving company and as a wholly-owned subsidiary of CME Group. If the merger is completed, the
Companys stockholders will receive for each issued and outstanding share of NYMEX Holdings common stock they own, at the election of each NYMEX Holdings stockholder, consideration in the form of CME Group Class A common stock or cash,
subject to proration if too few or too many stockholders elect to receive cash. The cash consideration per share of NYMEX Holdings common stock for which a valid cash election has been made will be equal to the sum of (a) $36.00 plus
(b) the product of (1) 0.1323 and (2) the average closing sale price of CME Group Class A common stock on the Nasdaq Global Select Market, or the Nasdaq, for the period of ten consecutive trading days ending on the
second full trading day prior to the effective time of the merger, referred to as the Average CME Group Share Price. The stock consideration per share of the Companys common stock for which a valid stock election has been made will
be the number of shares of CME Group Class A common stock equal to the cash consideration per share divided by the Average CME Group Share Price. If the merger is consummated, each owner of a NYMEX Class A membership as of the effective
time of the merger who executes and delivers a waiver and release within 60 days after consummation of the merger will receive $750,000 per NYMEX Class A membership such member owns of record. Under certain circumstances, if the Merger
Agreement is terminated, the Company or CME Group may be required to pay the other party a termination fee and other merger-related expenses. The merger is subject to a number of closing conditions, including, but not limited to, (i) adoption
of the Merger Agreement by the stockholders of the Company, (ii) approval by the stockholders of CME Group of



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NYMEX HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)



(A) the amended and restated CME Group certificate of incorporation and (B) the issuance of shares of CME Group Class A common stock in
connection with the merger, (iii) approval by owners of 75% of the outstanding NYMEX Class A memberships of changes to the certificate of incorporation and bylaws of NYMEX Exchange which eliminate substantially all of the NYMEX
Class A members existing rights and replace them with certain new post-closing trading rights and privileges, (iv) effectiveness of a Form S-4 registration statement to be filed by CME Group, (v) receipt of certain regulatory
approvals and (vi) receipt of an opinion that the merger will be treated as a tax-free reorganization. The terms of certain contracts, employee benefit arrangements and debt agreements have provisions which could result in changes to the terms
or settlement amounts upon a change in control of the Company. On June 16, 2008, CME Group and the Company received a notice of early termination of the HSR Act waiting period from the U.S. Department of Justice and the U.S. Federal Trade
Commission, satisfying the condition to the Merger Agreement with respect to receipt of certain regulatory approvals.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of NYMEX Holdings and its wholly-owned
subsidiaries and have been prepared in accordance with U.S. generally accepted accounting principles (GAAP). All significant intercompany transactions and balances are eliminated in consolidation. The Company consolidates subsidiaries in
which it holds, directly or indirectly, more than 50% of the voting rights or where it exercises control. The Company follows the equity method of accounting for joint ventures and investments in associated companies in which it holds between 20%
and 50% of the voting rights and/or has significant influence. The Companys equity in the net income and losses of these investments is reported in losses from unconsolidated investments in the accompanying consolidated statements of income.
The Company also evaluates its investments in all entities under Financial Accounting Standards Board (FASB) Interpretation No. 46R, Consolidation of Variable Interest Entities an interpretation of ARB No. 51
(FIN No. 46R) to determine if it has primary beneficial interests in any entities deemed to be variable interest entities (VIEs). As of June 30, 2008, the Company was not a beneficiary in a VIE. The
accompanying unaudited condensed consolidated financial statements reflect all adjustments which are, in the opinion of the Companys management, necessary for a fair statement of the results for the periods presented.

Certain changes have been made to the condensed consolidated financial statements for the three and six months ended June 30, 2007 to conform to the
current presentation. Beginning December 31, 2007, the Company revised its classification of the net change in its marketable securities portfolio as an operating activity in the consolidated statements of cash flows, in accordance with
Statement of Financial Accounting Standards (SFAS) No. 102, Statement of Cash FlowsExemption of Certain Enterprises and Classification of Cash flows from Certain Securities Acquired for Resalean amendment of FASB
Statement No. 95. Previously, the net change in marketable securities was classified as an investing activity. In addition, the Company has also reclassified interest receivables from marketable securities to other current assets in the
condensed consolidated balance sheets as of December 31, 2007 to conform to the current presentation.

Pursuant to the rules and
regulations of the United States Securities and Exchange Commission (SEC), certain information and disclosures normally included in the notes to the annual financial statements have been omitted from these interim financial statements.
The Company suggests that these financial statements be read in conjunction with the audited financial statements and the notes included in the Companys most recent Annual Report on Form 10-K and any Current Reports on Form 8-K.

Significant Accounting Policies

The
Companys significant accounting policies are described in the notes to the December 31, 2007 audited consolidated financial statements included in its Annual Report on Form 10-K.



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NYMEX HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)



Recent Accounting Pronouncements

Effective January 1, 2008, the Company adopted SFAS No. 157, Fair Value Measurements (SFAS No. 157), which defines fair
value, establishes a framework for measuring fair value in accordance with GAAP, and expands disclosures about fair value measurements. SFAS No. 157 establishes a fair value hierarchy that distinguishes between independent observable
inputs and unobservable inputs based on the best information available. SFAS No. 157 expands disclosures about the use of fair value to measure assets and liabilities, the effect of these measurements on earnings for the period, and the
inputs used to measure fair value. In February 2008, the FASB issued Staff Position (FSP) FAS 157-1 to exclude SFAS No. 13, Accounting for Leases, and its related interpretive accounting pronouncements that address
leasing transactions, from the scope of SFAS No. 157. In February 2008, the FASB also issued FSP FAS 157-2 to allow entities to electively defer the effective date of SFAS No. 157 for nonfinancial assets and liabilities, except
for those items recognized or disclosed at fair value on an annual or more frequently recurring basis, until January 1, 2009. The Company will apply the fair value measurement provisions of SFAS No. 157 to its nonfinancial assets and
liabilities effective January 1, 2009. The adoption of SFAS No. 157 had no impact on retained earnings and resulted in expanded disclosures about the Companys financial instruments measured at fair value, as discussed in
Note 3, Fair Value Measurements.

Effective January 1, 2008, the Company also adopted SFAS No. 159, The Fair
Value Option for Financial Assets and Financial Liabilities-Including an Amendment of FASB Statement No. 115 (SFAS No. 159), which permits entities to choose to measure many financial instruments and certain other items at
fair value. This statement also establishes presentation and disclosure requirements designed to facilitate comparisons between companies that choose different measurement attributes for similar types of assets and liabilities. After the initial
adoption, the election is made at the acquisition of a financial asset or financial liability and it may not be revoked. The Company applied the fair value option on certain time deposits and securities purchased under agreements to resell. The
adoption of SFAS No. 159 did not have a material impact on the Companys unaudited condensed consolidated financial statements.

Recent
Accounting Pronouncements and Changes, Not Yet Adopted

In May 2008, the FASB issued SFAS No. 162, The Hierarchy of
Generally Accepted Accounting Principles(SFAS No. 162). This standard identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements of
nongovernmental entities that are presented in conformity with U.S. GAAP. SFAS No. 162 does not set an explicit mandatory effective date; rather, it will become effective 60 days following approval by the SEC of amendments made by the Public
Accounting Oversight Board to AU Section 411, The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles. This standard is not expected to have an impact on the Companys financial
statements.

In April 2008, the FASB issued FSP SFAS No. 142-3, Determination of the Useful Life of Intangible Assets(FSP SFAS No. 142-3). FSP SFAS No. 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under
SFAS No. 142, Goodwill and Other Intangible Assets. The intent of this FSP is to improve the consistency between the useful life of a recognized intangible asset and the period of expected cash flows used to measure the fair value
of the asset under SFAS No. 141 (revised 2007), Business Combinations, and other GAAP. FSP SFAS No. 142-3 is effective for the Company on January 1, 2009. The Company is currently evaluating the impact that FSP
SFAS No. 142-3 will have on its financial statements.

On December 4, 2007, the FASB issued SFAS No. 141 (Revised
2007), Business Combinations (SFAS No. 141(R)). SFAS No. 141(R) will significantly change the accounting for business combinations. Under



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NYMEX HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)



SFAS No. 141(R), an acquiring entity will be required to recognize all the assets acquired and liabilities assumed in a transaction at the acquisition
date fair value with limited exceptions. SFAS No. 141(R) also includes a substantial number of new disclosure requirements. SFAS No. 141(R) applies prospectively to business combinations for which the acquisition date is on or after the
beginning of the first annual reporting period beginning on or after December 15, 2008. SFAS No. 141(R) will only have an impact on the Companys financial statements if it is involved in a business combination subsequent to 2008.

On December 4, 2007, the FASB issued SFAS No. 160, Non-controlling Interests in Consolidated Financial Statements-an
Amendment of ARB No. 51 (SFAS No. 160). SFAS No. 160 establishes new accounting and reporting standards for a non-controlling interest in a subsidiary and for the deconsolidation of a subsidiary. Specifically, this
statement requires the recognition of a non-controlling interest (minority interest) as equity in the consolidated financial statements separate from the parents equity. The amount of net income attributable to the non-controlling interest
will be included in consolidated net income on the face of the income statement. SFAS No. 160 clarifies that changes in a parents ownership interest in a subsidiary that do not result in deconsolidation are equity transactions if the
parent retains its controlling financial interest. In addition, this statement requires that a parent recognize a gain or loss in net income when a subsidiary is deconsolidated. Such gain or loss will be measured using the fair value of the
non-controlling equity investment on the deconsolidation date. SFAS No. 160 also includes expanded disclosure requirements regarding the interests of the parent and its non-controlling interest. SFAS No. 160 is effective for fiscal years,
and interim periods within those fiscal years, beginning on or after December 15, 2008. The Company is currently evaluating the impact that SFAS No. 160 will have on its financial statements.

NOTE 2.    Securities Lending

The Company entered into an agreement with JPMorgan Chase Bank, N.A. (JPMorgan) to participate in a securities lending program. Under this program, JPMorgan, as agent, lends on an overnight basis a portion of the clearing
members securities on deposit in the Companys margin deposits and guaranty fund (see Note 5) to third parties in return for cash collateral. JPMorgan, in turn, invests the cash collateral in various investments on behalf of the Company
in accordance with the programs investment guidelines. The Company receives the benefits, and bears the risks, of such investments. Interest expense is paid to the third party for the cash collateral the Company controlled during the
transaction, and a fee is paid to JPMorgan for administrating the transaction. Interest income and interest expense, as well as the fee paid to JPMorgan, are reported in the non-operating income and expenses section on the Companys condensed
consolidated statements of income. Interest income, interest expense and the JPMorgan fees recognized under the securities lending program were $4.8 million, $4.0 million and $0.2 million, respectively, for the three months ended June 30, 2008
compared to $31.1 million, $29.8 million and $0.3 million, respectively, for the second quarter of 2007. Interest income, interest expense and the JPMorgan fees recognized under the securities lending program were $12.6 million, $9.7 million and
$0.6 million, respectively, for the six months ended June 30, 2008 compared to $60.5 million, $58.6 million and $0.4 million, respectively, for the six months ended June 30, 2007.

At June 30, 2008, the fair value of the invested collateral was $558.4 million, comprised of $499.7 million in corporate debt securities and $58.7
million in other debt securities. The cost of the corporate debt securities was $512.4 million, resulting in a gross unrealized loss of $12.6 million at June 30, 2008. The fair value of the other debt securities at June 30, 2008
approximated its cost. The unrealized losses on the corporate debt securities were due to continued deterioration in the credit markets. The Company does not believe that these unrealized losses are other-than-temporary and, as such, are recorded in
accumulated other comprehensive income, net of taxes on the condensed consolidated balance sheet.



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NYMEX HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)



At December 31, 2007, the fair value of the invested collateral was $842.4 million, comprised of
$841.8 million in corporate debt securities and $0.6 million in other debt securities. The cost of the corporate debt securities was $846.9 million, resulting in a gross unrealized loss of $5.1 million at December 31, 2007. The fair value of
the other debt securities at December 31, 2007 approximated its cost. The unrealized losses on the corporate debt securities were due to significant deterioration in the credit markets.

At June 30, 2008, the fair value and cost of corporate debt securities with contractual maturities of one year or less was $480.3 million and $492.9
million, respectively. The fair value and cost of corporate debt securities with contractual maturities of more than one year was $19.4 million and $19.5 million, respectively. At June 30, 2008, corporate debt securities in an unrealized loss
position for one year or less had a fair value of $304.6 million and an unrealized loss of $10.0 million. Corporate debt securities in an unrealized loss position for more than one year had a fair value of $195.1 million and an unrealized loss of
$2.6 million.

At December 31, 2007, the fair value and cost of corporate debt securities with contractual maturities of one year or
less was $287.6 million and $288.2 million, respectively. The fair value and amortized cost of corporate debt securities with contractual maturities of more than one year was $554.2 million and $558.7 million, respectively. At December 31,
2007, corporate debt securities in an unrealized loss position for one year or less had a fair value of $791.1 million and an unrealized loss of $5.0 million. Corporate debt securities in an unrealized loss position for more than one year had a fair
value of $50.7 million and an unrealized loss of $0.1 million.

Proceeds from maturities and sales of corporate debt securities, not
reinvested in the securities lending program, were $294.4 million and $334.6 million for the three and six months ended June 30, 2008, respectively. The cost of all securities sold is based on the specific identification method. Realized losses
from sales amounted to $0.4 million for the three and six months ended June 30, 2008. For the three and six months ended June 30, 2007, proceeds from sales of corporate debt securities were $8.8 million and $439.5 million, respectively. The
realized gains for the three and six months ended June 30, 2007 were nominal. The change in the net unrealized gain or loss on these available-for-sale securities was not significant for any of the periods presented.

NOTE 3.    Fair Value Measurements

Effective January 1, 2008, the Company adopted SFAS No. 157, which establishes a consistent framework for measuring fair value and expands related disclosures, for all financial instruments accounted for at fair value. SFAS
No. 157 requires, among other things, the use of valuation techniques that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable
inputs reflect market data obtained from sources independent of the Company, while unobservable inputs reflect the Companys own market assumptions. These two types of inputs create the following fair value hierarchy:



| |  |  | Level 1Valuations based on quoted prices in active markets for identical assets or liabilities. The Companys Level 1 assets include short-term
investments in money market accounts, common equity and U.S. Government and agency securities that are traded in an active market.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Level 2Valuations based on quoted prices in markets that are not active, similar instruments in active markets or based on pricing models for which all
significant inputs are observable. The Companys Level 2 assets include municipal and certain debt securities that trade less frequently than exchange-traded instruments.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)



| |  |  | Level 3Valuations based on pricing models for which significant inputs are unobservable. The Companys Level 3 assets primarily include certain corporate
debt securities with limited market activity.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

If the inputs used to measure the financial assets fall within the
different levels described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

Assets valued based on Level 1 inputs utilize quoted market prices (unadjusted) in active markets. Assets whose fair values are determined by Level 2 inputs are based on pricing models using observable inputs such as
similar assets in active markets or other observable inputs such as interest rate curves, reference credit spreads and estimated pre-payment or default rates where applicable. Assets whose values are determined by Level 3 inputs are based on
unobservable inputs for the assets and include situations where there is little, if any, market activity for the asset.

The following
tables present the Companys assets that are measured at fair value on a recurring basis (in thousands) and are categorized using the fair value hierarchy:



|                                                 |                |                                                             |         |                                            |   |                                        |  |                          |        |  |   |        
|------------------------------------------------ | -------------- | ----------------------------------------------------------- | ------- | ------------------------------------------ | - | -------------------------------------- |  | ------------------------ | ------ |  | - | -------
|                                                 |                | Quoted Prices inActive Markets forIdentical Assets(Level 1) |         | Significant OtherObservableInputs(Level
2) |   | SignificantUnobservableInputs(Level 3) |  | Balanceas ofJune 30,2008
|                                                 | (in thousands)
|Money market and time deposits                   |                | $                                                           | 110,937 |                                            | $ |                                       |  | $                        |       |  | $ | 110,937
|U.S. government, agency and municipal securities |                |                                                             | 432,004 |                                            |   | 90,261                                 |  |                          |       |  |   | 522,265
|                                                 |                |                                                             |         |                                            |   |                                        |  |                          |        |  |   |        
|Marketable securities                            |                | $                                                           | 542,941 |                                            | $ | 90,261                                 |  | $                        |       |  | $ | 633,202
|                                                 |                |                                                             |         |                                            |   |                                        |  |                          |        |  |   |        
|Equity securities1                               |                | $                                                           | 115,726 |                                            | $ |                                       |  | $                        |       |  | $ | 115,726
|                                                 |                |                                                             |         |                                            |   |                                        |  |                          |        |  |   |        
|Corporate debt securities                        |                | $                                                           |        |                                            | $ | 464,186                                |  | $                        | 35,576 |  | $ | 499,762
|Other debt securities                            |                |                                                             | 58,605  |                                            |   |                                       |  |                          |       |  |   | 58,605 
|                                                 |                |                                                             |         |                                            |   |                                        |  |                          |        |  |   |        
|Collateral from securities lending program       |                | $                                                           | 58,605  |                                            | $ | 464,186                                |  | $                        | 35,576 |  | $ | 558,367
|                                                 |                |                                                             |         |                                            |   |                                        |  |                          |        |  |   |        



|1 | These equity securities represent a portion of the long term investments discussed in Note 7.
|- | ---------------------------------------------------------------------------------------------

The following table presents additional information about Level 3 assets measured at fair value on a recurring basis.



|                          |  |                                |         |                         |   |          |                                        |  |   |                            |   |                                                                                            |   |        |  |   |  
|------------------------- |  | ------------------------------ | ------- | ----------------------- | - | -------- | -------------------------------------- |  | - | -------------------------- | - | ------------------------------------------------------------------------------------------ | - | ------ |  | - | -
|                          |  | Balance as ofDecember 31, 2007 |         | Transfers outof Level 3 |   |          | UnrealizedLosses inComprehensiveIncome |  |   | Balance as ofJune 30, 2008 |   | Changes inUnrealized Gains (Losses)in Earnings forLevel 3 AssetsStill Held atJune 30, 2008
|                          |  | (in thousands)                
|Corporate debt securities |  | $                              | 159,327 |                         | $ | (123,069 | )                                      |  | $ | (682                       | ) |                                                                                            | $ | 35,576 |  | $ | 
|                          |  |                                |         |                         |   |          |                                        |  |   |                            |   |                                                                                            |   |        |  |   |  

Transfers out represents existing assets that were previously categorized as a lower level and the
inputs to the model became observable or securities that fully matured at par.



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NOTE 4.    Allowance for Doubtful Accounts and Credits

Clearing and transaction fees receivable are carried net of allowances for member credits, which are determined based upon expected billing adjustments.
Allowances for member credits were $1.0 million at June 30, 2008 and December 31, 2007. The Company believes that the allowances are adequate to cover member credits. The Company also believes that the likelihood of incurring material
losses due to non-collectability is remote and, therefore, no allowance for doubtful accounts is necessary.

An allowance for doubtful
accounts is maintained for market data accounts receivable to cover potential non-collectible vendor receivables and credit adjustments by the market data vendor customers. This allowance was $533,000 and $404,000 at June 30, 2008 and
December 31, 2007, respectively, which the Company believes is sufficient to cover potential bad debts and subsequent credits. Accounts receivable for market data revenues, net of the allowance, totaled $7.2 million and $10.1 million at
June 30, 2008 and December 31, 2007, respectively, and are included in other current assets on the Companys condensed consolidated balance sheets.

The Company maintains a reserve for non-collectible receivables of other revenues in the amount of $586,000 and $624,000 at June 30, 2008 and December 31, 2007, respectively, to cover potential bad debts and
expected credits. Accounts receivable for other revenues, net of the allowance, totaled $181,000 and $226,000 at June 30, 2008 and December 31, 2007, respectively, and are included in other current assets on the Companys condensed
consolidated balance sheets.

NOTE 5.    Margin Deposits and Guaranty Funds

The Company is required, under the Commodity Exchange Act, to maintain separate accounts for cash and securities that are deposited by clearing members,
at banks approved by the Company, as margin for house and customer accounts. These margin deposits are used by members to meet their obligations to the Company for margin requirements on open futures and options positions, as well as delivery
obligations.

Each clearing member firm is required to maintain a security deposit, in the form of cash or U.S. Treasury securities with a
maturity of ten years or less or shares of certain approved money market mutual funds, of a minimum of $2.5 million in a fund known as a guaranty fund (the Guaranty Fund). The Guaranty Fund may be used for any loss sustained by the
Company as a result of the failure of a clearing member to discharge its obligations on the NYMEX Division or COMEX Division. Although there is one Guaranty Fund for both divisions, separate contribution amounts are calculated for each division.

Every member and non-member executing transactions on the Companys divisions
must be guaranteed by a clearing member and clear their transactions through the Companys clearinghouse. This requirement also applies to transactions conducted outside of the Exchange which clear through NYMEX ClearPort® Clearing. Clearing members of the NYMEX Division and COMEX Division require their customers to maintain deposits in accordance with Company margin requirements. Margin deposits and guaranty
funds are posted by clearing members with the Companys clearinghouse. In the event of a clearing member default, the Company satisfies the clearing members obligations on the underlying contract by drawing on the defaulting clearing
members guaranty funds. If those resources are insufficient, the Company may fund the obligations from its own financial resources or draw on guaranty funds posted by non-defaulting clearing members. The Company also maintains a $115 million
default insurance policy. This insurance coverage is available to protect the Company and clearing members in the event that a default in excess of $250 million occurs.

The Company is entitled to earn interest on cash balances posted as margin deposits and guaranty funds. Such balances are included in the Companys condensed consolidated balance sheets, and are generally
invested overnight in cash and securities purchased under agreements to resell.



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NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)



The Company is also entitled to lend a portion of the clearing members securities on deposit
held by the Company for margin deposits and guaranty funds to third parties (see Note 2).

The following table sets forth margin deposits
and guaranty fund balances held by the Company on behalf of clearing members at June 30, 2008 and December 31, 2007 (in thousands):



|                                                        |                |               |               |                   |             |         |                |   |               |  |             |            |  |   |         |  |   |           
|------------------------------------------------------- | -------------- | ------------- | ------------- | ----------------- | ----------- | ------- | -------------- | - | ------------- |  | ----------- | ---------- |  | - | ------- |  | - | ----------
|                                                        |                | June 30, 2008 |               | December 31, 2007
|                                                        | MarginDeposits |               | GuarantyFunds |                   | Total Funds |         | MarginDeposits |   | GuarantyFunds |  | Total Funds
|Cash and securities earning interest for NYMEX Holdings |                |               |               |                   |             |         |                |   |               |  |             |            |  |   |         |  |   |           
|Cash                                                    |                | $             | 32,286        |                   | $           | 230     |                | $ | 32,516        |  | $           | 616        |  | $ | 14,042  |  | $ | 14,658    
|Securities purchased under agreements to resell         |                |               | 38,000        |                   |             |        |                |   | 38,000        |  |             | 155,534    |  |   |        |  |   | 155,534   
|                                                        |                |               |               |                   |             |         |                |   |               |  |             |            |  |   |         |  |   |           
|Total cash and securities                               |                |               | 70,286        |                   |             | 230     |                |   | 70,516        |  |             | 156,150    |  |   | 14,042  |  |   | 170,192   
|                                                        |                |               |               |                   |             |         |                |   |               |  |             |            |  |   |         |  |   |           
|Cash and securities earning interest for members        |                |               |               |                   |             |         |                |   |               |  |             |            |  |   |         |  |   |           
|Money market funds                                      |                |               | 14,190,147    |                   |             | 109,198 |                |   | 14,299,345    |  |             | 6,896,885  |  |   | 110,275 |  |   | 7,007,160 
|U.S. Treasuries                                         |                |               | 23,069,698    |                   |             | 196,147 |                |   | 23,265,845    |  |             | 12,193,040 |  |   | 174,988 |  |   | 12,368,028
|Letters of credit                                       |                |               | 4,184,461     |                   |             |        |                |   | 4,184,461     |  |             | 2,892,326  |  |   |        |  |   | 2,892,326 
|                                                        |                |               |               |                   |             |         |                |   |               |  |             |            |  |   |         |  |   |           
|Total cash and securities                               |                |               | 41,444,306    |                   |             | 305,345 |                |   | 41,749,651    |  |             | 21,982,251 |  |   | 285,263 |  |   | 22,267,514
|                                                        |                |               |               |                   |             |         |                |   |               |  |             |            |  |   |         |  |   |           
|Total funds                                             |                | $             | 41,514,592    |                   | $           | 305,575 |                | $ | 41,820,167    |  | $           | 22,138,401 |  | $ | 299,305 |  | $ | 22,437,706
|                                                        |                |               |               |                   |             |         |                |   |               |  |             |            |  |   |         |  |   |           

NOTE 6.    Goodwill and Indefinite-Lived Intangible Asset

In 1994, NYMEX Division acquired the equity interests, but not the trading rights and protections, of the owners of COMEX Division memberships. As part of
the agreement for this acquisition, a $10 million payment would be made to the owners of COMEX Division memberships in the event the Company consummated an initial public offering (Special IPO Payment). Upon the Companys successful
completion of its initial public offering on November 22, 2006, the Special IPO Payment was made to owners of COMEX Division memberships of record as of November 16, 2006. This payment was considered additional consideration to the
original purchase price of the COMEX equity interests and, therefore, was recorded as additional goodwill on the Companys condensed consolidated balance sheets. Goodwill amounted to $26.3 million at June 30, 2008 and December 31,
2007.

On November 20, 2006, the owners of COMEX Division memberships voted on and approved an agreement with the Company in which
their trading rights and protections were terminated in exchange for certain new trading rights and protections. In addition, each of the 772 owners of COMEX Division memberships received 8,400 shares of the Companys common stock for a
total consideration of 6,484,800 shares. The value assigned to the acquired trading rights was based on a measurement date of September 20, 2006, the date the agreement was entered into. The average price of the Companys common stock for
the two days before and after the measurement date was used to value the trading rights at approximately $280.8 million. Included in the value are direct costs the Company incurred in preparing and negotiating such agreement. The Company considered
the guidance set forth in SFAS No. 142, Goodwill and Other Intangible Assets,(SFAS No. 142) in determining that the acquired trading rights have an indefinite useful life.



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NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)



NOTE 7.    Long-Term Investments

Long-term investments are comprised principally of the Companys investments in DME Holdings, Montréal Exchange, Optionable Inc. and IMAREX as
described below:

In June 2005, the Company and Tatweer Dubai LLC (Tatweer), a subsidiary of Dubai Holding LLC, entered into a
joint venture to develop the Middle Easts first energy futures exchange. As part of this venture, DME Holdings Limited (DME Holdings) was incorporated as a limited company under the laws of Bermuda. DME Holdings is the indirect
owner of Dubai Mercantile Exchange Limited (the DME), a limited liability company formed under the laws of the Dubai International Financial Centre (DIFC), a financial free zone designed to promote financial services within
the United Arab Emirates. On June 1, 2007, DME commenced offering sour crude and fuel oil products for trading. DME is regulated by the Dubai Financial Services Authority, a regulatory body established within the DIFC. The Company is required
to contribute capital to the joint venture in an aggregate amount of $9.8 million over a five-year period, contingent upon the DMEs achievement of certain agreed upon performance targets. At June 30, 2008, the Companys capital
contributions made to the joint venture totaled $8.0 million.

In May 2007, DME Holdings entered into a shareholders agreement with the
Oman Investment Fund (the Shareholders Agreement) to ultimately sell a 31.58% equity interest in DME Holdings. In conjunction with this agreement, the Company and Tatweer loaned $13.7 million each to DME Holdings in order to meet the
financial resource requirements of the regulatory authorities. Upon the consummation of the restructuring of the investment pursuant to the Shareholders Agreement, the Company would have owned a 32.5% economic interest and a 34.21% voting interest
in DME Holdings; the Company has agreed with the other shareholders to allocate additional equity to certain market makers and other market participants. The DME continues to implement this plan to provide equity participation which will result in
further dilution of the Companys economic interest. Upon consummation of the Shareholders Agreement, the Company reevaluated its investment in DME under FIN No. 46R and determined that DME was no longer a VIE as it meets the business
scope exception. For the three- and six-month periods ended June 30, 2008, the Company incurred losses, attributable to its investment, of approximately $1.8 million and $3.9 million, respectively, as compared to $3.0 million and $4.6 million,
respectively, for the three- and six-month periods ended June 30, 2007. These losses are recorded in losses from unconsolidated investments on the condensed consolidated statements of income. As of June 30, 2008, DME repaid the Company
approximately $6.4 million of the outstanding loan balance, including interest.

On March 13, 2007, the Company entered into a Private
Placement Subscription Agreement with Bourse de Montréal, Inc., a Canadian corporation (Montréal Exchange) whereby the Company purchased approximately 3.1 million common shares of Montréal Exchange for
approximately $78 million in cash. The shares purchased represented approximately 10% of the total outstanding shares of Montréal Exchange immediately after the execution of the Private Placement Subscription Agreement, which was consummated
on March 23, 2007. The Company accounted for this investment under the cost method as it cannot exercise significant influence over the operating and financial policies of Montréal Exchange. Subsequently, on March 27, 2007,
Montréal Exchange commenced trading on the Toronto Stock Exchange under the symbol MXX. Following the public offering of the Montréal Exchange, the Company reported its investment in Montréal Exchange as
available-for-sale in accordance with SFAS No. 115. On February 13, 2008, the shareholders of Montréal Exchange approved a business combination with TSX Group Inc. to create a new integrated exchange group whereby Montréal
Exchange would become a wholly-owned subsidiary of TSX Group Inc. and Montréal Exchanges public stock retired. On May 1, 2008, this combination was completed and, in exchange for the Companys holdings in Montréal
Exchange, the Company received approximately $49.3 million in cash and 1.4 million shares of TSX Group Inc. common stock valued at approximately $63.4 million on such date. On June 11, 2008, the shareholders of TSX Group Inc. approved a
resolution to change the name of the corporation to TMX Group Inc.



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following the completion of their business combination with Montréal Exchange. At June 30, 2008, the fair value of the Companys holdings of
TMX Group Inc. common stock was approximately $58.6 million, which represents an unrealized loss position of $4.8 million for less than twelve months.

In April 2007, the Company entered into a Stock and Warrant Purchase Agreement with Optionable, Inc. (Optionable), an energy derivatives broker, whereby the Company purchased 19% of Optionables
outstanding common shares on a fully diluted basis for approximately $28.9 million in cash. The warrant entitled the Company to purchase from Optionable common shares so as to increase the Companys ownership to an amount not to exceed 40% of
Optionables outstanding common shares on a fully diluted basis. The shares of Optionable were considered available-for-sale securities in accordance with SFAS No. 115. Following a precipitous fall in Optionables stock price during
May 2007 due to the loss of a major customer and resignation of its chief executive officer, among other matters, the Company evaluated its investment in Optionable for other-than-temporary impairment. In evaluating this investment, the Company took
into consideration the severity of the stock price decline, the expected period of time necessary for a recovery to occur and the Companys ability to retain its investment during the period anticipated for recovery in fair value, if any. In
analyzing Optionables financial condition and following the guidance in SFAS No. 115 and EITF 03-1, The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments, the Company determined the impairment in
its Optionable investment as other-than-temporary and recorded a pre-tax charge of approximately $26 million in June 2007. After further consideration of all available evidence used to evaluate the fair value of Optionable, the Company concluded,
that at June 30, 2008, the decline in fair value was other than temporary and wrote down the remaining carrying value to zero.

In
November 2007, the Company acquired approximately 15% of IMAREX ASA (IMAREX) for $52 million in cash. Subsequent acquisitions of IMAREX shares, for $2 million in cash, brought the Companys total ownership to approximately 16% at
December 31, 2007. In February 2008, the Company participated in a private placement of shares newly issued by IMAREX (in connection with IMAREXs acquisition of Spectron Group plc) for approximately $11 million in cash, following which
the Companys ownership in IMAREX increased to approximately 18%. In March 2008, IMAREX consummated a further offering of its shares, in which the Company did not participate, resulting in a decrease of the Companys total ownership in
IMAREX to approximately 15%. IMAREX, headquartered in Oslo, Norway, operates a hybrid model of electronic trading and voice brokerage and offers research, transaction and settlement services for financial derivatives based on oceangoing freight,
airborne emissions, farmed salmon, electric power and heavy fuel oil. The shares of IMAREX are reported as available-for-sale securities in accordance with SFAS No. 115. At June 30, 2008, the fair value of the securities was approximately
$57.1 million, which represents an unrealized loss position of $8.3 million for less than twelve months.

NOTE 8.    Long-Term Debt

The Company issued long-term debt totaling $100 million during 1996 and 1997 to provide completion financing for the Companys
trading facility and headquarters. This issuance contained three series, each with different maturities, interest rates and repayment schedules. Series A notes require annual principal repayments from 2001 to 2010, and a final payment of principal
in 2011. Series B notes require annual principal repayments from 2011 to 2020, and a final payment of principal in 2021. Series C notes require annual principal repayments from 2022 to 2025, and a final payment of principal in 2026. The notes
represent senior unsecured obligations of the Company and are not secured by the Companys headquarters facility, the Companys interest therein, or any other collateral. The notes are subject to a prepayment penalty in the event they are
paid off prior to their scheduled maturities. The Company believes that any economic benefit derived from early redemption of these notes would be offset by the redemption penalty. These notes place certain limitations on the Companys ability
to incur additional indebtedness. At June 30, 2008 and December 31, 2007, the notes payable balance, including the current portion, was $80.3 million.



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NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)



NOTE 9.    Earnings per Share

The calculation of earnings per common share for the three- and six-month periods ended June 30, 2008 and 2007 is as follows (in thousands, except
for share data):



|                                            |  |                            |            |                          |   |            |  |      |            |  |   |           
|------------------------------------------- |  | -------------------------- | ---------- | ------------------------ | - | ---------- |  | ---- | ---------- |  | - | ----------
|                                            |  | Three Months EndedJune 30, |            | Six Months EndedJune 30,
|                                            |  | 2008                       |            | 2007                     |   | 2008       |  | 2007
|Net income                                  |  | $                          | 94,312     |                          | $ | 41,745     |  | $    | 165,497    |  | $ | 97,965    
|                                            |  |                            |            |                          |   |            |  |      |            |  |   |           
|Weighted average common shares outstanding: |  |                            |            |                          |   |            |  |      |            |  |   |           
|Basic                                       |  |                            | 94,791,000 |                          |   | 94,450,000 |  |      | 94,786,000 |  |   | 94,450,000
|Effect of stock options                     |  |                            | 116,000    |                          |   | 277,000    |  |      | 131,000    |  |   | 266,000   
|Effect of restricted stock units            |  |                            | 40,000     |                          |   | 71,000     |  |      | 64,000     |  |   | 68,000    
|                                            |  |                            |            |                          |   |            |  |      |            |  |   |           
|Diluted                                     |  |                            | 94,947,000 |                          |   | 94,798,000 |  |      | 94,981,000 |  |   | 94,784,000
|                                            |  |                            |            |                          |   |            |  |      |            |  |   |           
|Earnings per Share:                         |  |                            |            |                          |   |            |  |      |            |  |   |           
|Basic                                       |  | $                          | 0.99       |                          | $ | 0.44       |  | $    | 1.75       |  | $ | 1.04      
|Diluted                                     |  | $                          | 0.99       |                          | $ | 0.44       |  | $    | 1.74       |  | $ | 1.03      

NOTE 10.    Members Retirement Plan and Benefits

The Company maintains a retirement and benefit plan under the COMEX Members Recognition and Retention Plan (MRRP). This plan provides
benefits to certain members of the COMEX Division based on long-term membership, and participation is limited to individuals who were COMEX Division members prior to the Companys acquisition of COMEX in 1994. No new participants were permitted
into the plan after the date of the acquisition. The annual benefit payments are $12,500 ($2,000 for options members) for ten years for vested participants. Under the terms of the COMEX MRRP, the Company is required to fund the plan with a minimum
annual contribution of $400,000 until it is fully funded. The Company funded the plan with a contribution of $800,000 in 2007 and expects to do so again in 2008. Based on continued funding of $800,000 per year, and certain actuarial assumptions, the
Company expects the plan to be fully funded in 2019. The annual contribution may be reduced if actuarial assumptions indicate that full funding can be achieved without making the entire funding contributions indicated above. Corporate contributions
are charged against current operations. All benefits to be paid under the COMEX MRRP shall be based upon reasonable actuarial assumptions which, in turn, are based upon the amounts that are available and are expected to be available to pay benefits,
except that the benefits paid to any individual will not exceed the amounts stated above. Quarterly distributions from the COMEX MRRP began in the second quarter of 2002. Subject to the foregoing, the board of directors of the Company reserves the
right to amend or terminate the COMEX MRRP upon an affirmative vote of 60% of the eligible COMEX Division plan participants.

NOTE
11.    Direct Transaction Costs

The Company incurs various costs to support its trading floor and clearinghouse.
These costs include fees paid to third-party brokers for submitting individually negotiated off-exchange trades to the Exchange for the clearing of specified products. These costs also include service fees paid to the Chicago Mercantile Exchange
Inc. (CME) (as described in the following paragraph), license and royalty fees paid to third-party vendors for the use of their settlement prices, and trading floor supplies needed for the Companys open outcry venue.

In 2006, NYMEX Exchange entered into a technology services agreement, dated as of April 6, 2006 (the Services Agreement), with CME, a
wholly-owned subsidiary of CME Group, to become the exclusive electronic



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NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)



trading service provider for NYMEXs energy futures and options contracts and for metals products listed on its COMEX Division. The Services Agreement
has a ten-year term from the launch date with rolling three-year extensions unless, among other reasons, (i) either party elects not to renew the Services Agreement upon written notice prior to the beginning of the applicable renewal term, or
(ii) either party elects to terminate the Services Agreement between the fifth and the sixth year anniversary of the first launch date upon written notice and payment of a termination fee. Pursuant to the Services Agreement, NYMEX Exchange will
pay to CME a minimum annual payment or per trade fees based on average daily volume, whichever is greater. In addition, pursuant to the Services Agreement, if the Company acquires or merges with an entity, that at the time of such acquisition or
merger, operates a trading execution system for futures or futures options products (or off-exchange look-alike versions of such products), electronic trading of such products shall be transitioned to CME Globex electronic trading platform
(CME Globex) within two years.

Under the terms of the Services Agreement, the Company incurred fees of $18.0 million and $35.0
million for the three- and six-month periods ended June 30, 2008, respectively, as compared to $13.5 million and $25.9 million for the same periods last year. These fees are included in direct transaction costs on the condensed consolidated
statements of income.

On July 18, 2008, NYMEX Exchange and CME amended the terms of their Services Agreement (the
Amendment) to extend the terms, at the option of CME, for an additional two years, as discussed in Note 20, Subsequent Events. In addition, pursuant to the terms of the Amendment, the mid-term termination right provided in
the Services Agreement, which allowed either party to terminate the agreement during the time period between June 11, 2011 and June 11, 2012, has been delayed until the time period between June 11, 2012 and June 11, 2013.

NOTE 12.    Pension and Other Benefit Plans

The Company sponsors various defined contribution and postretirement plans to qualifying employees. The Company also provides postemployment benefits to eligible employees after employment but before retirement.

Savings Plan

The Company
sponsors a defined contribution plan (the 401K Plan) that incorporates a deferred salary arrangement under Section 401(k) of the Internal Revenue Code to all eligible domestic employees. The Company matches employee contributions up
to a maximum of 3% of salary. In addition, the Company makes annual contributions ranging from 2% to 7% based upon tenure for each eligible 401K Plan member.

Deferred Compensation Plan

The Company has a nonqualified deferred compensation plan (the Deferred Plan)
for key employees to permit them to defer receipt of current compensation. The Company may provide a matching and a regular year-end contribution to the Deferred Plan. Matching and year-end contribution percentages follow the same guidelines as the
Companys defined contribution plan. The Deferred Plan is not intended to be a qualified plan under the provisions of the Internal Revenue Code. It is intended to be unfunded and, therefore, all compensation deferred under the Deferred Plan is
held by the Company and commingled with its general assets. The participating employees are general creditors of the Company with respect to these benefits. The Company has the right to amend, modify, or terminate the Deferred Plan at any time. At
June 30, 2008 and December 31, 2007, deferred compensation amounted to $2.5 million and $2.8 million, respectively, and is included in accrued salaries and related liabilities on the condensed consolidated balance sheets.



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NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)



Postemployment Plan

The Company offers various postemployment benefits to employees after employment but before retirement. These benefits are paid in accordance with the Companys established postemployment benefit practices and
policies. Postemployment benefits include both short-term disability income benefits and long-term disability related health benefits. The Company accrues for these future postemployment benefits, which are funded on a pay-as-you-go basis. The
Companys postemployment benefits liabilities at June 30, 2008 and December 31, 2007 were $0.3 million and $0.8 million, respectively.

Postretirement Plan

The Companys postretirement benefit costs are developed from actuarial valuations.
Inherent in these valuations are key assumptions, including the discount rate and health care cost trend rate. Material changes in its postretirement benefit costs may occur in the future due to changes in these assumptions, changes in the number of
plan participants and changes in the level of benefits provided. The Company provides certain health care and life insurance benefit plans for qualifying retired employees. Substantially all of the Companys employees may become eligible for
these benefits if they reach specified age and years of service criteria while working for the Company. The benefits are provided through certain insurance companies. The Company expects to fund its share of such benefit costs principally on a
pay-as-you-go basis. Accrued postretirement benefit costs are included in other non-current liabilities on the condensed consolidated balance sheets.

The net periodic benefit cost for the Companys defined benefit retirement plans and other benefit plans for the three and six months ended June 30, 2008 and 2007 included the following components (in
thousands):



|                                             |  |                            |     |   |                          |   |     |      |  |   |      |   |  |   |     |  
|-------------------------------------------- |  | -------------------------- | --- | - | ------------------------ | - | --- | ---- |  | - | ---- | - |  | - | --- | -
|                                             |  | Three Months EndedJune 30, |     |   | Six Months EndedJune 30, |  
|                                             |  | 2008                       |     |   | 2007                     |   |     | 2008 |  |   | 2007 |  
|Service costs                                |  | $                          | 90  |   |                          | $ | 110 |      |  | $ | 180  |   |  | $ | 220 |  
|Interest costs                               |  |                            | 102 |   |                          |   | 108 |      |  |   | 204  |   |  |   | 216 |  
|Amortization of prior service costs          |  |                            | (11 | ) |                          |   | (14 | )    |  |   | (22  | ) |  |   | (28 | )
|Amortization of net loss                     |  |                            |    |   |                          |   | 16  |      |  |   |     |   |  |   | 32  |  
|                                             |  |                            |     |   |                          |   |     |      |  |   |      |   |  |   |     |  
|Total net period postretirement benefit cost |  | $                          | 181 |   |                          | $ | 220 |      |  | $ | 362  |   |  | $ | 440 |  
|                                             |  |                            |     |   |                          |   |     |      |  |   |      |   |  |   |     |  

NOTE 13.    Lease Termination Costs

In June 2006, the Company ceased its floor trading operations of its London-based exchange. As a result, the Company incurred lease termination costs of
approximately $1.5 million during the first and second quarters of 2006 on various operating leases it had contracted to support its floor trading operations. In September 2006, the Company consolidated its London offices, and in doing so vacated
its location at 131 Finsbury Pavement. The Company began negotiations with the landlord during September 2006 to buy out the remaining lease term. As such, the Company recorded a charge of approximately $1.9 million in the third quarter of 2006 for
the estimated amount to be paid. This charge was recorded in occupancy and equipment on the Companys condensed consolidated statements of income.



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NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)



The following tables summarize the activity related to the various London exchange lease terminations
in accordance with SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities (in thousands):



|                                                |  |                       |       |  |                              |                       |   |     |  
|----------------------------------------------- |  | --------------------- | ----- |  | ---------------------------- | --------------------- | - | --- | -
|                                                |  | LeaseTerminationCosts |       |  |                              | LeaseTerminationCosts |  
|Total expected to be incurred                   |  | $                     | 3,426 |  | Liability at January 1, 2008 |                       | $ | 878 |  
|                                                |  |                       |       |  |                              |                       |   |     |  
|Charges incurred in 2006                        |  | $                     | 3,426 |  | Charges                      |                       |   |    |  
|Charges incurred in 2007                        |  |                       |      |  | Payments                     |                       |   | (61 | )
|Charges incurred in 2008                        |  |                       |      |  |                              |                       |   |     |  
|                                                |  |                       |       |  |                              |                       |   |     |  
|Cumulative charges incurred as of June 30, 2008 |  | $                     | 3,426 |  | Liability at June 30, 2008   |                       | $ | 817 |  
|                                                |  |                       |       |  |                              |                       |   |     |  

NOTE 14.    Common Stock

At June 30, 2008, the composition of common stock was as follows:



|                        |  |             |  |            |  |             
|----------------------- |  | ----------- |  | ---------- |  | ------------
|                        |  | Authorized1 |  | Issued     |  | Outstanding2
|Common Stock3           |  | 101,984,800 |  | 22,083,309 |  | 22,072,550  
|Series A-1 Common Stock |  | 24,480,000  |  | 19,806,000 |  | 19,806,000  
|Series A-2 Common Stock |  | 24,480,000  |  | 23,310,000 |  | 23,310,000  
|Series A-3 Common Stock |  | 24,480,000  |  | 23,411,000 |  | 23,411,000  
|Series B-1 Common Stock |  | 2,161,600   |  | 1,974,000  |  | 1,974,000   
|Series B-2 Common Stock |  | 2,161,600   |  | 2,099,300  |  | 2,099,300   
|Series B-3 Common Stock |  | 2,161,600   |  | 2,115,400  |  | 2,115,400   
|                        |  |             |  |            |  |             
|                        |  | 181,909,600 |  | 94,799,009 |  | 94,788,250  
|                        |  |             |  |            |  |             



|1 | Common stock authorized
consists of: (i) 73,440,000 shares reserved for issuance upon conversion of the Series A-1, Series A-2 and Series A-3 Common Stock; (ii) 8,160,000 shares authorized and issued for the conversion of the Companys preferred stock;
(iii) 4,300,000 shares reserved for issuance under the Companys 2006 Long-Term Incentive Plan; (iv) 9,600,000 shares authorized in connection with the IPO of which 6,365,000 were issued; and (v) 6,484,800 shares reserved for
issuance upon conversion of the Series B-1, Series B-2 and Series B-3 Common Stock.
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|2 | Series B-1, Series B-2 and
Series B-3 Common Stock were issued as consideration for the trading rights the Company acquired from the owners of COMEX Division memberships (see Note 6). In accordance with the terms of the agreement, each of the 772 owners of COMEX Division
memberships was to receive 8,400 shares of the Companys common stock (2,800 Series B-1, 2,800 Series B-2, and 2,800 Series B-3 shares) and was able to individually elect the timing of the receipt of those shares. The election choices included
the receipt of: (i) all shares on the date the agreement was consummated (November 20, 2006); (ii) all shares on January 2, 2007; or (iii) in one-third increments on the 180th, 360thand 540thday following the date the Companys Registration Statement on Form S-1, as filed with the SEC, became effective (November 16, 2006). As a result of the election by the 772
owners of COMEX Division memberships: 204 elected to receive their shares, totaling 1,713,600 shares, on November 20, 2006; 286 elected to receive their shares, totaling 2,402,400 shares, on January 2, 2007; and 282 elected to receive
their shares, totaling 2,368,800 shares, in one-third increments as described above.
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|3 | The difference between the
Common Stock issued and outstanding represents stock awards that have vested to non-employee directors of the Companys board, which were granted under the 2006 Long-Term
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)



| | Incentive Plan. In accordance with each non-employee directors award, shares that are vested are unable to be sold until six months after the director
is no longer serving on the board, therefore, the vested shares are considered to be issued but not outstanding.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

On
July 29, 2008, the Company filed a Certificate of Retirement of its Series A-1 Common Stock, Series A-2 Common Stock, Series A-3 Common Stock, Series B-1 Common Stock, Series B-2 Common Stock and Series B-3 Common Stock (the Certificate
of Retirement) with the State of Delaware, which became effective on the same day. Pursuant to Section 243(b) of the Delaware General Corporation Law, once the Certificate of Retirement became effective, it had the effect of amending the
Companys certificate of incorporation so as to reduce the number of authorized shares of the Companys capital stock. Accordingly, the authorized shares of the Companys capital stock was reduced by 79,924,800 shares, such that the
total number of authorized shares of the Companys capital stock is now 101,984,800.

NOTE 15.    Supplemental Disclosures of
Cash Flow Information

Supplemental disclosures of cash flow information for the six months ended June 30, 2008 and 2007 are as
follows:



|                                                        |  |                          |         |   |      |   |       
|------------------------------------------------------- |  | ------------------------ | ------- | - | ---- | - | ------
|                                                        |  | Six Months EndedJune 30,
|                                                        |  | 2008                     |         |   | 2007
|                                                        |  | (in thousands)          
|Cash paid for:                                          |  |                          |         |   |      |   |       
|Interest                                                |  | $                        | 12,804  |   |      | $ | 61,856
|                                                        |  |                          |         |   |      |   |       
|Income taxes                                            |  | $                        | 118,194 |   |      | $ | 86,596
|                                                        |  |                          |         |   |      |   |       
|Non-cash investing and financing activities:            |  |                          |         |   |      |   |       
|Unrealized (loss) gain on available-for-sale securities |  | $                        | (17,814 | ) |      | $ | 35,947
|                                                        |  |                          |         |   |      |   |       
|Exchange of available-for-sale security                 |  | $                        | 63,439  |   |      | $ |      
|                                                        |  |                          |         |   |      |   |       

NOTE 16.    Share-Based Compensation

The Companys 2006 Omnibus Long-Term Incentive Plan (the 2006 LTIP) was approved by its board of directors on July 13, 2006 and by
its stockholders on October 12, 2006. The 2006 LTIP provides for the granting of incentive stock options, non-qualified stock options (NQSOs), restricted stock, and restricted stock unit awards (RSUs) to employees and
directors for up to 4.3 million shares of common stock. The Company believes that such awards better align the interest of its employees with those of its stockholders. The exercise price for all stock options is not less than 100% of the fair
market value of the common stock on the date of grant. Notwithstanding the foregoing, the fair market value of a share of common stock for purposes of determining awards with a grant date as of the Companys initial public offering was set in
the final prospectus for such initial public offering. No monetary payment is required as a condition of receiving a restricted stock or restricted stock unit award, since the consideration for the award shall be services actually rendered to the
Company or for the Companys benefit. All share-based compensation currently awarded vest over a varying period of up to four years from the date of grant. NQSOs currently awarded have a maximum term of 8 years.

On January 9, 2008, the Company granted to its employees 376,100 NQSOs and 49,100 RSUs. On May 20, 2008, approximately 7,000 RSUs were granted
to its directors under 2006 LTIP. The Company follows fair value accounting for share-based compensation as required under SFAS No. 123 (Revised), Share-Based Payment (SFAS No. 123R). SFAS No. 123R requires
recognition of compensation costs related to share-based



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NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)



payments over the period that an employee provides services in exchange for the award. The fair value of the NQSOs awards granted on January 9, 2008 was
based on the Black-Scholes option-pricing model using the following assumptions:



|                                       |  |   |          
|-------------------------------------- |  | - | ---------
|Risk-free interest rate                |  |   | 3.08%    
|Expected volatility                    |  |   | 34.69%   
|Expected option life                   |  |   | 4.5 years
|Dividend yield                         |  |   | 0.3%     
|Weighted-average grant-date fair value |  | $ | 37.83    

The risk-free interest rate was based on the implied yields of U.S. Treasury Notes with a maturity
equal to the NQSOs expected life at the time of grant. Expected volatility was based on the volatility of stock prices of companies within the same industry as the Company. The expected NQSOs life was determined based on various factors including
employee turnover rate, the vesting period of the NQSOs and information received from third-party consultants.

Share-based compensation
expense was approximately $4.0 million and $7.7 million for the three and six months ended June 30, 2008, respectively, and is recorded in salaries and employee benefits on the condensed consolidated statements of income.

SFAS No. 123R additionally requires companies to estimate forfeiture rates at the time of grant and to revise these estimates in subsequent periods
if actual forfeiture rates differ from those estimates. The Company applied the forfeiture rate to the unvested portion of the NQSOs valuation and performed a true-up for the actual forfeited amount of the valuation on a quarterly basis. As of
June 30, 2008, the current forfeiture rate for the non-vested NQSOs and RSUs was 8.3% and 9.8%, respectively, as compared to 9.8% and 12.3%, respectively, at December 31, 2007.

The following table summarizes the changes in NQSOs activities under the 2006 LTIP plan for the three and six months ended June 30, 2008:



|                                           |  |                                 |  |                                |        |                      |         |                                |   |       
|------------------------------------------ |  | ------------------------------- |  | ------------------------------ | ------ | -------------------- | ------- | ------------------------------ | - | ------
|                                           |  | Three Months EndedJune 30, 2008 |  | Six Months EndedJune 30, 2008 
|                                           |  | Shares(in thousands)            |  | Weighted AverageExercise Price |        | Shares(in thousands) |         | Weighted AverageExercise Price
|Outstanding at the beginning of the period |  | 1,427.2                         |  | $                              | 77.67  |                      | 1,066.8 |                                | $ | 62.83 
|Granted                                    |  |                                |  |                                |       |                      | 376.1   |                                |   | 118.97
|Exercised                                  |  | 9.2                             |  |                                | 59.00  |                      | 23.5    |                                |   | 59.00 
|Forfeited or expired                       |  | 4.0                             |  |                                | 96.48  |                      | 5.5     |                                |   | 86.26 
|                                           |  |                                 |  |                                |        |                      |         |                                |   |       
|Outstanding at the end of the period       |  | 1,414.0                         |  | $                              | 77.73  |                      | 1,414.0 |                                | $ | 77.73 
|                                           |  |                                 |  |                                |        |                      |         |                                |   |       
|Exercisable at the end of the period       |  | 49.90                           |  | $                              | 101.36 |                      | 49.90   |                                | $ | 135.09
|                                           |  |                                 |  |                                |        |                      |         |                                |   |       



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NYMEX HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)



The following table summarizes the changes in RSUs under the 2006 LTIP plan for the three and six
months ended June 30, 2008:



|                                         |  |                                 |  |                                     |        |                      |       |                                     |   |       
|---------------------------------------- |  | ------------------------------- |  | ----------------------------------- | ------ | -------------------- | ----- | ----------------------------------- | - | ------
|                                         |  | Three Months EndedJune 30, 2008 |  | Six Months EndedJune 30, 2008      
|                                         |  | Shares(in thousands)            |  | Weighted AverageGrant-DateFairValue |        | Shares(in thousands) |       | Weighted AverageGrant-DateFairValue
|Nonvested at the beginning of the period |  | 187.5                           |  | $                                   | 76.82  |                      | 140.5 |                                     | $ | 62.51 
|Granted                                  |  | 7.0                             |  |                                     | 98.27  |                      | 56.1  |                                     |   | 116.38
|Vested                                   |  | 4.7                             |  |                                     | 108.43 |                      | 6.2   |                                     |   | 111.29
|Forfeited or expired                     |  | 0.7                             |  |                                     | 100.36 |                      | 1.3   |                                     |   | 82.99 
|                                         |  |                                 |  |                                     |        |                      |       |                                     |   |       
|Nonvested at the end of the period       |  | 189.1                           |  | $                                   | 76.73  |                      | 189.1 |                                     | $ | 76.76 
|                                         |  |                                 |  |                                     |        |                      |       |                                     |   |       

At June 30, 2008, there was $40.1 million of total unrecognized compensation cost related to
non-vested share-based compensation arrangements granted under the Plan. This cost is expected to be recognized over the future vesting period.

NOTE
17.    Segment Reporting

The Company considers operating
results for two business segments: Open Outcry and Electronic Trading and Clearing. Open Outcry is the trading and clearing of NYMEX Division and COMEX Division futures and options contracts on the trading floors of the Exchange. Electronic Trading
and Clearing consists of NYMEX ClearPort® Trading and NYMEX ClearPort® Clearing and trading on the CME Globex® electronic trading platform. The Company reports revenue on a segment basis. Total revenues presented for each segment include clearing and transaction fees related to such segment and a pro
rated portion of market data fees. Other revenues are attributed entirely to Open Outcry. Direct transaction costs are allocated directly to the segment they are incurred for. Depreciation and amortization and other operating expenses are allocated
directly to the segment they pertain to, where practicable, with the balance of these expenses allocated based on the proportion of operating revenues, net of direct transaction costs, attributed to each segment. Non-operating income and expenses
are allocated entirely to Corporate/Other.



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NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)



Financial information relating to these business segments is set forth below (in thousands):



|                                                |  |                                  |        |                                  |   |                  |  |   |        |   |            |   |                             |  |                  |        |  |       |         |  |   |         |   |  |   |         |  
|----------------------------------------------- |  | -------------------------------- | ------ | -------------------------------- | - | ---------------- |  | - | ------ | - | ---------- | - | --------------------------- |  | ---------------- | ------ |  | ----- | ------- |  | - | ------- | - |  | - | ------- | -
|                                                |  | Three Months Ended June 30, 2008 |        | Three Months Ended June 30, 2007 |  
|                                                |  | OpenOutcry                       |        | ElectronicTrading &Clearing      |   | Corporate /Other |  |   | Total  |   | OpenOutcry |   | ElectronicTrading &Clearing |  | Corporate /Other |        |  | Total |        
|Total operating revenues                        |  | $                                | 46,887 |                                  | $ | 163,921          |  | $ |       |   |            | $ | 210,808                     |  | $                | 41,219 |  | $     | 122,378 |  | $ |        |   |  | $ | 163,597 |  
|Direct transaction costs                        |  |                                  |       |                                  |   | 26,886           |  |   |       |   |            |   | 26,886                      |  |                  |       |  |       | 24,318  |  |   |        |   |  |   | 24,318  |  
|Depreciation and amortization                   |  |                                  | 910    |                                  |   | 2,661            |  |   |       |   |            |   | 3,571                       |  |                  | 1,766  |  |       | 1,848   |  |   |        |   |  |   | 3,614   |  
|Other operating expenses                        |  |                                  | 15,488 |                                  |   | 23,604           |  |   | 1,915  |   |            |   | 41,007                      |  |                  | 16,507 |  |       | 21,671  |  |   |        |   |  |   | 38,178  |  
|                                                |  |                                  |        |                                  |   |                  |  |   |        |   |            |   |                             |  |                  |        |  |       |         |  |   |         |   |  |   |         |  
|Operating income (loss)                         |  |                                  | 30,489 |                                  |   | 110,770          |  |   | (1,915 | ) |            |   | 139,344                     |  |                  | 22,946 |  |       | 74,541  |  |   |        |   |  |   | 97,487  |  
|Non-operating income (expense)                  |  |                                  |       |                                  |   |                 |  |   | 30,847 |   |            |   | 30,847                      |  |                  |       |  |       |        |  |   | (23,472 | ) |  |   | (23,472 | )
|                                                |  |                                  |        |                                  |   |                  |  |   |        |   |            |   |                             |  |                  |        |  |       |         |  |   |         |   |  |   |         |  
|Income (loss) before provision for income taxes |  |                                  | 30,489 |                                  |   | 110,770          |  |   | 28,932 |   |            |   | 170,191                     |  |                  | 22,946 |  |       | 74,541  |  |   | (23,472 | ) |  |   | 74,015  |  
|Provision (benefit) for income taxes            |  |                                  | 13,293 |                                  |   | 48,296           |  |   | 14,290 |   |            |   | 75,879                      |  |                  | 10,004 |  |       | 32,500  |  |   | (10,234 | ) |  |   | 32,270  |  
|                                                |  |                                  |        |                                  |   |                  |  |   |        |   |            |   |                             |  |                  |        |  |       |         |  |   |         |   |  |   |         |  
|Net income (loss)                               |  | $                                | 17,196 |                                  | $ | 62,474           |  | $ | 14,642 |   |            | $ | 94,312                      |  | $                | 12,942 |  | $     | 42,041  |  | $ | (13,238 | ) |  | $ | 41,745  |  
|                                                |  |                                  |        |                                  |   |                  |  |   |        |   |            |   |                             |  |                  |        |  |       |         |  |   |         |   |  |   |         |  



|                                                |  |                                |        |                                |   |                  |  |   |         |   |            |   |                             |  |                  |        |  |       |         |  |   |         |   |  |   |         |  
|----------------------------------------------- |  | ------------------------------ | ------ | ------------------------------ | - | ---------------- |  | - | ------- | - | ---------- | - | --------------------------- |  | ---------------- | ------ |  | ----- | ------- |  | - | ------- | - |  | - | ------- | -
|                                                |  | Six Months Ended June 30, 2008 |        | Six Months Ended June 30, 2007 |  
|                                                |  | OpenOutcry                     |        | ElectronicTrading &Clearing    |   | Corporate /Other |  |   | Total   |   | OpenOutcry |   | ElectronicTrading &Clearing |  | Corporate /Other |        |  | Total |        
|Total operating revenues                        |  | $                              | 95,908 |                                | $ | 323,775          |  | $ |        |   |            | $ | 419,683                     |  | $                | 87,352 |  | $     | 240,471 |  | $ |        |   |  | $ | 327,823 |  
|Direct transaction costs                        |  |                                |       |                                |   | 54,969           |  |   |        |   |            |   | 54,969                      |  |                  |       |  |       | 48,420  |  |   |        |   |  |   | 48,420  |  
|Depreciation and amortization                   |  |                                | 3,253  |                                |   | 3,776            |  |   |        |   |            |   | 7,029                       |  |                  | 3,592  |  |       | 3,553   |  |   |        |   |  |   | 7,145   |  
|Other operating expenses                        |  |                                | 30,661 |                                |   | 44,702           |  |   | 10,090  |   |            |   | 85,453                      |  |                  | 36,559 |  |       | 42,500  |  |   |        |   |  |   | 79,059  |  
|                                                |  |                                |        |                                |   |                  |  |   |         |   |            |   |                             |  |                  |        |  |       |         |  |   |         |   |  |   |         |  
|Operating income (loss)                         |  |                                | 61,994 |                                |   | 220,328          |  |   | (10,090 | ) |            |   | 272,232                     |  |                  | 47,201 |  |       | 145,998 |  |   |        |   |  |   | 193,199 |  
|Non-operating income (expense)                  |  |                                |       |                                |   |                 |  |   | 32,385  |   |            |   | 32,385                      |  |                  |       |  |       |        |  |   | (19,503 | ) |  |   | (19,503 | )
|                                                |  |                                |        |                                |   |                  |  |   |         |   |            |   |                             |  |                  |        |  |       |         |  |   |         |   |  |   |         |  
|Income (loss) before provision for income taxes |  |                                | 61,994 |                                |   | 220,328          |  |   | 22,295  |   |            |   | 304,617                     |  |                  | 47,201 |  |       | 145,998 |  |   | (19,503 | ) |  |   | 173,696 |  
|Provision (benefit) for income taxes            |  |                                | 27,029 |                                |   | 96,063           |  |   | 16,028  |   |            |   | 139,120                     |  |                  | 20,580 |  |       | 63,655  |  |   | (8,505  | ) |  |   | 75,731  |  
|                                                |  |                                |        |                                |   |                  |  |   |         |   |            |   |                             |  |                  |        |  |       |         |  |   |         |   |  |   |         |  
|Net income (loss)                               |  | $                              | 34,965 |                                | $ | 124,265          |  | $ | 6,267   |   |            | $ | 165,497                     |  | $                | 26,621 |  | $     | 82,342  |  | $ | (10,998 | ) |  | $ | 97,965  |  
|                                                |  |                                |        |                                |   |                  |  |   |         |   |            |   |                             |  |                  |        |  |       |         |  |   |         |   |  |   |         |  

The Company does not account for, and does not report to management, its assets (other than
goodwill and other intangible assets for SFAS No. 142 reporting purposes) or capital expenditures by business segment. Foreign source revenues and long-lived assets located in foreign countries are not material to the consolidated results of
operations and financial position of the Company and are, therefore, not disclosed separately.



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NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)



NOTE 18.    Income Taxes

The Company reviews its annual tax rate on a quarterly basis and makes any necessary changes. The estimated annual tax rate may fluctuate due to changes
in forecasted annual operating income, changes in the jurisdictional mix of the forecasted annual operating income, positive or negative changes to the valuation allowance for net deferred tax assets, changes to actual or forecasted permanent book
to tax differences, impacts from future tax settlements with state or federal tax authorities or impacts from enacted tax law changes. The Company identifies items which are unusual and non-recurring in nature and treats these as discrete
events. The tax effect of discrete items is booked entirely in the quarter in which the discrete event occurs.

The Company has
unrecognized tax benefits, including interest, of approximately $4.4 million, net of federal tax effect, as of June 30, 2008. The Company believes that changes in the unrecognized tax benefits due to possible settlements in the next 12 months
will not have a material impact on the Companys effective tax rate. The Companys historical accounting policy with respect to interest and penalties related to tax uncertainties has been to classify these amounts as income taxes, and the
Company continued this classification upon the adoption of FIN No. 48. The total amount of interest related to tax uncertainties recognized in the condensed consolidated statements of income for the six-month period ended June 30, 2008 was
$0.1 million. The earliest tax year open to examination by the Internal Revenue Service and the other tax jurisdictions in which the Company files a tax return is 2003.

NOTE 19.    Commitments and Contingencies

Contractual Obligations

In connection with its operating activities, the Company enters into certain contractual obligations. The Companys material contractual cash
obligations include long-term debt, a technology services agreement, operating leases and other contracts. A summary of the Companys minimum required future cash payments associated with its contractual cash obligations outstanding as of
June 30, 2008, as well as an estimate of the timing in which these commitments are expected to expire, are set forth in the following table:



|                              |  |                        |        |      |   |        |  |      |        |      |   |            |  |       |        |  |   |        |  |   |        
|----------------------------- |  | ---------------------- | ------ | ---- | - | ------ |  | ---- | ------ | ---- | - | ---------- |  | ----- | ------ |  | - | ------ |  | - | -------
|                              |  | Payments Due by Period
|                              |  | 2008                   |        | 2009 |   | 2010   |  | 2011 |        | 2012 |   | Thereafter |  | Total
|                              |  | (in thousands)        
|Contractual Obligations       |  |                        |        |      |   |        |  |      |        |      |   |            |  |       |        |  |   |        |  |   |        
|Long-term debt principal      |  | $                      | 2,817  |      | $ | 2,817  |  | $    | 2,817  |      | $ | 7,739      |  | $     | 4,909  |  | $ | 59,182 |  | $ | 80,281 
|Long-term debt interest       |  |                        | 3,102  |      |   | 5,994  |  |      | 5,783  |      |   | 5,573      |  |       | 4,980  |  |   | 31,233 |  |   | 56,665 
|Services agreements1          |  |                        | 5,340  |      |   | 10,295 |  |      | 11,571 |      |   | 30,948     |  |       |       |  |   |       |  |   | 58,154 
|Operating leasesfacilities   |  |                        | 1,755  |      |   | 3,034  |  |      | 3,306  |      |   | 3,585      |  |       | 2,051  |  |   | 136    |  |   | 13,867 
|Operating leasesequipment    |  |                        | 930    |      |   | 1,408  |  |      | 540    |      |   |           |  |       |       |  |   |       |  |   | 2,878  
|Other long-term obligations   |  |                        | 917    |      |   | 1,041  |  |      | 967    |      |   | 800        |  |       | 800    |  |   | 5,247  |  |   | 9,772  
|                              |  |                        |        |      |   |        |  |      |        |      |   |            |  |       |        |  |   |        |  |   |        
|Total contractual obligations |  | $                      | 14,861 |      | $ | 24,589 |  | $    | 24,984 |      | $ | 48,645     |  | $     | 12,740 |  | $ | 95,798 |  | $ | 221,617
|                              |  |                        |        |      |   |        |  |      |        |      |   |            |  |       |        |  |   |        |  |   |        



|1 | Services agreements include required minimum payments in accordance with the Services Agreement (see Note 11). The Services Agreement has a ten-year term from the
launch date with rolling three-year extensions. Either party may elect to terminate the Services Agreement between the fifth and the sixth year anniversary of the first launch date upon written notice and payment of a termination fee. As a result,
the Companys current minimum obligation under the Services Agreement is for remaining payments through year five. As such, the Contractual Obligations table above sets forth the Companys minimum obligation remaining through year five,
including the related termination fee in the event the Company elects to terminate the Services Agreement. On July 18, 2008, the Company entered into an amendment to the
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| | Services Agreement in connection with the proposed merger (see Note 20). In addition, the services agreements category includes employment agreements as
filed with the SEC.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

As previously disclosed in Note 18, the Company has $4.4 million of unrecognized tax benefits as of
June 30, 2008. The Company is subject to periodic examinations of its income tax returns by the U.S. Internal Revenue Service and various state and local taxing authorities, which could result in future tax liabilities, the payment of which
would offset the current unrecognized tax benefits. Due to the uncertainty of the outcome of any future income tax examinations, it is not possible to estimate when tax payments, if any, would be made.

The Company occupies premises under leases, including a land lease, with various lessors that expire in 2008 through 2069. Rental expense for facilities
and the land lease amounted to $0.6 million and $0.7 million for three months ended June 30, 2008 and 2007, respectively, and $1.3 million for the six months ended June 30, 2008 and 2007. The lease commitments on the Companys
facilities include scheduled base rent increases over the terms of the leases. The base rent payments are being charged to expense on the straight-line method over the terms of the leases. The Company has recorded a deferred credit to reflect the
excess of rent expense over cash payments since inception of the leases.

The Company leases space to tenants in its headquarters facility.
For the three months ended June 30, 2008 and 2007, rents collected from these leases were $2.3 million and $2.2 million, respectively. For the six months ended June 30, 2008 and 2007, rents collected from these leases were $4.6 million and
$4.3 million, respectively. Rents collected are recorded in other revenue on the condensed consolidated statements of income. Future minimum rental income for the years 2008 through 2012 are as follows:



|           |  |                |       
|---------- |  | -------------- | ------
|           |  | (in thousands)
|2008       |  | $              | 3,340 
|2009       |  |                | 4,649 
|2010       |  |                | 4,461 
|2011       |  |                | 4,325 
|2012       |  |                | 4,306 
|Thereafter |  |                | 2,409 
|           |  |                |       
|Total      |  | $              | 23,490
|           |  |                |       

In 1994, the Company entered into a Letter of Intent with Battery Park City Authority
(BPCA), the New York City Economic Development Corporation (EDC) and the Empire State Development Corporation (ESDC) to construct a new trading facility and office building on a site in Battery Park City. By
agreement dated May 18, 1995, the EDC and ESDC agreed to provide funding of $128.7 million to construct the facility. The Company is liable for liquidated damages on a declining scale, currently set at $25.0 million, if it violates the terms of
the occupancy agreement at any time prior to the 15 years from the date of occupancy, July 7, 1997.

In May 1995, the Company signed a
ground lease (expiring June 2069) with BPCA for the site where it constructed its headquarters and trading facility. The lease establishes payments in lieu of taxes (PILOTs) due to New York City, as follows: for the trading portion of
the facility, PILOTs are entirely abated for the first 20 years after occupancy; for the office portion of the facility, PILOTs are entirely abated for one year after occupancy, at a percentage of assessment (ranging from 25% to 92.5%) for the next
10 years and, thereafter, at an amount equal to assessment. Space that is subleased is not eligible for abatements.

In 2002, the Company
entered into an agreement and received a $5.0 million grant from ESDC. This agreement requires the Company to maintain certain annual employment levels, and the grant is subject to recapture amounts, on a declining scale, over time.



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NYMEX HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)



The Company and the Board of Trade of the City of New York, Inc. (NYBOT) entered into a
lease agreement that became effective on November 20, 2002. In accordance with this lease agreement, NYBOT is leasing approximately 13,000 square feet on the COMEX Division trading floor and approximately 45,000 square feet of office space for
a ten-year term. The rent commencement date for the trading floor space and office space was July 1, 2003 and May 20, 2003, respectively. In 2007, NYBOT changed its corporate name to ICE Futures U.S., Inc.

In accordance with the DME shareholders agreement, the Company is required to contribute capital to the joint venture in an aggregate amount of $9.8
million over a five-year period, contingent upon the DMEs achievement of certain agreed upon performance targets. At June 30, 2008, the Company had contributed a total of $8.0 million.

Section 311(G) of the Bylaws of NYMEX Exchange provides for a revenue sharing arrangement
with the owners of Class A memberships in NYMEX Exchange in the event that either: (i) NYMEX Exchange determines to terminate permanently all open outcry floor trading for a specified list of products on the NYMEX Exchange and instead
lists such products for electronic trading only; or (ii) a shift occurs whereby at least 90% of the contract volume of such NYMEX Exchange product results from electronic trading. Once triggered for a particular product, the
obligation under the revenue sharing arrangement consists of the greater of the following amounts: (i) 10% of the gross NYMEX Exchange revenues attributable to all revenue from the electronic trading of such applicable NYMEX Exchange product,
but not including market data fees or revenues from bilateral transactions cleared through NYMEX ClearPort® Clearing (or its successor); or (ii) 100% of the revenue from any additional
special fee or surcharge that may be imposed by NYMEX Exchange on the transaction fees applicable to the electronic trading of such applicable NYMEX Exchange product. Once triggered, Bylaw Section 311(G) requires this revenue stream continue in
perpetuity or until NYMEX Exchange no longer lists such product for electronic trading. NYMEX Exchange has determined that a shift will have occurred for any applicable NYMEX Exchange product following the end of two consecutive fiscal
quarters in which, during each quarter, the average quarterly electronic trading volume has equaled or exceeded 90% of the contract volume in such product. Thereafter, revenues that are generated from the electronic trading of such product will
begin to accrue and will be paid to the owners of Class A memberships in NYMEX Exchange on a quarterly basis consistent with the financial reporting schedule of NYMEX Holdings. In accordance with the NYMEX Exchange Bylaws, such determination
may be subject to challenge by owners of Class A memberships in NYMEX Exchange through arbitration.

Financial Guarantees

The Company has certain guarantee arrangements in its clearing process as well as other financial guarantees discussed below:

Included in marketable securities are investments that are pledged as collateral with one of the Companys investment managers relating to a
membership seat financing program. Under this program, the investment manager extends credit to individuals purchasing NYMEX Division memberships. The program requires that the Company pledge assets to the investment manager in an amount equal to at
least 118% of the loan value. In the event a member defaults on a loan, the investment manager has the right to seize the Companys collateral for the amount of the default, and the Company has the right to liquidate the members interest
in NYMEX Division to reimburse its loss of collateral. At June 30, 2008, there were total seat loan balances of $3.1 million and securities pledged against the seat loan balances of $3.7 million.

The Company serves a clearinghouse function, standing as a financial intermediary on every open futures and options transaction cleared. Through its
clearinghouse, the Company maintains a system of guarantees for



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NYMEX HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)



performance of obligations owed to buyers and sellers. This system of guarantees is supported by several mechanisms, including margin deposits and guaranty
funds posted by clearing members with the Companys clearinghouse. The amount of margin deposits on hand will fluctuate over time as a result of, among other things, the extent of open positions held at any point in time by market participants
in NYMEX Division and COMEX Division contracts and the margin rates then in effect for such contracts. The Company is required, under the Commodity Exchange Act, to maintain separate accounts for cash and securities that are deposited by clearing
members, at banks approved by the Company, as margin for house and customer accounts. These clearing deposits are used by members to meet their obligations to the Company for margin requirements on open futures and options positions, as well as
delivery obligations.

The Company established additional retail customer protection supported by a commitment of at least $10 million
available at all times to promptly reimburse retail customers in the event that their clearing member defaults as a result of a default by another customer where margin funds from the retail customers account are used to address the default.
Retail customers are defined as those that do not otherwise qualify as eligible contract participants under the requirements of the Commodity Exchange Act, and are not floor traders or floor brokers on the Exchange or family members of
an Exchange floor trader or floor broker who maintains an account at the same clearing firm.

There were no events of default as of
June 30, 2008 and December 31, 2007, in any of the above arrangements, in which a liability should be recognized.

Legal Proceedings

In the ordinary course of business, the Company is a party to several lawsuits and claims. The Company periodically assesses its
liabilities and contingencies in connection with these matters, based upon the latest information available. As additional information becomes available, the Company adjusts its assessment and estimates of such liabilities accordingly. It is
possible that the ultimate resolution of its liabilities and contingencies could be at amounts that are different from any recorded reserves and that such differences could be material. Based on its review of the latest information available, the
Company believes its ultimate liability, if any, in connection with any current lawsuits or claims for pending or threatened legal proceedings, would not materially affect the Companys financial condition, results of operations, or cash flows.

Set forth below is a description of material litigation to which the Company is a party, as of June 30, 2008. Although there can be
no assurance as to the ultimate outcome, the Company believes it has a meritorious defense and is vigorously defending the matter described below. The final outcome of any litigation, however, cannot be predicted with certainty, and an adverse
resolution of this matter could have a material adverse effect on the Companys consolidated results of operations, financial position or cash flows.

The Company has been named as a defendant in the following legal actions:

In re NYMEX Shareholder Litigation,C.A. No. 3621-VCN

On March 17, 2008, Cataldo J. Capozza, a NYMEX Holdings shareholder and a former Class A
member of NYMEX Exchange commenced a putative class action in the Delaware Court of Chancery, on behalf of himself and all other NYMEX Holdings shareholders, against NYMEX Holdings, the members of its board of directors and CME Group. The complaint,
which is captioned Capozza v. NYMEX Holdings, Inc., et al.,C.A. No. 3621-VCN, and seeks to enjoin the Companys merger with CME Group (the Proposed Transaction), alleges, among



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NYMEX HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)



other things, that the directors breached their fiduciary duties to NYMEX Holdings shareholders by attempting to sell the Company for inadequate and
unfair consideration and pursuant to an inadequate and unfair process, and that CME Group aided and abetted such breaches. On April 21, 2008, NYMEX Holdings and its directors moved to dismiss the complaint and to stay all discovery pending the
disposition of the motion to dismiss. CME Group filed similar motions.

On April 14 and 15, 2008, respectively, two additional
putative class actions were commenced in the Delaware Court of Chancery by Polly Winters and Joan Haedrich, both purportedly NYMEX Holdings shareholders, on behalf of themselves and all other NYMEX Holdings shareholders, against NYMEX Holdings, the
members of its board of directors and CME Group. The Winters and Haedrich complaints contain allegations virtually identical to those in the Capozza action (discussed above).

On May 16, 2008, the Delaware Court of Chancery ordered that the three actions be consolidated under the caption In re NYMEX Shareholder
Litigation, C.A. No. 3621-VCN, and that all subsequently filed actions concerning the same subject matter be consolidated with them.

On June 20, 2008, Plaintiffs Capozza, Winters and Haedrich (Plaintiffs) filed an Amended and Consolidated Class Action Complaint (the Amended Complaint), along with a Motion for Expedited Proceedings (the
Motion to Expedite), in anticipation of a motion for a preliminary injunction to enjoin the Special Meetings of the shareholders of NYMEX Holdings and the NYMEX Exchange Class A members relating to the Proposed Transaction (the
Preliminary Injunction Motion). The Amended Complaint alleges that the Proposed Transaction resulted from an unfair and inadequate process and offers an inadequate price. The Amended Complaint further alleges that the preliminary Form
S-4 Registration Statement for the Proposed Transaction (which included a NYMEX Holdings/CME Group joint proxy statement/prospectus (the Preliminary Proxy)), filed on June 10, 2008 with the Securities and Exchange Commission, was
materially incomplete and misleading and omitted or misstated necessary information. By the Amended Complaint, Plaintiffs seek, among other things, an injunction preventing the consummation of the Proposed Transaction.

On June 27, 2008, Plaintiffs filed a Second Consolidated and Amended Class Action Complaint (the Second Amended Complaint) to correct
certain typographical errors in the Amended Complaint and to add CMEG NY Inc., the CME Group merger subsidiary created for purposes of the Proposed Transaction, as a defendant. On July 9, 2008, NYMEX Holdings and its directors moved to dismiss
the Second Amended Complaint. CME Group filed a similar motion.

On June 30, 2008, NYMEX Holdings and its directors and CME Group
filed oppositions to the Motion to Expedite. On July 11, 2008, the Court granted that motion, and discovery commenced. Subsequent thereto, the Court scheduled a hearing for August 13, 2008 for the Preliminary Injunction Motion.

On August 5, 2008, Plaintiffs agreed not to pursue the Preliminary Injunction Motion and the Court removed the August 13, 2008 hearing from
its calendar. This matter is otherwise ongoing. NYMEX Holdings and CME Group intend to defend vigorously against Plaintiffs allegations.



Greene v. NYMEX Holdings, Inc., et al.,C.A. No. 3835-VCN

On June 16, 2008, Shelby Greene, purportedly a NYMEX Holdings shareholder and a Class A member of NYMEX Exchange, commenced a putative class action in the Delaware Court of Chancery, on behalf of herself and
all other Class A members, against NYMEX Holdings, the members of its board of directors and CME Group. Like the Second Amended Complaint in the consolidated proceeding discussed above, the Greene



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NYMEX HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)



complaint also seeks to enjoin the Proposed Transaction on price, process and disclosure grounds. However, the price claim alleged in the Greenecomplaint focuses on the consideration to be received by the Class A members in connection with their membership interests in NYMEX Exchange. NYMEX Holdings and its directors filed a motion to dismiss the Greene complaint on
July 17, 2008. CME Group filed a similar motion.

On August 5, 2008, Ms. Greene, like Plaintiffs in the consolidated
proceeding discussed above, agreed not to pursue a preliminary injunction to enjoin the Special Meetings of the shareholders of NYMEX Holdings and NYMEX Exchange Class A members relating to the Proposed Transaction, and the Court removed the
August 13, 2008 hearing from its calendar. This matter is otherwise ongoing. NYMEX Holdings and CME Group intend to defend vigorously against these allegations.

NOTE 20.    Subsequent Events

On July 18, 2008, the Company, CME Group,
CMEG NY Inc., a wholly-owned subsidiary of CME Group, and NYMEX Exchange entered into Amendment No. 2 (the Second Merger Amendment) to the Agreement and Plan of Merger, dated as of March 17, 2008 and amended as of June 30,
2008, by and among such parties, pursuant to which the Company would merge with and into CMEG NY Inc. (the Merger), with CMEG NY Inc. continuing as the surviving company and as a wholly-owned subsidiary of CME Group.

Pursuant to the terms of the Second Merger Amendment, each owner of record of a NYMEX Class A membership as of the close of business on the closing
date of the Merger who executes and delivers a waiver and release within 60 days following the closing date of the Merger will receive $750,000 with respect to each NYMEX Class A membership owned of record. The exchange ratio and cash
consideration offered to the Companys stockholders pursuant to the terms of the Merger Agreement remained unchanged.

The Second
Merger Amendment also provides that NYMEX Class A members will retain the right to use or lease their memberships for NYMEX Exchange open outcry and electronic trading purposes, the number of NYMEX Class A memberships will be limited to
816 and the NYMEX Exchange seat market will be preserved. Substantially all other rights of the NYMEX Class A members, including the revenue sharing rights contained in Section 311(G) of the NYMEX Exchange bylaws, will be eliminated and
replaced with certain commitments, including (a) maintenance of the NYMEX Exchange trading floor in New York until at least December 31, 2012, (b) maintenance of fee differentials between NYMEX Class A members and non-members and
account-based rates and (c) establishment of certain clearing firm requirements. These changes will be implemented pursuant to amendments to NYMEX Exchanges current certificate of incorporation and bylaws, which will require the
affirmative vote of owners of 75% of the outstanding NYMEX Class A memberships.

The Second Merger Amendment also provides for the
reduction of (a) certain change in control severance payments and tax gross-up payments payable to certain Company executives in connection with the consummation of the Merger pursuant to the Companys Change in Control Severance Plan and
(b) certain other merger-related expenses, totaling $30 million in the aggregate.

Also on July 18, 2008, NYMEX Exchange and CME
announced that they have amended the terms of their technology services agreement, dated as of April 6, 2006 (the Services Agreement). Pursuant to the terms of the amendment (the Amendment), the term of the Services
Agreement may, at the option of CME, be extended for an additional two years. In addition, the mid-term termination right provided in the Services Agreement, which allowed either party to terminate the agreement during the time period between
June 11, 2011 and June 11, 2012, has been delayed until the time period between June 11, 2012 and June 11, 2013.



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The Amendment will only be effective (i) following the special meeting of NYMEX Holdings
stockholders to be held in connection with the Merger, pursuant to the Merger Agreement, or (ii) in the event that the special meeting of the Companys stockholders to be held in connection with the Merger is not held as a result of a
breach of the Merger Agreement by the Company, immediately after such breach.

All other terms of the Services Agreement remain in effect
without modification.

On July 31, 2008, the Company announced that its board of directors approved a quarterly dividend of $0.10 per
common share to stockholders of record as of August 15, 2008 that will be payable on September 15, 2008.



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|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations
|------- | -------------------------------------------------------------------------------------

Business Overview

The Company provides
facilities to buy, sell and clear energy, precious and base metals, soft and other commodities for future delivery under rules intended to protect the interests of market participants. The Company provides liquid marketplaces where physical
commodity market participants can manage future price risk and, through the Companys clearing operations, mitigate counterparty credit risk. Through real-time and delayed dissemination of its transaction prices, the Company provides price
discovery and transparency to market participants. In order to enhance its markets and provide market participants additional mechanisms to manage risk, the Company continuously offers new products, distribution services and clearing services. The
Company does not own commodities, trade for its own account, or otherwise engage in market activities.

The NYMEX Division provides a
marketplace for trading energy futures and options. The COMEX Division provides a marketplace for trading precious and base metals futures and options. NYMEX Divisions principal markets include crude oil, natural gas, heating oil and gasoline.
COMEX Divisions principal markets include gold, silver and high grade copper. In addition, the Company offers soft commodities futures contracts for coffee, sugar, cocoa and cotton. The Company provides the physical facilities for open outcry
auction markets. The open outcry markets operate during regular business hours, and trading activities in these markets are, for purposes of this management discussion, referred to as floor trading.

The Company provides trade-clearing services for all transactions executed through its floor
trading operations and its NYMEX ClearPort® Trading electronic trading platform, and for all Company product transactions executed on the CME Globex® electronic trading platform (CME Globex). In addition, through NYMEX ClearPort® Clearing, an over-the-counter (OTC) clearing
initiative, the Company alleviates some of the credit issues in the marketplace by providing the usage of the Companys clearing operations to offer market participants the advantages of reducing costs and permitting futures and OTC positions
to be offset. This initiative permits market participants to negotiate bilateral trades in the OTC market, which are then transferred to the Companys division as futures contracts for clearing.

In order to conduct floor-trading activities, market participants must own or lease a membership on the NYMEX Division or COMEX Division. Non-members may
execute floor trades on the Companys divisions, but must do so through a member. In addition, the Company makes available its product slate for electronic trading on CME Globex nearly 24 hours a day and five days per week to market
participants who have a clearing relationship with a Company clearing member.

Certain NYMEX Division and COMEX Division members are clearing members. Clearing members provide capital to support the Companys clearing activities. All market participants trading through the Companys floor trading or trading
Company products through CME Globex must have a clearing relationship with a clearing member who will clear their trades through the Companys clearinghouse. Market participants must have similar clearing member relationships to use NYMEX
ClearPort® Clearing.

The Companys principal sources of revenues are
clearing and transaction fees derived from trades executed on its divisions, and/or cleared through its clearinghouse, and fees charged for the Companys proprietary futures and options contract price information.

Clearing and transaction fees are dependent primarily upon the volume of trading activity conducted on the Companys divisions and cleared by the
Companys clearinghouse. These volumes are impacted by several factors, including:



| |  |  | National and international economic and political conditions;
| | - |  | -------------------------------------------------------------



| |  |  | Volatility in price levels of the underlying commodities;
| | - |  | ---------------------------------------------------------



| |  |  | Market perception of stability in commodities and financial markets;
| | - |  | --------------------------------------------------------------------



| |  |  | The level and volatility of interest rates and inflation;
| | - |  | ---------------------------------------------------------



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| |  |  | Credit quality of market participants; and
| | - |  | ------------------------------------------



| |  |  | Weather conditions affecting certain energy commodities.
| | - |  | --------------------------------------------------------

The relative proportions of member and non-member trading activities, and the trading venues on which market participants trade also impact the levels of clearing and transaction fees. NYMEX Division and COMEX
Division members are afforded more favorable transaction pricing than non-members, and are eligible to participate in certain transaction fee and cost reduction programs, which impact the level of clearing and transaction fees and other revenues.

Market data relating to proprietary prices of contracts executed on the Companys divisions are sold to vendors who redistribute this
information to market participants and others. The level of market data fees is dependent upon the number of vendors and the number of end users receiving data through the vendor redistribution process. The Company relies on its market data vendors
to supply accurate information regarding the number of subscribers that are accessing the Companys market data.

The Companys
expenses consist primarily of direct transaction costs, employee compensation and benefits and the cost of facilities, equipment, software and communications to support the Companys trading and clearing operations. The Company also incurs
marketing costs associated with the development and launch of new products and services. The Company continually invests in technology and infrastructure to support market expansion, enhance its trading and clearing technology, and develop new
products and services.

Recent Developments

On July 18, 2008, the Company, CME Group, CMEG NY Inc., a wholly-owned subsidiary of CME Group, and NYMEX Exchange entered into Amendment No. 2 (the Second Merger Amendment) to the Agreement and
Plan of Merger, dated as of March 17, 2008 and amended as of June 30, 2008, by and among such parties, pursuant to which the Company would merge with and into CMEG NY Inc. (the Merger), with CMEG NY Inc. continuing as the
surviving company and as a wholly-owned subsidiary of CME Group.

Pursuant to the terms of the Second Merger Amendment, each owner of
record of a NYMEX Class A membership as of the close of business on the closing date of the Merger who executes and delivers a waiver and release within 60 days following the closing date of the Merger will receive $750,000 with respect to each
NYMEX Class A membership owned of record. The exchange ratio and cash consideration offered to the Companys stockholders pursuant to the terms of the Merger Agreement remained unchanged.

The Second Merger Amendment also provides that NYMEX Class A members will retain the right to use or lease their memberships for NYMEX Exchange open
outcry and electronic trading purposes, the number of NYMEX Class A memberships will be limited to 816 and the NYMEX Exchange seat market will be preserved. Substantially all other rights of the NYMEX Class A members, including the revenue
sharing rights contained in Section 311(G) of the NYMEX Exchange bylaws, will be eliminated and replaced with certain commitments, including (a) maintenance of the NYMEX Exchange trading floor in New York until at least December 31,
2012, (b) maintenance of fee differentials between NYMEX Class A members and non-members and account-based rates and (c) establishment of certain clearing firm requirements. These changes will be implemented pursuant to amendments to
NYMEX Exchanges current certificate of incorporation and bylaws, which will require the affirmative vote of owners of 75% of the outstanding NYMEX Class A memberships.

The Second Merger Amendment also provides for the reduction of (a) certain change in control severance payments and tax gross-up payments payable to
certain Company executives in connection with the consummation of the Merger pursuant to the Companys Change in Control Severance Plan and (b) certain other merger-related expenses, totaling $30 million in the aggregate.

Also on July 18, 2008, NYMEX Exchange and CME announced that they have amended the terms of their technology services agreement, dated as of
April 6, 2006 (the Services Agreement). Pursuant to the terms of the amendment (the Amendment), the term of the Services Agreement may, at the option of CME, be extended for an additional two years. In addition, the
mid-term termination right provided in the Services Agreement, which allowed either party to terminate the agreement during the time period between June 11, 2011 and June 11, 2012, has been delayed until the time period between
June 11, 2012 and June 11, 2013.



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The Company has incurred $9.6 million of merger-related expenses, of which approximately $7.7 million are
considered non-deductible for income tax purposes. These expenses consist primarily of professional fees and are recorded in Other expenses in the condensed consolidated statements of income. Certain numbers and percentages in this
Managements Discussion and Analysis of Financial Condition and Results of Operations are presented excluding these merger-related expenses and are considered non-GAAP (generally accepted accounting principles) financial data. The Company
believes that this non-GAAP financial data is useful to assist investors in gaining an understanding of the trends and operating results of the Companys business. This non-GAAP financial data should be viewed in addition to, and not in lieu
of, the Companys reported results under U.S. GAAP.

Regulation G Reconciliation of Non-GAAP Financial Measures

In evaluating its financial performance, the Company reviews operating results from operations, which excludes non-operating charges. Pro-forma earnings
per share are a non-GAAP performance measure, but the Company believes that it is useful to assist investors in gaining an understanding of the trends and operating results for its core business. Pro-forma earnings per share should be viewed in
addition to, and not in lieu of, the reported results under U.S. GAAP. The following is a reconciliation of U.S. GAAP results to pro forma results for the periods presented:



|                           |  |                                        |         |              |   |         |                                        |  |                                        |         |  |              |         |                                        |  |   |        |  |   |        
|-------------------------- |  | -------------------------------------- | ------- | ------------ | - | ------- | -------------------------------------- |  | -------------------------------------- | ------- |  | ------------ | ------- | -------------------------------------- |  | - | ------ |  | - | -------
|                           |  | U.S. GAAPThree MonthsEndedJune 30,2008 |         | Adjustments1 |   |         | Pro-FormaThree MonthsEndedJune 30,2008 |  | U.S. GAAPThree MonthsEndedJune 30,2007 |         |  | Adjustments1 |         | Pro-FormaThree MonthsEndedJune 30,2007
|Operating income           |  | $                                      | 139,344 |              | $ | 1,666   |                                        |  | $                                      | 141,010 |  | $            | 97,487  |                                        |  | $ |       |  | $ | 97,487 
|Non-operating income       |  |                                        | 30,847  |              |   | (30,641 | )                                      |  |                                        | 206     |  |              | (23,472 | )                                      |  |   | 25,962 |  |   | 2,490  
|                           |  |                                        |         |              |   |         |                                        |  |                                        |         |  |              |         |                                        |  |   |        |  |   |        
|Income before provision    |  |                                        |         |              |   |         |                                        |  |                                        |         |  |              |         |                                        |  |   |        |  |   |        
|for income taxes           |  |                                        | 170,191 |              |   | (28,975 | )                                      |  |                                        | 141,216 |  |              | 74,015  |                                        |  |   | 25,962 |  |   | 99,977 
|Provision for income taxes |  |                                        | 75,879  |              |   | (13,278 | )                                      |  |                                        | 62,601  |  |              | 32,270  |                                        |  |   | 11,319 |  |   | 43,589 
|                           |  |                                        |         |              |   |         |                                        |  |                                        |         |  |              |         |                                        |  |   |        |  |   |        
|Net income                 |  | $                                      | 94,312  |              | $ | (15,697 | )                                      |  | $                                      | 78,615  |  | $            | 41,745  |                                        |  | $ | 14,643 |  | $ | 56,388 
|                           |  |                                        |         |              |   |         |                                        |  |                                        |         |  |              |         |                                        |  |   |        |  |   |        
|Earnings per Share:        |  |                                        |         |              |   |         |                                        |  |                                        |         |  |              |         |                                        |  |   |        |  |   |        
|Basic                      |  | $                                      | 0.99    |              | $ | (0.16   | )                                      |  | $                                      | 0.83    |  | $            | 0.44    |                                        |  | $ | 0.16   |  | $ | 0.60   
|Diluted                    |  | $                                      | 0.99    |              | $ | (0.16   | )                                      |  | $                                      | 0.83    |  | $            | 0.44    |                                        |  | $ | 0.15   |  | $ | 0.59   
|                           |  |                                        |         |              |   |        
|                           |  | U.S. GAAPSix MonthsEndedJune 30,2008   |         | Adjustments1 |   |         | Pro-FormaSix MonthsEndedJune 30,2008   |  | U.S. GAAPSix MonthsEndedJune 30,2007   |         |  | Adjustments1 |         | Pro-FormaSix MonthsEndedJune 30,2007  
|Operating income           |  | $                                      | 272,232 |              | $ | 9,591   |                                        |  | $                                      | 281,823 |  | $            | 193,199 |                                        |  | $ |       |  | $ | 193,199
|Non-operating income       |  |                                        | 32,385  |              |   | (30,641 | )                                      |  |                                        | 1,744   |  |              | (19,503 | )                                      |  |   | 25,962 |  |   | 6,459  
|                           |  |                                        |         |              |   |         |                                        |  |                                        |         |  |              |         |                                        |  |   |        |  |   |        
|Income before provision    |  |                                        |         |              |   |         |                                        |  |                                        |         |  |              |         |                                        |  |   |        |  |   |        
|for income taxes           |  |                                        | 304,617 |              |   | (21,050 | )                                      |  |                                        | 283,567 |  |              | 173,696 |                                        |  |   | 25,962 |  |   | 199,658
|Provision for income taxes |  |                                        | 139,120 |              |   | (12,758 | )                                      |  |                                        | 126,362 |  |              | 75,731  |                                        |  |   | 11,319 |  |   | 87,050 
|                           |  |                                        |         |              |   |         |                                        |  |                                        |         |  |              |         |                                        |  |   |        |  |   |        
|Net income                 |  | $                                      | 165,497 |              | $ | (8,292  | )                                      |  | $                                      | 157,205 |  | $            | 97,965  |                                        |  | $ | 14,643 |  | $ | 112,608
|                           |  |                                        |         |              |   |         |                                        |  |                                        |         |  |              |         |                                        |  |   |        |  |   |        
|Earnings per Share:        |  |                                        |         |              |   |         |                                        |  |                                        |         |  |              |         |                                        |  |   |        |  |   |        
|Basic                      |  | $                                      | 1.75    |              | $ | (0.09   | )                                      |  | $                                      | 1.66    |  | $            | 1.04    |                                        |  | $ | 0.16   |  | $ | 1.20   
|Diluted                    |  | $                                      | 1.74    |              | $ | (0.08   | )                                      |  | $                                      | 1.66    |  | $            | 1.03    |                                        |  | $ | 0.15   |  | $ | 1.18   



32



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|1 | The adjustment to operating income is related to the merger-related expenses incurred in connection with the proposed merger with CME Group as discussed above in the
Recent Developments section. The adjustments to non-operating income are related to a realized gain on the Companys investment in Bourse de Montréal, Inc. and impairment losses in Optionable Inc. as discussed below in the
Results of Operations section.
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Note Regarding Forward-Looking Statements

The Company may, in discussions of its future plans, objectives and expected performance in periodic reports filed by the Company with the Securities and
Exchange Commission (or documents incorporated by reference therein) and in written and oral presentations made by the Company, include projections or other forward-looking statements within the meaning of Section 27A of the Securities Act of
1933 or Section 21E of the Securities Exchange Act of 1934, as amended (the 1934 Act). Such projections and forward-looking statements are based on assumptions, which the Company believes are reasonable but are, by their nature,
inherently uncertain. Some of the important factors that could cause actual results to differ from any such projections or other forward-looking statements are discussed below, and in other reports filed by the Company under the 1934 Act, including
in the Companys December 31, 2007 Annual Report on Form 10-K. The Companys forward-looking statements are based on information available to the Company as of the date hereof, and except as required by law, the Company undertakes no
obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise. Actual results and experience may differ materially from forward-looking statements as a result of many factors, including:
changes in general economic and industry conditions in various markets in which the Companys contracts are traded; increased competitive activity; fluctuations in prices of the underlying commodities as well as for trading floor administrative
expenses related to the trading and clearing of contracts; the ability to control costs and expenses; changes to legislation or regulations; protection and validity of the Companys intellectual property rights and rights licensed from others;
the Companys ability to satisfy the closing conditions for the Companys proposed merger with CME Group and the Companys ability to realize the benefits and control the costs of the proposed transaction; and other unanticipated
events and conditions. It is not possible for the Company to foresee or identify all such factors.

Results of Operations

Net income for the three months ended June 30, 2008 was $94.3 million, an increase of $52.6 million or 126% compared to the same period last year.
Included in this amount is a one-time net pretax gain of $30.6 million, consisting of approximately $33.8 million gain on the investment in Bourse de Montréal, Inc. (Montréal Exchange) and an impairment loss of $3.2 million
on the Companys remaining investment in Optionable Inc. (Optionable), or $15.7 million on an after tax basis. In the second quarter of 2007, the Company initially recorded an impairment loss in Optionable of $26.0 million on a
pretax basis or $14.6 million on an after-tax basis. Excluding the gain on the investment in the Montréal Exchange and the impairment losses in Optionable, net income for the three months ended June 30, 2008 was $78.6 million, an
increase of $22.2 million or 40% from the same period last year. This increase was the result of operating revenues increasing by $47.2 million, which was partially offset by increases in operating expenses and income taxes of $3.7 million and $19.0
million, respectively, and a decrease in non-operating income of $2.3 million.

For the six months ended June 30, 2008, net income was
$165.5 million, an increase of $67.5 million or 69% compared to the same period last year. Excluding the gain on the investment in the Montréal Exchange and the impairment losses in Optionable, net income for the six months ended
June 30, 2008 was $157.2 million, an increase of $44.6 million or 40% from the same period last year. This increase was the result of operating revenues increasing by $91.9 million, which was partially offset by increases in operating expenses
and income taxes of $3.3 million and $39.3 million, respectively, and a decrease in non-operating income of $4.7 million.

The increase in
operating revenues for both the three- and six-month periods were due to an increase in gross clearing and transaction fees as a result of higher trading and clearing volumes. The increase in operating expenses was due primarily to the legal and
advisory services related to the Merger Agreement for the three and



33



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six months ended June 30, 2008. Direct transaction costs, which are directly associated with higher clearing and transaction volume, also contributed to
the increase. The decrease in non-operating income was due primarily to a change in the asset type that comprises the Companys investment portfolio.

Volumes

Provided below is a summary of total volume traded and/or
cleared and open interest on the Companys three significant components of trading and clearing operations: (i) NYMEX Division; (ii) COMEX Division; and (iii) NYMEX ClearPort® Clearing. NYMEX Division and COMEX Division information presented excludes contracts cleared through NYMEX ClearPort® Clearing. Trading and clearing volumes discussed in this
managements discussion and analysis are expressed as round-turns, which are matched buys and sells of the underlying contracts. Trading and clearing volumes include futures settlement and options exercise transactions, as well as
cash settlement transactions for contracts cleared on NYMEX ClearPort® Clearing, for which transaction fees are assessed. Open interest represents the number of contracts at June 30,
2008 for which clearing members and their customers are obligated to the Companys clearinghouse and are required to make or take future delivery of the physical commodity (or in certain cases be settled in cash), or close out the position with
an offsetting sale or purchase prior to contract expiration. Options open interest represents unexpired, unexercised option contracts.

NYMEX Division

For the three months ended June 30, 2008, the volume of futures and options contracts traded and cleared on the NYMEX Division was
75.1 million contracts, an increase of 16.1 million contracts or 27%, compared to 59.0 million contracts for the same period last year. Futures contract volume was 61.3 million contracts, an increase of 13.0 million
contracts or 27%, compared to 48.3 million contracts for the same period last year. Options contract volume was 13.8 million contracts, an increase of 3.1 million contracts or 28%, compared to 10.7 million contracts for the same
period last year.

For the six months ended June 30, 2008, the volume of futures and options contracts traded and cleared on the NYMEX
Division was 144.7 million contracts, an increase of 26.3 million contracts or 22%, compared to 118.4 million contracts for the same period last year. Futures contract volume was 118.0 million contracts, an increase of
20.8 million contracts or 22%, compared to 97.2 million contracts for the same period last year. Options contract volume was 26.6 million contracts, an increase of 5.4 million contracts or 26%, compared to 21.2 million
contracts for the same period last year.

The following tables set forth trading and clearing volumes and open interest for the
Companys energy futures and options products:

NYMEX Division Contracts Traded and Cleared

For the Three Months Ended June 30,



|            |  |                |  |         |  |        |  |         |  |         |  |       
|----------- |  | -------------- |  | ------- |  | ------ |  | ------- |  | ------- |  | ------
|            |  | 2008           |  | 2007   
|            |  | Futures        |  | Options |  | Total  |  | Futures |  | Options |  | Total 
|            |  | (in thousands)
|Crude oil   |  | 40,231         |  | 10,591  |  | 50,822 |  | 30,225  |  | 7,102   |  | 37,327
|Natural gas |  | 10,037         |  | 2,549   |  | 12,586 |  | 7,601   |  | 3,037   |  | 10,638
|Heating oil |  | 5,041          |  | 266     |  | 5,307  |  | 4,375   |  | 127     |  | 4,502 
|Gasoline    |  | 5,712          |  | 358     |  | 6,070  |  | 5,815   |  | 452     |  | 6,267 
|Other       |  | 306            |  | 14      |  | 320    |  | 278     |  | 22      |  | 300   
|            |  |                |  |         |  |        |  |         |  |         |  |       
|Total       |  | 61,327         |  | 13,778  |  | 75,105 |  | 48,294  |  | 10,740  |  | 59,034
|            |  |                |  |         |  |        |  |         |  |         |  |       



34



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NYMEX Division Contracts Traded and Cleared

For the Six Months Ended June 30,



|            |  |                |  |         |  |         |  |         |  |         |  |        
|----------- |  | -------------- |  | ------- |  | ------- |  | ------- |  | ------- |  | -------
|            |  | 2008           |  | 2007   
|            |  | Futures        |  | Options |  | Total   |  | Futures |  | Options |  | Total  
|            |  | (in thousands)
|Crude oil   |  | 75,828         |  | 20,407  |  | 96,235  |  | 62,355  |  | 15,122  |  | 77,477 
|Natural gas |  | 20,048         |  | 5,087   |  | 25,135  |  | 15,364  |  | 5,134   |  | 20,498 
|Heating oil |  | 10,092         |  | 499     |  | 10,591  |  | 8,952   |  | 311     |  | 9,263  
|Gasoline    |  | 11,307         |  | 617     |  | 11,924  |  | 9,996   |  | 643     |  | 10,639 
|Other       |  | 754            |  | 39      |  | 793     |  | 492     |  | 22      |  | 514    
|            |  |                |  |         |  |         |  |         |  |         |  |        
|Total       |  | 118,029        |  | 26,649  |  | 144,678 |  | 97,159  |  | 21,232  |  | 118,391
|            |  |                |  |         |  |         |  |         |  |         |  |        

NYMEX Division Contracts Open Interests

At June 30,



|            |  |                |  |         |  |       |  |         |  |         |  |      
|----------- |  | -------------- |  | ------- |  | ----- |  | ------- |  | ------- |  | -----
|            |  | 2008           |  | 2007   
|            |  | Futures        |  | Options |  | Total |  | Futures |  | Options |  | Total
|            |  | (in thousands)
|Crude oil   |  | 1,510          |  | 5,144   |  | 6,654 |  | 1,570   |  | 3,553   |  | 5,123
|Natural gas |  | 978            |  | 998     |  | 1,976 |  | 807     |  | 1,315   |  | 2,122
|Heating oil |  | 226            |  | 104     |  | 330   |  | 237     |  | 49      |  | 286  
|Gasoline    |  | 254            |  | 117     |  | 371   |  | 183     |  | 97      |  | 280  
|Other       |  | 47             |  | 4       |  | 51    |  | 33      |  |        |  | 33   
|            |  |                |  |         |  |       |  |         |  |         |  |      
|Total       |  | 3,015          |  | 6,367   |  | 9,382 |  | 2,830   |  | 5,014   |  | 7,844
|            |  |                |  |         |  |       |  |         |  |         |  |      

The Company believes the overall growth in total futures and options energy contracts traded and
cleared on the NYMEX Division for the three- and six-month periods ended June 30, 2008 were due primarily to the following factors:



| |  |  | Continued strong global demand for crude oil, natural gas, heating oil and gasoline;
| | - |  | ------------------------------------------------------------------------------------



| |  |  | Global economic uncertainty and tightness in international supply and demand, combined with a weak U.S. dollar impacted both oil prices as well as volatility of
prices and volumes;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Unrest in Nigeria and other oil producing countries in Africa, South America and the Middle East heightened concerns over the reliability of oil exports from such
countries;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | A steady increase in the price of gasoline largely due to increases in the price of crude oil;
| | - |  | ----------------------------------------------------------------------------------------------



| |  |  | A steady increase in demand for natural gas due to moderately colder winter temperatures as compared to last year; and increases in natural gas prices overseas
which, combined with the weaker dollar, resulted in reducing imports of liquefied natural gas to the U.S.; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Increased acceptance and accessibility of electronic trading.
| | - |  | -------------------------------------------------------------

All of these factors impact the volatility of the commodities which, in turn, increases trading activity.

COMEX
Division

For the three months ended June 30, 2008, the volume of futures and options contracts traded and cleared on the COMEX
Division was 14.1 million contracts, an increase of 4.6 million contracts or 49%, compared to 9.5 million contracts for the same period last year. Futures contract volume was 12.5 million contracts, an



35



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increase of 4.2 million contracts or 50%, compared to 8.3 million contracts for the same period last year. Options contract volume was
1.6 million contracts, an increase of 0.4 million contracts or 42%, compared to 1.2 million contracts for the same period last year.

For the six months ended June 30, 2008, the volume of futures and options contracts traded and cleared on the COMEX Division was 30.5 million contracts, an increase of 11.6 million contracts or 62%, compared to
18.9 million contracts for the same period last year. Futures contract volume was 27.0 million contracts, an increase of 10.6 million contracts or 65%, compared to 16.4 million contracts for the same period last year. Options
contract volume was 3.5 million contracts, an increase of 1.0 million contracts or 41%, compared to 2.5 million contracts for the same period last year.

The following tables set forth trading and clearing volumes and open interest for the Companys major metals futures and options products:

COMEX Division Contracts Traded and Cleared

For the Three Months Ended
June 30,



|                  |  |                |  |         |  |        |  |         |  |         |  |      
|----------------- |  | -------------- |  | ------- |  | ------ |  | ------- |  | ------- |  | -----
|                  |  | 2008           |  | 2007   
|                  |  | Futures        |  | Options |  | Total  |  | Futures |  | Options |  | Total
|                  |  | (in thousands)
|Gold              |  | 8,827          |  | 1,110   |  | 9,937  |  | 5,448   |  | 817     |  | 6,265
|Silver            |  | 2,374          |  | 521     |  | 2,895  |  | 1,771   |  | 323     |  | 2,094
|High grade copper |  | 1,291          |  | 5       |  | 1,296  |  | 1,086   |  | 12      |  | 1,098
|Aluminum          |  |               |  |        |  |       |  |        |  |        |  |     
|                  |  |                |  |         |  |        |  |         |  |         |  |      
|Total             |  | 12,492         |  | 1,636   |  | 14,128 |  | 8,305   |  | 1,152   |  | 9,457
|                  |  |                |  |         |  |        |  |         |  |         |  |      

COMEX Division Contracts Traded and Cleared

For the Six Months Ended June 30,



|                  |  |                |  |         |  |        |  |         |  |         |  |       
|----------------- |  | -------------- |  | ------- |  | ------ |  | ------- |  | ------- |  | ------
|                  |  | 2008           |  | 2007   
|                  |  | Futures        |  | Options |  | Total  |  | Futures |  | Options |  | Total 
|                  |  | (in thousands)
|Gold              |  | 19,575         |  | 2,397   |  | 21,972 |  | 11,207  |  | 1,839   |  | 13,046
|Silver            |  | 5,008          |  | 1,073   |  | 6,081  |  | 3,238   |  | 612     |  | 3,850 
|High grade copper |  | 2,407          |  | 15      |  | 2,422  |  | 1,954   |  | 21      |  | 1,975 
|Aluminum          |  |               |  |        |  |       |  | 1       |  |        |  | 1     
|                  |  |                |  |         |  |        |  |         |  |         |  |       
|Total             |  | 26,990         |  | 3,485   |  | 30,475 |  | 16,400  |  | 2,472   |  | 18,872
|                  |  |                |  |         |  |        |  |         |  |         |  |       

COMEX Division Contracts Open Interests

At June 30,



|                  |  |                |  |         |  |       |  |         |  |         |  |      
|----------------- |  | -------------- |  | ------- |  | ----- |  | ------- |  | ------- |  | -----
|                  |  | 2008           |  | 2007   
|                  |  | Futures        |  | Options |  | Total |  | Futures |  | Options |  | Total
|                  |  | (in thousands)
|Gold              |  | 429            |  | 448     |  | 877   |  | 377     |  | 337     |  | 714  
|Silver            |  | 126            |  | 147     |  | 273   |  | 117     |  | 102     |  | 219  
|High grade copper |  | 109            |  | 2       |  | 111   |  | 79      |  | 2       |  | 81   
|Aluminum          |  |               |  |        |  |      |  |        |  |        |  |     
|                  |  |                |  |         |  |       |  |         |  |         |  |      
|Total             |  | 664            |  | 597     |  | 1,261 |  | 573     |  | 441     |  | 1,014
|                  |  |                |  |         |  |       |  |         |  |         |  |      



36



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The Company believes the increases in futures and options metals contracts traded and cleared on the
COMEX Division for the three-and six-month periods ended June 30, 2008 were due primarily to the following factors:



| |  |  | Increased inflation;
| | - |  | --------------------



| |  |  | A weakened U.S. currency compared to other international currencies;
| | - |  | --------------------------------------------------------------------



| |  |  | An increase in the volatility of all metals;
| | - |  | --------------------------------------------



| |  |  | A decrease in copper inventories;
| | - |  | ---------------------------------



| |  |  | An increase in precious metals inventories; and
| | - |  | -----------------------------------------------



| |  |  | An increase in price levels for all metals, particularly gold.
| | - |  | --------------------------------------------------------------

All of these factors impact the volatility of the commodities which, in turn, increases trading activity.

NYMEX ClearPort® Clearing

For the three months ended June 30, 2008, the volume of futures and options contracts cleared
on NYMEX ClearPort® Clearing was 26.7 million contracts, an increase of 7.3 million contracts or 38%, compared to 19.4 million contracts for the same period last year.
Futures contract volume was 17.7 million contracts, an increase of 5.9 million contracts or 49%, compared to 11.8 million contracts for the same period last year. Options contract volume was 9.0 million contracts, an increase of
1.4 million contracts or 19%, compared to 7.6 million contracts for the same period last year.

For the six months ended June 30, 2008, the volume of futures and options contracts cleared on NYMEX ClearPort® Clearing was 54.8 million
contracts, an increase of 11.8 million contracts or 28%, compared to 43.0 million contracts for the same period last year. Futures contract volume was 35.7 million contracts, an increase of 9.7 million contracts or 38%, compared
to 26.0 million contracts for the same period last year. Options contract volume was 19.1 million contracts, an increase of 2.1 million contracts or 12%, compared to 17.0 million contracts for the same period last year.

The following tables set forth clearing volumes for products cleared through NYMEX
ClearPort® Clearing:

NYMEX ClearPort® Clearing Contracts

For the Three Months
Ended June 30,



|            |  |                |  |         |  |        |  |         |  |         |  |       
|----------- |  | -------------- |  | ------- |  | ------ |  | ------- |  | ------- |  | ------
|            |  | 2008           |  | 2007   
|            |  | Futures        |  | Options |  | Total  |  | Futures |  | Options |  | Total 
|            |  | (in thousands)
|Natural gas |  | 15,498         |  | 6,306   |  | 21,804 |  | 10,808  |  | 6,606   |  | 17,414
|Electricity |  | 145            |  | 117     |  | 262    |  | 152     |  | 100     |  | 252   
|Petroleum   |  | 1,928          |  | 2,605   |  | 4,533  |  | 459     |  | 757     |  | 1,216 
|Coal        |  | 45             |  |        |  | 45     |  | 29      |  |        |  | 29    
|Other       |  | 67             |  | 15      |  | 82     |  | 392     |  | 141     |  | 533   
|            |  |                |  |         |  |        |  |         |  |         |  |       
|Total       |  | 17,683         |  | 9,043   |  | 26,726 |  | 11,840  |  | 7,604   |  | 19,444
|            |  |                |  |         |  |        |  |         |  |         |  |       



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NYMEX ClearPort® Clearing Contracts

For the Six Months Ended June 30,



|            |  |                |  |         |  |        |  |         |  |         |  |       
|----------- |  | -------------- |  | ------- |  | ------ |  | ------- |  | ------- |  | ------
|            |  | 2008           |  | 2007   
|            |  | Futures        |  | Options |  | Total  |  | Futures |  | Options |  | Total 
|            |  | (in thousands)
|Natural gas |  | 31,685         |  | 14,012  |  | 45,697 |  | 24,249  |  | 15,195  |  | 39,444
|Electricity |  | 164            |  | 213     |  | 377    |  | 314     |  | 195     |  | 509   
|Petroleum   |  | 3,687          |  | 4,891   |  | 8,578  |  | 955     |  | 1,492   |  | 2,447 
|Coal        |  | 90             |  |        |  | 90     |  | 55      |  |        |  | 55    
|Other       |  | 77             |  | 22      |  | 99     |  | 393     |  | 141     |  | 534   
|            |  |                |  |         |  |        |  |         |  |         |  |       
|Total       |  | 35,703         |  | 19,138  |  | 54,841 |  | 25,966  |  | 17,023  |  | 42,989
|            |  |                |  |         |  |        |  |         |  |         |  |       

NYMEX ClearPort® Clearing Open Interests

At June 30,



|            |  |                |  |         |  |        |  |         |  |         |  |       
|----------- |  | -------------- |  | ------- |  | ------ |  | ------- |  | ------- |  | ------
|            |  | 2008           |  | 2007   
|            |  | Futures        |  | Options |  | Total  |  | Futures |  | Options |  | Total 
|            |  | (in thousands)
|Natural gas |  | 7,598          |  | 6,145   |  | 13,743 |  | 6,564   |  | 5,610   |  | 12,174
|Electricity |  | 190            |  | 211     |  | 401    |  | 232     |  | 138     |  | 370   
|Petroleum   |  | 499            |  | 1,971   |  | 2,470  |  | 357     |  | 857     |  | 1,214 
|Coal        |  | 20             |  |        |  | 20     |  | 13      |  |        |  | 13    
|Other       |  | 14             |  |        |  | 14     |  | 2       |  |        |  | 2     
|            |  |                |  |         |  |        |  |         |  |         |  |       
|Total       |  | 8,321          |  | 8,327   |  | 16,648 |  | 7,168   |  | 6,605   |  | 13,773
|            |  |                |  |         |  |        |  |         |  |         |  |       

The Company believes that the continued
growth of NYMEX ClearPort® Clearing was due, in part, to traditional over-the-counter market participants seeking credit risk mitigation provided by the Companys clearinghouse for
off-exchange trade execution activities. Particularly, natural gas contracts comprise a significant majority of the total number of NYMEX ClearPort® Clearing products offered. As such, the
Company believes that its total NYMEX ClearPort® Clearing volume will be directly affected by the volatility and direction of the natural gas markets.

Operating Revenues

The components of operating
revenues, as well as dollar and percentage changes, are as follows:



|                              |  |                            |         |        |   |             |                          |   |        |  |      |   |             |   |         |  |   |         |  |   |        |  |    |  
|----------------------------- |  | -------------------------- | ------- | ------ | - | ----------- | ------------------------ | - | ------ |  | ---- | - | ----------- | - | ------- |  | - | ------- |  | - | ------ |  | -- | -
|                              |  | Three Months EndedJune 30, |         | Change |   |             | Six Months EndedJune 30, |   | Change | 
|(Dollars in thousands)        |  | 2008                       |         | 2007   |   | 2008 v 2007 |                          |   | 2008   |  | 2007 |   | 2008 v 2007 |  
|Clearing and transaction fees |  | $                          | 180,400 |        | $ | 137,390     |                          | $ | 43,010 |  | 31   | % |             | $ | 359,451 |  | $ | 275,567 |  | $ | 83,884 |  | 30 | %
|Market data fees              |  |                            | 26,913  |        |   | 23,363      |                          |   | 3,550  |  | 15   | % |             |   | 53,126  |  |   | 46,500  |  |   | 6,626  |  | 14 | %
|Other                         |  |                            | 3,495   |        |   | 2,844       |                          |   | 651    |  | 23   | % |             |   | 7,106   |  |   | 5,756   |  |   | 1,350  |  | 23 | %
|                              |  |                            |         |        |   |             |                          |   |        |  |      |   |             |   |         |  |   |         |  |   |        |  |    |  
|                              |  | $                          | 210,808 |        | $ | 163,597     |                          | $ | 47,211 |  | 29   | % |             | $ | 419,683 |  | $ | 327,823 |  | $ | 91,860 |  | 28 | %
|                              |  |                            |         |        |   |             |                          |   |        |  |      |   |             |   |         |  |   |         |  |   |        |  |    |  

Clearing and Transaction Fees

The increase for the three and six months ended June 30, 2008 was due principally to the
continued strong growth in products traded on CME Globex and NYMEX ClearPort® Clearing electronic platforms. For the three months ended June 30, 2008, the total volume of contracts
traded and/or cleared was 116.0 million contracts, an



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increase of 32% compared to 87.9 million contracts in the same period last year. Average daily volume was 1.812 million contracts, a 30% increase
compared to 1.396 million contracts in the prior year period. The increase for the six months ended June 30, 2008 was attributed to an increase in the percentage of trades executed through CME Globex and NYMEX ClearPort® Clearing electronic platform. The total volume of contracts traded and/or cleared was 230.0 million contracts, an increase of 28% compared to 180.3 million contracts for the same
period last year. Average daily volume was 1.841 million contracts for the six months ended June 30, 2008, a 27% increase compared to 1.454 million contracts for the first half of 2007. Additionally, the gross average rate per
contract increased to $1.56 from $1.53 for the six months ended June 30, 2008 and 2007, respectively. This increase is driven primarily by a fee increase that went into effect on January 1, 2008 as well as increased volume on NYMEX
ClearPort® Clearing which charges a higher rate per contract. While volume has a significant impact on clearing and transaction fees revenue, the percentage of trades executed by member and
non-member customers also influences the Companys rate per contract, as non-member customers are charged higher fees than member customers.

Market Data Fees

The Company provides proprietary real-time market data, news and advanced analytics to desktops and
mobile devices for which the Company charges fees. Market data provides information about bids, offers, trades and trade size relating to futures and options contracts to the Companys subscribers. The increase in market data fees for the three
and six months ended June 30, 2008 was attributable to a new price structure that went into effect on February 1, 2008, as well as an increase in desktops and mobile devices in 2008. As of June 30, 2008, the Companys market data
was displayed on approximately 149,000 devices.

Other

The increase for the three and six months ended June 30, 2008 was due primarily to facilitation desk fees that were implemented in the fourth quarter of 2007 as well as higher floor fines and rental income for
the respective periods. The facilitation desk fees are charged when the Companys customer service department is needed to facilitate customer trades.

Operating Expenses

The components of operating expenses, as well as dollar and percentage changes, are as follows:



|                               |  |                            |        |        |   |             |                          |   |        |   |      |      |             |  |   |         |  |   |         |  |   |        |   |  |     |  
|------------------------------ |  | -------------------------- | ------ | ------ | - | ----------- | ------------------------ | - | ------ | - | ---- | ---- | ----------- |  | - | ------- |  | - | ------- |  | - | ------ | - |  | --- | -
|                               |  | Three Months EndedJune 30, |        | Change |   |             | Six Months EndedJune 30, |   | Change |  
|(Dollars in thousands)         |  | 2008                       |        | 2007   |   | 2008 v 2007 |                          |   | 2008   |   | 2007 |      | 2008 v 2007 | 
|Direct transaction costs       |  | $                          | 26,886 |        | $ | 24,318      |                          | $ | 2,568  |   |      | 11   | %           |  | $ | 54,969  |  | $ | 48,420  |  | $ | 6,549  |   |  | 14  | %
|Salaries and employee benefits |  |                            | 19,887 |        |   | 20,482      |                          |   | (595   | ) |      | -3   | %           |  |   | 39,863  |  |   | 41,520  |  |   | (1,657 | ) |  | -4  | %
|Occupancy and equipment        |  |                            | 5,893  |        |   | 5,604       |                          |   | 289    |   |      | 5    | %           |  |   | 11,653  |  |   | 11,547  |  |   | 106    |   |  | 1   | %
|Depreciation and amortization  |  |                            | 3,571  |        |   | 3,614       |                          |   | (43    | ) |      | -1   | %           |  |   | 7,029   |  |   | 7,145   |  |   | (116   | ) |  | -2  | %
|General and administrative     |  |                            | 4,583  |        |   | 4,945       |                          |   | (362   | ) |      | -7   | %           |  |   | 9,204   |  |   | 9,642   |  |   | (438   | ) |  | -5  | %
|Professional services          |  |                            | 5,079  |        |   | 3,922       |                          |   | 1,157  |   |      | 30   | %           |  |   | 8,205   |  |   | 8,108   |  |   | 97     |   |  | 1   | %
|Telecommunications             |  |                            | 1,428  |        |   | 1,417       |                          |   | 11     |   |      | 1    | %           |  |   | 2,678   |  |   | 2,840   |  |   | (162   | ) |  | -6  | %
|Marketing                      |  |                            | 2,013  |        |   | 1,626       |                          |   | 387    |   |      | 24   | %           |  |   | 3,363   |  |   | 3,559   |  |   | (196   | ) |  | -6  | %
|Other expenses                 |  |                            | 2,124  |        |   | 182         |                          |   | 1,942  |   |      | 1067 | %           |  |   | 10,487  |  |   | 1,843   |  |   | 8,644  |   |  | 469 | %
|                               |  |                            |        |        |   |             |                          |   |        |   |      |      |             |  |   |         |  |   |         |  |   |        |   |  |     |  
|                               |  | $                          | 71,464 |        | $ | 66,110      |                          | $ | 5,354  |   |      | 8    | %           |  | $ | 147,451 |  | $ | 134,624 |  | $ | 12,827 |   |  | 10  | %
|                               |  |                            |        |        |   |             |                          |   |        |   |      |      |             |  |   |         |  |   |         |  |   |        |   |  |     |  

Direct Transaction Costs

The increase in direct transaction costs for the three and six months ended June 30, 2008 was primarily attributable to record volume on CME Globex.
For the three and six months ended June 30, 2008, NYMEX



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Division electronic trading volume on CME Globex averaged approximately 865,000 contracts per day and 840,000 contracts per day, respectively, an increase of
42% and 39% compared to the same respective periods last year. COMEX Division electronic trading volume on CME Globex averaged approximately 172,000 contracts per day and 188,000 contracts per day for the three and six months ended June 30,
2008, respectively, an increase of 70% and 96% compared to the same respective periods last year. Increased volume on NYMEX ClearPort® Clearing also contributed to the increase in direct
transaction costs. Direct transaction costs for both of these platforms are volume based and, therefore, the increased volumes equated to higher costs.

Salaries and Employee Benefits

Salaries and employee benefits are comprised of employee wages, bonuses, non-cash
share-based compensation, benefits and employer taxes. The decrease in salaries and employee benefits for the three and six months ended June 30, 2008 was due primarily to a decrease in the average number of employees compared to the same
periods last year. This decline in employees, as a result of workforce reduction implemented in the fourth quarter of 2007, resulted in lower total wages and related benefit costs for the respective periods. Partially offsetting this decrease was an
increase in share-based compensation expense, as a result of additional equity awards granted in 2008 of $1.4 million and $2.8 million for the three and six months ended June 30, 2008, respectively.

Occupancy and Equipment

The increase in
occupancy and equipment expenses for the three and six months ended June 30, 2008 was due primarily to higher utility expenses of the Companys trading facilities and corporate headquarters. The Company has experienced record-high prices
for energy related costs during the second quarter and first half of 2008 and expects these costs to continue to increase in the third quarter of 2008.

Depreciation and Amortization

Depreciation and amortization expenses for the three and six months ended
June 30, 2008 were essentially the same compared to the same respective periods last year.

General and Administrative

The decrease in general and administrative expenses for the three and six months ended June 30, 2008 was principally attributable to the cost
reduction initiatives that began in the fourth quarter of 2007.

Professional Services

The increase in professional services expenses for the three and six months ended June 30, 2008 was principally attributable to higher legal and
consulting fees to support the Companys strategic business initiatives, such as the launch in the current quarter of environmental contracts for the Green Exchange venture, as well as the Companys alliance with LCH.Clearnet.

Telecommunications

The telecommunications
expenses for the three and six months ended June 30, 2008 were essentially the same compared to the same respective periods last year.

Marketing

Marketing expenses consist of conferences, special events, advertising, and promotional expenses related
to promoting the trading of Company products and attracting new customers. For the three months ended June 30,



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2008, the increase in marketing costs was attributable to higher costs for conferences, special events and other marketing related expenses. For the six
months ended June 30, 2008, the decrease was principally attributable to higher advertising and other marketing expenses incurred in the prior year period related to the Companys expansion initiatives.

Other Expenses

The Company entered into a
Merger Agreement with CME Group and, as a result, incurred merger-related expenses of $1.7 million and $9.6 million for the three- and six-month periods ended June 30, 2008, respectively. These expenses were primarily investment banking, legal
and accounting fees. Excluding these merger-related expenses, other expenses increased by $0.3 million for the current quarter and decreased by $0.9 million for the six months ended June 30, 2008. For the second quarter of 2008, the increase is
principally attributable to higher charitable contributions as compared to the same period last year. The decrease for the six months ended June 30, 2008 was a direct result of lower member benefit costs, as the Company discontinued its
members benefit subsidy program effective April 1, 2007.

Non-Operating Income and Expenses

The components of non-operating income and expenses, as well as dollar and percentage changes, are as follows:



|                                                     |  |                            |        |   |        |   |         |                          |  |   |         |   |  |      |   |  |             |         |   |  |   |         |   |  |   |         |   |  |     |  
|---------------------------------------------------- |  | -------------------------- | ------ | - | ------ | - | ------- | ------------------------ |  | - | ------- | - |  | ---- | - |  | ----------- | ------- | - |  | - | ------- | - |  | - | ------- | - |  | --- | -
|                                                     |  | Three Months EndedJune 30, |        |   | Change |   |         | Six Months EndedJune 30, |  |   | Change  |  
|(Dollars in thousands)                               |  | 2008                       |        |   | 2007   |   |         | 2008 v 2007              |  |   | 2008    |   |  | 2007 |   |  | 2008 v 2007 |        
|Investment income, net                               |  | $                          | 3,222  |   |        | $ | 6,133   |                          |  | $ | (2,911  | ) |  | -47  | % |  | $           | 6,836   |   |  | $ | 12,840  |   |  | $ | (6,004  | ) |  | -47 | %
|Interest income from securities lending              |  |                            | 4,829  |   |        |   | 31,087  |                          |  |   | (26,258 | ) |  | -84  | % |  |             | 12,597  |   |  |   | 60,493  |   |  |   | (47,896 | ) |  | -79 | %
|Interest expense/fees from securities lending        |  |                            | (4,233 | ) |        |   | (30,136 | )                        |  |   | 25,903  |   |  | 86   | % |  |             | (10,281 | ) |  |   | (59,025 | ) |  |   | 48,744  |   |  | 83  | %
|Interest expense                                     |  |                            | (1,587 | ) |        |   | (1,612  | )                        |  |   | 25      |   |  | 2    | % |  |             | (3,173  | ) |  |   | (3,224  | ) |  |   | 51      |   |  | 2   | %
|Gain (losses) losses from unconsolidated investments |  |                            | 28,616 |   |        |   | (28,944 | )                        |  |   | 57,560  |   |  | 199  | % |  |             | 26,406  |   |  |   | (30,587 | ) |  |   | 56,993  |   |  | 186 | %
|                                                     |  |                            |        |   |        |   |         |                          |  |   |         |   |  |      |   |  |             |         |   |  |   |         |   |  |   |         |   |  |     |  
|                                                     |  | $                          | 30,847 |   |        | $ | (23,472 | )                        |  | $ | 54,319  |   |  | 231  | % |  | $           | 32,385  |   |  | $ | (19,503 | ) |  | $ | 51,888  |   |  | 266 | %
|                                                     |  |                            |        |   |        |   |         |                          |  |   |         |   |  |      |   |  |             |         |   |  |   |         |   |  |   |         |   |  |     |  

Investment Income, Net

The decrease in investment income, net for the three and six months ended June 30, 2008 was due to a repositioning of the Companys investment portfolio in response to the credit crisis that became highly evident
in the second half of 2007. This change to the Companys investments, while intended to preserve capital and provide liquidity, also resulted in a lower rate of return. The Company invests excess cash principally in U.S. government securities,
as opposed to the prior year periods where the funds were invested primarily in taxable and non-taxable securities yielding higher returns. Additionally, the overall decline in market conditions and federal reserve rate cuts, among other things,
contributed to the decrease in investment income during the second quarter and first half of 2008.

Interest Income and Interest Expense/Fees from
Securities Lending

In August 2007, the Company limited its exposure to the high volatility in the credit markets and ceased lending
out additional securities. This resulted in a decline in interest income and interest expense from securities lending for the three and six months ended June 30, 2008 compared to the same periods last year. Despite the decrease in invested
funds, the Company was able to earn a higher net yield on its securities lending portfolio due to a higher average investment rate earned during the current quarter. The ratio of interest expense/fees to interest income will vary, as the Company is
able to negotiate better rates on its interest expense depending on whether the securities that it lends out are in greater demand.



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Interest Expense

Interest expense for the three and six months ended June 30, 2008 was essentially the same compared to the same periods last year. Interest expense is comprised predominantly of interest the Company incurs on its
long-term debt.

Gain (Losses) from Unconsolidated Investments

The gain from unconsolidated investments for the three and six months ended June 30, 2008 was principally attributable to the Companys investment in the Montréal Exchange. On May 1, 2008,
Montréal Exchange Inc. and TSX Group Inc. completed their business combination to create a new integrated exchange group named TMX Group Inc. As a result of the merger, the Company recorded a pre-tax gain of $33.8 million for the three and
six months ended June 30, 2008. Partially offsetting this gain is an impairment loss of $3.2 million related to the Companys remaining investment in Optionable. In the second quarter of 2007, the Company recognized an initial impairment
charge of $26.0 million related to Optionable. Excluding the investment gain in Montréal Exchange and the impairment losses in Optionable, losses from unconsolidated investments were $2.0 million and $4.2 million for the three and six months
ended June 30, 2008, respectively, principally related to the Companys investment in the Dubai Mercantile Exchange Limited (DME). Excluding the impairment charge of $26.0 million related to Optionable, losses from
unconsolidated investments for the three and six months ended June 30, 2007 of $2.9 million and $4.6 million, respectively, were principally attributable to the Companys investment in DME.

Provision for Income Taxes

The Companys
effective tax rate for the three and six months ended June 30, 2008 was 44.58% and 45.67%, respectively, compared to 43.6% for the same periods last year. The effective tax rate for the three and six months ended June 30, 2008 was
negatively impacted by non-deductible compensation under section 162(m) of the Internal Revenue Code and non-deductible business combination expenses related to the Merger Agreement.

Financial Condition and Cash Flows

Liquidity and Capital Resources

At June 30, 2008 and December 31, 2007, the Company had $635.6 million and $464.4 million, respectively, in cash and cash equivalents and
marketable securities. Working capital at June 30, 2008 and December 31, 2007 was $651.3 million and $474.0 million, respectively. The Company has a long-term AA+ and a short-term A-1+ counter-party credit rating from
Standard & Poors Rating Services that was initially obtained in April 2003 and sustained through a ratings review in September 2006.

Sources and Uses of Cash

The following table is a summary of significant cash flow categories for the six months
ended June 30, 2008 and 2007:



|                                          |  |                |          |   |      |   |          |  
|----------------------------------------- |  | -------------- | -------- | - | ---- | - | -------- | -
|                                          |  | June 30,       |         
|                                          |  | 2008           |          |   | 2007 |  
|                                          |  | (in thousands) |         
|Net cash flow provided by (used in):      |  |                |          |   |      |   |          |  
|Operating activities                      |  | $              | (13,713  | ) |      | $ | 134,439  |  
|Investing activities                      |  |                | 307,862  |   |      |   | 89,480   |  
|Financing activities                      |  |                | (295,034 | ) |      |   | (225,438 | )
|                                          |  |                |          |   |      |   |          |  
|Net decrease in cash and cash equivalents |  | $              | (885     | ) |      | $ | (1,519   | )
|                                          |  |                |          |   |      |   |          |  

Net cash used in operating activities for the six months ended June 30, 2008 was $13.7 million, a
decrease of $148.2 million compared to the same period last year. The decrease was principally attributable to period over period change of the following compared to the six months ended June 30, 2007:



| |  |  | a transfer of cash of $201.9 million, as excess cash was invested in marketable securities;
| | - |  | -------------------------------------------------------------------------------------------



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| |  |  | a reduction of impairment loss of $22.7 million related to the Companys investment in Optionable; and
| | - |  | ------------------------------------------------------------------------------------------------------



| |  |  | a gain of $33.9 million related to the Companys investment in Montréal Exchange.
| | - |  | ---------------------------------------------------------------------------------

These items were partially offset by the following during the six months ended June 30, 2008:



| |  |  | an increase in net earnings of $67.5 million;
| | - |  | ---------------------------------------------



| |  |  | an increase in non-cash activity of $20.5 million; and
| | - |  | ------------------------------------------------------



| |  |  | increases in income tax payable of $11.5 million and other current liabilities of $10.6 million.
| | - |  | ------------------------------------------------------------------------------------------------

Under its securities lending program, JPMorgan Chase Bank, N.A. (JPMorgan), as agent for the Company, lends on an overnight basis, a portion
of the clearing members securities on deposit in the Companys margin deposits and guaranty fund to third parties in return for cash collateral. JPMorgan, in turn, invests the cash collateral in various investments on behalf of the
Company, in accordance with the programs investment guidelines. The Company receives the benefits, and bears the risks, of such investments. The cash collateral received is recorded as a liability and presented in financing activities on the
Companys condensed consolidated statements of cash flows. The corresponding investment is recorded as an asset, and its purchases and redemptions are presented in investing activities on the Companys condensed consolidated statements of
cash flows.

Net cash provided by investing activities for the six months ended June 30, 2008, exclusive of securities purchased under the
securities lending program, was $31.3 million, an increase of $157.6 million over the same period last year. This increase was due primarily to reduced investments of $94.7 million in unconsolidated entities during the six months ended June 30,
2008, as well as proceeds of $49.3 million related to the Companys investment in Montréal Exchange. The Company invested approximately $12.7 million in IMAREX ASA and the DME during the six months ended June 30, 2008, as opposed to its
investment of approximately $107.4 million in the Montréal Exchange and Optionable during the same period last year (see Note 7 to the unaudited condensed consolidated financial statements).

Net cash used in financing activities for the six months ended June 30, 2008, exclusive of cash received under the securities lending program, was
$18.4 million, an increase of $8.8 million compared to the same period last year. This increase is attributable to cash dividends paid to the Companys stockholders totaling $20.0 million during the current year compared to $9.2 million for the
same period last year. This increase was offset, in part, by proceeds of $1.4 million received from the exercise of employee stock option awards.

The Company believes that its cash flows from operations and existing working capital will be sufficient to meet its needs for the foreseeable future, including capital expenditures, debt service and dividends. Subject to certain
limitations under existing long-term note agreements, the Company has the ability, and may seek to raise capital through the issuance of debt or equity in the private and public capital markets.

Investment Policy

The Company maintains cash and
short-term investments in an amount sufficient to meet its working capital requirements. The Companys investment policies are designed to maintain a high degree of liquidity, while emphasizing safety of principal. Excess cash on hand is
generally invested overnight in short-term marketable securities. Cash that is not required to meet daily working capital requirements is invested primarily in U.S. government securities. The Company also invests in equity securities. Investments in
the securities lending program are generally invested in corporate debt securities. At June 30, 2008 and December 31, 2007, cash and investments were as follows:



|                                           |  |                |           |                  |   |          
|------------------------------------------ |  | -------------- | --------- | ---------------- | - | ---------
|                                           |  | June 30,2008   |           | December 31,2007
|                                           |  | (in thousands)
|Cash and cash equivalents                  |  | $              | 2,411     |                  | $ | 3,296    
|Collateral from securities lending program |  |                | 558,367   |                  |   | 842,444  
|Marketable securities                      |  |                | 633,202   |                  |   | 461,142  
|                                           |  |                |           |                  |   |          
|                                           |  | $              | 1,193,980 |                  | $ | 1,306,882
|                                           |  |                |           |                  |   |          



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Included in marketable securities at June 30, 2008 are investments totaling $11.6 million relating
to the COMEX Division Members Recognition and Retention Plan (MRRP) (see Note 10 to the unaudited condensed consolidated financial statements).

Also, included in marketable securities are investments that are pledged as collateral with one of the Companys investment managers relating to a membership seat financing program (see Note 19 to the unaudited
condensed consolidated financial statements).

The Company is required, under the Commodity Exchange Act, to maintain separate accounts for
cash and securities that are deposited by clearing members, at banks approved by the Company, as margin for house and customer accounts. These margin deposits are used by members to meet their obligations to the Company for margin requirements on
open futures and options positions, as well as delivery obligations. In addition, each clearing member firm is required to maintain a security deposit, in the form of cash or U.S. Treasury securities with a maturity of ten years or less or shares of
certain approved money market mutual funds, of a minimum of $2.5 million in the Guaranty Fund. The Guaranty Fund may be used for any loss sustained by the Company as a result of the failure of a clearing member to discharge its obligations on the
NYMEX Division or COMEX Division. The Company is entitled to earn interest on cash balances posted as margin deposits and Guaranty Funds. Such balances are included in the Companys condensed consolidated balance sheets, and are generally
invested overnight in cash and securities purchased under agreements to resell. The table in Note 5 to the unaudited condensed consolidated financial statements sets forth margin deposits and Guaranty Fund balances held by the Company on behalf of
clearing members at June 30, 2008 and December 31, 2007.

Under the securities lending program, JPMorgan, as agent, lends on an
overnight basis, a portion of the clearing members securities on deposit in the Companys margin deposits and guaranty fund to third parties in return for cash collateral. JPMorgan, in turn, invests the cash collateral in various
investments on behalf of the Company, in accordance with the programs investment guidelines. The Company receives the benefits, and bears the risks, of such investments (see Note 2 to the unaudited condensed consolidated financial statements).

Future Cash Requirements

In
connection with its operating activities, the Company enters into certain contractual obligations. The Companys material contractual cash obligations include long-term debt, a technology services agreement, operating leases and other
contracts. A summary of the Companys minimum required future cash payments associated with its contractual cash obligations outstanding as of June 30, 2008, as well as an estimate of the timing in which these commitments are expected to
expire, are set forth in the following table:



|                              |  |                        |        |      |   |        |  |      |        |      |   |            |  |       |        |  |   |        |  |   |        
|----------------------------- |  | ---------------------- | ------ | ---- | - | ------ |  | ---- | ------ | ---- | - | ---------- |  | ----- | ------ |  | - | ------ |  | - | -------
|                              |  | Payments Due by Period
|                              |  | 2008                   |        | 2009 |   | 2010   |  | 2011 |        | 2012 |   | Thereafter |  | Total
|                              |  | (in thousands)        
|Contractual Obligations       |  |                        |        |      |   |        |  |      |        |      |   |            |  |       |        |  |   |        |  |   |        
|Long-term debt principal      |  | $                      | 2,817  |      | $ | 2,817  |  | $    | 2,817  |      | $ | 7,739      |  | $     | 4,909  |  | $ | 59,182 |  | $ | 80,281 
|Long-term debt interest       |  |                        | 3,102  |      |   | 5,994  |  |      | 5,783  |      |   | 5,573      |  |       | 4,980  |  |   | 31,233 |  |   | 56,665 
|Services agreements1          |  |                        | 5,340  |      |   | 10,295 |  |      | 11,571 |      |   | 30,948     |  |       |       |  |   |       |  |   | 58,154 
|Operating leasesfacilities   |  |                        | 1,755  |      |   | 3,034  |  |      | 3,306  |      |   | 3,585      |  |       | 2,051  |  |   | 136    |  |   | 13,867 
|Operating leasesequipment    |  |                        | 930    |      |   | 1,408  |  |      | 540    |      |   |           |  |       |       |  |   |       |  |   | 2,878  
|Other long-term obligations   |  |                        | 917    |      |   | 1,041  |  |      | 967    |      |   | 800        |  |       | 800    |  |   | 5,247  |  |   | 9,772  
|                              |  |                        |        |      |   |        |  |      |        |      |   |            |  |       |        |  |   |        |  |   |        
|Total contractual obligations |  | $                      | 14,861 |      | $ | 24,589 |  | $    | 24,984 |      | $ | 48,645     |  | $     | 12,740 |  | $ | 95,798 |  | $ | 221,617
|                              |  |                        |        |      |   |        |  |      |        |      |   |            |  |       |        |  |   |        |  |   |        



|1 | Services agreements include required minimum payments in accordance with the Services Agreement (see Note 11 to the unaudited condensed consolidated
financial statements). The Services Agreement has a
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| | ten-year term from the launch date with rolling three-year extensions. Either party may elect to terminate the Services Agreement between the fifth and the
sixth year anniversary of the first launch date upon written notice and payment of a termination fee. As a result, the Companys current minimum obligation under the Services Agreement is for remaining payments through year five. As such, the
Contractual Obligations table above sets forth the Companys minimum obligation remaining through year five, including the related termination fee in the event the Company elects to terminate the Services Agreement. The Company has entered into
amendment to the Services Agreement in connection with the proposed merger (see Note 20 to the unaudited condensed consolidated financial statements). In addition, the services agreements category includes employment agreements as filed with the
SEC.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The Company has unrecognized tax benefits, including interest, of approximately $4.4 million, net of tax effect, as
of June 30, 2008. The Company is subject to periodic examinations of its income tax returns by the U.S. Internal Revenue Service and various state and local taxing authorities, which could result in future tax liabilities, the payment of which
would offset the current unrecognized tax benefits. Due to the uncertainty of the outcome of any future income tax examinations, it is not possible to estimate when tax payments, if any, would be made.

In 1995, the Company secured a grant of $128.7 million from the New York City Economic Development Corporation (EDC) and the Empire State
Development Corporation (ESDC, formerly known as the New York State Urban Development Corporation) for construction of its corporate headquarters and trading facility. The grant is being recognized in income on the same basis as, and is
a reduction to, the depreciation of the facility. The Company is liable for liquidating damages on a declining scale, currently at $25 million, if it violates the terms of the occupancy agreement at any time prior to the 15 years from the date of
occupancy, July 7, 1997.

The Companys senior notes are subject to a prepayment penalty in the event they are paid off prior to
their scheduled maturities. The Company believes that any economic benefits derived from early redemption of these notes would be offset by the redemption penalty. These notes place certain limitations on the Companys ability to incur
additional indebtedness.

In accordance with the DME shareholders agreement, the Company is required to contribute capital to the joint
venture in an aggregate amount of $9.8 million over a five-year period, contingent upon the DMEs achievement of certain agreed upon performance targets. At June 30, 2008, the Company had contributed a total of $8.0 million.

Section 311(G) of the Bylaws of NYMEX Exchange provides for a revenue sharing arrangement
with the owners of Class A memberships in NYMEX Exchange in the event that either: (i) NYMEX Exchange determines to terminate permanently all open outcry floor trading for a specified list of products on the NYMEX Exchange and instead
lists such products for electronic trading only; or (ii) a shift occurs whereby at least 90% of the contract volume of such NYMEX Exchange product results from electronic trading. Once triggered for a particular product, the
obligation under the revenue sharing arrangement consists of the greater of the following amounts: (i) 10% of the gross NYMEX Exchange revenues attributable to all revenue from the electronic trading of such applicable NYMEX Exchange products,
but not including market data fees or revenues from bilateral transactions cleared through NYMEX ClearPort® Clearing (or its successor); (ii) or 100% of the revenue from any additional
special fee or surcharge that may be imposed by NYMEX Exchange on the transaction fees applicable to the electronic trading of such applicable NYMEX Exchange products. Once triggered, Bylaw Section 311(G) requires this revenue stream continue
in perpetuity or until NYMEX Exchange no longer lists such product for electronic trading. NYMEX Exchange has determined that a shift will have occurred for any applicable NYMEX Exchange product following the end of two consecutive
fiscal quarters in which, during each quarter, the average quarterly electronic trading volume has equaled or exceeded 90% of the contract volume in such product. Thereafter, revenues that are generated from the electronic trading of such product
will begin to accrue and will be paid to the owners of Class A memberships in NYMEX Exchange on a quarterly basis



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consistent with the financial reporting schedule of NYMEX Holdings. In accordance with the NYMEX Exchange Bylaws, such determination may be subject to
challenge by owners of Class A memberships in NYMEX Exchange through arbitration.

Other Matters

In February 2004, the Commodity Futures Trading Commission (CFTC) issued an order requiring, among other things, that the Company establish
and maintain a permanent retail customer protection mechanism supported by a commitment of not less than $10 million, which must be available at all times to reimburse retail customers trading on the Exchange whose original margin might be lost in
the default of another customer of their clearing member. The Company has established the retail customer protection mechanism. Based on historical patterns, the Company believes that the likelihood of a default that would require reimbursement
under this mechanism is remote. Therefore, the Company has not established, and does not expect in the future to establish, a liability related to this commitment.

Responsibility for Financial Reporting

The Companys management is responsible for the preparation, integrity and
objectivity of the unaudited condensed consolidated financial statements and related notes, and the other financial information contained in this Quarterly Report on Form 10-Q. Such financial statements have been prepared in accordance with U.S.
generally accepted accounting principles and are considered by management to present fairly the Companys consolidated financial position, results of operations and cash flows. These unaudited condensed consolidated financial statements include
certain amounts that are based on managements estimates and judgments, giving due consideration to materiality.

Critical Accounting Policies

The Companys significant accounting policies, which include managements best estimates and judgments, are included in Note 2 of
the consolidated financial statements of the Annual Report on Form 10-K for the year ended December 31, 2007. Certain of these accounting policies are considered critical as disclosed in the Critical Accounting Policies section of
Managements Discussion and Analysis in the Companys 2007 Annual Report on Form 10-K because of the potential for a significant impact on the financial statements due to the inherent uncertainty in such estimates. Other than the adoption
of SFAS 157, as discussed below, there have been no significant changes in the Companys critical accounting policies since December 31, 2007.

Fair Value Measurements

On January 1, 2008, the Company adopted SFAS No. 157, Fair Value Measurements
(SFAS No. 157), which establishes a consistent framework for measuring fair value and expands the disclosures on fair value measurements. SFAS No. 157 establishes a fair value hierarchy which requires an entity to utilize
valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. SFAS No. 157 describes three levels of inputs to valuation techniques that may be used to measure fair value
(see Note 3 to the unaudited condensed consolidated financial statements).

Financial assets are considered Level 3 when their fair values
are determined using pricing models with at least one significant input or assumption that is unobservable. The Companys Level 3 securities represent certain illiquid investments associated with the securities lending program and primarily
include medium term bank notes and certain asset-backed securities for which there is limited market activity. At June 30, 2008, the fair value of these securities were based on internally developed models that incorporate company assumptions
on the expected timing of cash flows, credit spreads and liquidity adjustments. This represents the Companys best estimate of exit price as defined by SFAS No. 157.

On January 1, 2008, the Company had $842.4 million invested under the securities lending program, which are predominately comprised of
investments valued using Level 2 inputs. The amount of securities in the



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securities lending program valued using Level 3 inputs declined during the first half of 2008 by approximately $123.1 million since the Company identified
observable inputs for these securities or the securities matured at par. At June 30, 2008, $35.6 million of the corporate debt securities associated with the securities lending program remained classified in Level 3 (approximately 6.4% of the
Companys collateral from securities lending program) as the securities contained at least one significant input which was unobservable.



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|Item 3. | Quantitative and Qualitative Disclosures about Market Risk
|------- | ----------------------------------------------------------

The table below provides information about the Companys marketable securities (excluding equity and short-term debt securities), collateral from securities lending program and long-term debt including expected
principal and interest cash flows for the years 2008 through 2012 and thereafter. The marketable securities and collateral from securities lending program are classified as trading and available-for-sale securities, respectively.

Principal Amounts by Expected Maturity

At June 30, 2008

(in thousands)



|                |  |           |         |          |   |        |  |                             |         |  |      |  
|--------------- |  | --------- | ------- | -------- | - | ------ |  | --------------------------- | ------- |  | ---- | -
|Year            |  | Principal |         | Interest |   | Total  |  | WeightedAverageInterestRate |        
|Assets          |  |           |         |          |   |        |  |                             |         |  |      |  
|Debt Securities |  |           |         |          |   |        |  |                             |         |  |      |  
|2008            |  | $         | 165,039 |          | $ | 5,802  |  | $                           | 170,841 |  | 1.66 | %
|2009            |  |           | 440,535 |          |   | 3,267  |  |                             | 443,802 |  | 6.57 | %
|2010            |  |           | 205     |          |   | 533    |  |                             | 738     |  | 4.77 | %
|2011            |  |           | 70      |          |   | 467    |  |                             | 537     |  | 4.79 | %
|2012            |  |           | 200     |          |   | 381    |  |                             | 581     |  | 4.80 | %
|Thereafter      |  |           | 7,249   |          |   | 5,194  |  |                             | 12,443  |  | 5.05 | %
|                |  |           |         |          |   |        |  |                             |         |  |      |  
|Total           |  | $         | 613,298 |          | $ | 15,644 |  | $                           | 628,942 |  |      |  
|                |  |           |         |          |   |        |  |                             |         |  |      |  
|                |  |           |         |         
|Liabilities     |  |           |         |          |   |        |  |                             |         |  |      |  
|Corporate Debt  |  |           |         |          |   |        |  |                             |         |  |      |  
|2008            |  | $         | 2,817   |          | $ | 3,103  |  | $                           | 5,920   |  | 7.73 | %
|2009            |  |           | 2,817   |          |   | 5,994  |  |                             | 8,811   |  | 7.74 | %
|2010            |  |           | 2,817   |          |   | 5,783  |  |                             | 8,600   |  | 7.75 | %
|2011            |  |           | 7,739   |          |   | 5,573  |  |                             | 13,312  |  | 7.76 | %
|2012            |  |           | 4,909   |          |   | 4,981  |  |                             | 9,890   |  | 7.77 | %
|Thereafter      |  |           | 59,182  |          |   | 31,232 |  |                             | 90,414  |  | 7.79 | %
|                |  |           |         |          |   |        |  |                             |         |  |      |  
|Total           |  | $         | 80,281  |          | $ | 56,666 |  | $                           | 136,947 |  |      |  
|                |  |           |         |          |   |        |  |                             |         |  |      |  

Interest Rate Risk

Current Assets

The Companys investment income, net consists primarily of interest income and realized and
unrealized gains and losses on the market values of its investments. Given the composition of its investment portfolio, the Companys investment income is highly sensitive to fluctuation in interest rates. Investment income for the three and
six months ended June 30, 2008 was $3.2 million and $6.8 million, respectively, compared to $6.1 million and $12.8 million for the same periods last year. The fair value of the Companys marketable securities, including equity and
short-term debt securities was $633.2 million at June 30, 2008. The Company believes that a hypothetical change in the interest rate of 100 basis points would not have a material impact on its consolidated results of operations, financial
condition or cash flows.

Debt

The weighted average interest rate on the Companys long-term debt is 7.77%. The debt contains a redemption premium, the amount of which varies with changes in interest rates. Therefore, the fair value of the



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Companys long-term debt is highly sensitive to changes in interest rates. Although the fair value of the debt will fluctuate with interest rates, the
Companys interest expense will not vary with changes in market interest rates if the debt is paid off in accordance with stated principal repayment schedules. As of the date of this report, the Company does not expect to pay down any series of
its long-term debt prior to stated maturities. However, the Company may pursue future financing strategies that involve early repayment of its current debt, or issuance of new debt, potentially increasing its sensitivity to changes in interest
rates.

Credit Risk

NYMEX
Division bylaws authorize its board of directors to fix the annual dues of the owners of the Class A memberships and to levy assessments as it determines to be necessary. Such dues and assessments are payable at such time as NYMEX
Divisions board of directors may determine. NYMEX Divisions board of directors may waive the payment of dues by all owners of Class A memberships or by individual members as it determines. COMEX Division bylaws provide its board of
directors with similar powers relating to dues, assessments and fees with respect to COMEX Division memberships. The board may levy such assessments upon each owner of a COMEX Division membership as it determines, but in no greater amount than those
imposed on each owner of a Class A membership in NYMEX Exchange.

The Exchange, as a self-regulatory organization, has instituted
detailed risk-management policies and procedures to guard against default risk with respect to contracts traded and/or cleared on the Exchange. In order to manage the risk of financial non-performance, the Exchange: (i) has established that
clearing members maintain at least $5 million in minimum working capital; (ii) limits the number of net open contracts that can be held by any clearing member, based upon that clearing members capital; (iii) requires clearing members
to post original margin collateral for all open positions, and to collect original margin from their customers; (iv) pays and collects variation margin on a marked-to-market basis at least twice daily; (v) requires clearing members to
collect variation margin from their customers; (vi) requires deposits to the Guaranty Fund from clearing members which would be available to cover financial non-performance; and (vii) has broad assessment authority to recoup financial
losses. The Exchange also maintains extensive surveillance and compliance operations and procedures to monitor and enforce compliance with rules pertaining to the trading, position sizes, delivery obligations and financial condition of members. In
addition, NYMEX Division clearing members, as all NYMEX Division member firms, must each own and hold 150,000 shares of common stock of NYMEX Holdings and two Class A memberships in NYMEX Exchange. The COMEX Division clearing member firms, as
all COMEX Division member firms, must each pledge two COMEX Division memberships.

As part of the Exchanges powers and procedures
designed to support contract obligations in the event that a contract default occurs, the Exchange may levy assessments on any of its clearing members if, after a default by another clearing member, there are insufficient funds available to cover a
deficit. The maximum assessment on each clearing member firm is the lesser of $30 million or 40% of such clearing member firms modified regulatory capital as reported periodically to the Exchange.

Despite the Companys authority to levy assessments or impose fees, there can be no assurance that the relevant members will have the financial
resources available to pay, or will not choose to be expelled from membership rather than pay, any dues, fees or assessments. The Company believes that assessment liabilities of a member arising prior to expulsion are contractual in nature and,
accordingly, survive expulsion. In addition, the Exchange would have recourse to such member and the proceeds from the Companys sale of such members collateral would apply towards any outstanding obligations to the Exchange of such
member. Recourse to a members collateral, however, may not be of material value in the case of large defaults that result in assessments greater in value than the collateral, particularly when the collaterals value declines markedly in
price as a consequence of the default.

Moreover, despite the risk mitigation techniques adopted by, and other powers and procedures
implemented by the Company, which are designed to, among other things, minimize the potential risks associated with the



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occurrence of contract defaults on the Company, there can be no assurance that these powers and procedures will prevent contract defaults or will otherwise
function to preserve the liquidity of the Company.



|Item 4. | Controls and Procedures
|------- | -----------------------



|(a) | Evaluation of Disclosure Controls and Procedures. The Companys Principal Executive Officer and Principal Financial Officer, after evaluating the effectiveness of the
Companys disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)) as of the end of the period covered by this Quarterly
Report on Form 10-Q, have concluded that, based on such evaluation, the Companys disclosure controls and procedures were effective in reporting, on a timely basis, information required to be disclosed by the Company in the reports that the
Company files or submits under the Exchange Act, and this Quarterly Report on Form 10-Q.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | Changes in Internal Controls. There were no changes in the Companys internal control over financial reporting identified in connection with the evaluation of such
internal control that occurred during the Companys last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Companys internal control over financial reporting.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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PART II: OTHER INFORMATION



|Item 1. | Legal Proceedings
|------- | -----------------

Information
regarding legal proceedings is disclosed in Note 19 to the unaudited condensed consolidated financial statements under the subheading Legal Proceedings. Such disclosure is incorporated herein by reference.



|Item 1A. | Risk Factors
|-------- | ------------

Other than the
following updates, there have been no material changes to the Risk Factors contained in the Companys Annual Report on Form 10-K for the year ended December 31, 2007, as filed with the SEC on March 3, 2008.

The Company and CME Group are parties to pending lawsuits in connection with the merger.

In re NYMEX Shareholder Litigation,C.A. No. 3621-VCN

On March 17,
2008, Cataldo J. Capozza, a NYMEX Holdings shareholder and a former Class A member of NYMEX Exchange commenced a putative class action in the Delaware Court of Chancery, on behalf of himself and all other NYMEX Holdings shareholders, against
NYMEX Holdings, the members of its board of directors and CME Group. The complaint, which is captioned Capozza v. NYMEX Holdings, Inc., et al.,C.A. No. 3621-VCN, and seeks to enjoin the Companys merger with CME Group (the
Proposed Transaction), alleges, among other things, that the directors breached their fiduciary duties to NYMEX Holdings shareholders by attempting to sell the Company for inadequate and unfair consideration and pursuant to an
inadequate and unfair process, and that CME Group aided and abetted such breaches. On April 21, 2008, NYMEX Holdings and its directors moved to dismiss the complaint and to stay all discovery pending the disposition of the motion to dismiss.
CME Group filed similar motions.

On April 14 and 15, 2008, respectively, two additional putative class actions were commenced in the
Delaware Court of Chancery by Polly Winters and Joan Haedrich, both purportedly NYMEX Holdings shareholders, on behalf of themselves and all other NYMEX Holdings shareholders, against NYMEX Holdings, the members of its board of directors and CME
Group. The Winters and Haedrich complaints contain allegations virtually identical to those in the Capozza action (discussed above).

On May 16, 2008, the Delaware Court of Chancery ordered that the three actions be consolidated under the caption In re NYMEX Shareholder Litigation, C.A. No. 3621-VCN, and that all subsequently filed
actions concerning the same subject matter be consolidated with them.

On June 20, 2008, Plaintiffs Capozza, Winters and Haedrich
(Plaintiffs) filed an Amended and Consolidated Class Action Complaint (the Amended Complaint), along with a Motion for Expedited Proceedings (the Motion to Expedite), in anticipation of a motion for a preliminary
injunction to enjoin the Special Meetings of the shareholders of NYMEX Holdings and the NYMEX Exchange Class A members relating to the Proposed Transaction (the Preliminary Injunction Motion). The Amended Complaint alleges that the
Proposed Transaction resulted from an unfair and inadequate process and offers an inadequate price. The Amended Complaint further alleges that the preliminary Form S-4 Registration Statement for the Proposed Transaction (which included a NYMEX
Holdings/CME Group joint proxy statement/prospectus (the Preliminary Proxy)), filed on June 10, 2008 with the Securities and Exchange Commission, was materially incomplete and misleading and omitted or misstated necessary
information. By the Amended Complaint, Plaintiffs seek, among other things, an injunction preventing the consummation of the Proposed Transaction.

On June 27, 2008, Plaintiffs filed a Second Consolidated and Amended Class Action Complaint (the Second Amended Complaint) to correct certain typographical errors in the Amended Complaint and to add CMEG NY Inc., the CME
Group merger subsidiary created for purposes of the Proposed Transaction, as a



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defendant. On July 9, 2008, NYMEX Holdings and its directors moved to dismiss the Second Amended Complaint. CME Group filed a similar motion.

On June 30, 2008, NYMEX Holdings and its directors and CME Group filed oppositions to the Motion to Expedite. On July 11, 2008,
the Court granted that motion, and discovery commenced. Subsequent thereto, the Court scheduled a hearing for August 13, 2008 for the Preliminary Injunction Motion.

On August 5, 2008, Plaintiffs agreed not to pursue the Preliminary Injunction Motion and the Court removed the August 13, 2008 hearing from its calendar. This matter is otherwise ongoing. NYMEX Holdings and
CME Group intend to defend vigorously against Plaintiffs allegations.

Greene v. NYMEX Holdings, Inc., et al.,C.A.
No. 3835-VCN

On June 16, 2008, Shelby Greene, purportedly a NYMEX Holdings shareholder and a Class A member of NYMEX
Exchange, commenced a putative class action in the Delaware Court of Chancery, on behalf of herself and all other Class A members, against NYMEX Holdings, the members of its board of directors and CME Group. Like the Second Amended Complaint in
the consolidated proceeding discussed above, the Greene complaint also seeks to enjoin the Proposed Transaction on price, process and disclosure grounds. However, the price claim alleged in the Greenecomplaint focuses on the
consideration to be received by the Class A members in connection with their membership interests in NYMEX Exchange. NYMEX Holdings and its directors filed a motion to dismiss the Greene complaint on July 17, 2008. CME Group filed a
similar motion.

On August 5, 2008, Ms. Greene, like Plaintiffs in the consolidated proceeding discussed above, agreed not to
pursue a preliminary injunction to enjoin the Special Meetings of the shareholders of NYMEX Holdings and NYMEX Exchange Class A members relating to the Proposed Transaction, and the Court removed the August 13, 2008 hearing from its
calendar. This matter is otherwise ongoing. NYMEX Holdings and CME Group intend to defend vigorously against these allegations.

Completion of the
merger is subject to a number of closing conditions that could delay completion of the merger or impose conditions that could have a material adverse effect on the Company or that could cause abandonment of the merger.

The merger is subject to a number of closing conditions, including, but not limited to, (i) adoption of the Merger Agreement by the stockholders of
the Company, (ii) approval by the stockholders of CME Group of (A) the amended and restated CME Group certificate of incorporation and (B) the issuance of shares of CME Group Class A common stock in connection with the merger,
(iii) approval by owners of 75% of the outstanding NYMEX Class A memberships of changes to the certificate of incorporation and bylaws of NYMEX Exchange which eliminate substantially all of the NYMEX Class A members existing
rights and replace them with certain new post-closing trading rights and privileges, (iv) effectiveness of a Form S-4 registration statement to be filed by CME Group, (v) receipt of certain regulatory approvals and (vi) receipt of an
opinion that the merger will be treated as a tax-free reorganization. Such conditions may have the effect of delaying completion of the merger, imposing additional costs on the merger or preventing the completion of the merger or causing the
abandonment of the merger, any of which may have a material adverse effect on the Company.

Proposals of legislation or regulatory changes
restricting participation on the Exchange could materially impact the Companys operations.

A number of legislative proposals
have been circulating in Congress this year that are ostensibly intended to reduce the alleged impact of non-commercial or speculator trading on oil prices by restricting participation in energy futures trading in U.S. markets. Such proposals
include, but are not limited to, imposing inflexible limits on open positions across all listed contract months, reducing the scope of hedge exemptions from current position limits that are available for bona fide hedging activity and
artificially increasing margins imposed on participants with open positions in Exchange contracts. Many economists believe that the surges in crude oil



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prices over the last year or so primarily reflect market supply-demand fundamentals. Nonetheless, in the event that new restrictions on U.S. energy
futures markets become law, the Exchanges trading volumes could be significantly reduced by making Exchange markets less attractive and/or by making competitive non-U.S. markets more attractive to market
participants. Consequently, the Companys revenues and profits could be materially and adversely affected.



|Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds
|------- | -----------------------------------------------------------

On November 22, 2006, NYMEX Holdings completed an initial public offering (IPO) of its common stock. The common stock from this offering was registered under the Securities Act of 1933, as amended,
pursuant to a Registration Statement on Form S-1 (File No. 333-135800) that was declared effective by the SEC on November 16, 2006. In connection with this offering, NYMEX Holdings sold 5,390,000 shares of its common stock, and certain
selling stockholders sold 1,110,000 shares of common stock held by them. In addition, NYMEX Holdings sold 975,000 shares of its common stock pursuant to the underwriters full exercise of their over-allotment option. J.P. Morgan Securities Inc.
and Merrill Lynch, Pierce Fenner & Smith Incorporated served as joint book-running managers, with Banc of America Securities LLC, Citigroup Global Markets Inc., Lehman Brothers Inc. and Sandler ONeill & Partners, L.P. serving
as co-managers.

The initial public offering price was $59.00 per share. The Company did not receive any proceeds from the shares of common
stock sold by the selling stockholders. Gross proceeds from the offering were approximately $375.5 million. Net proceeds the Company received, after deducting underwriting discounts and commissions of approximately $27.6 million and direct costs of
approximately $3.7 million, totaled approximately $344.2 million. Upon the completion of its IPO, a $10 million payment was made to owners of COMEX Division memberships in accordance with the 1994 COMEX Merger.

For the first half of 2008, the Company used approximately $11.2 million to acquire additional shares of IMAREX ASA and $1.5 million as an additional
capital contribution to its investment in the DME. In 2007, the Company used approximately $163.5 million of the net proceeds to fund its long-term investments, the most significant of which were the Companys investments in the Montréal
Exchange, IMAREX ASA and Optionable, Inc. The Company intends to use the remaining funds for general corporate purposes, capital expenditures and working capital. The Company may also use a portion of the funds to acquire or invest in businesses,
technologies, products or services. The funds are currently invested in accordance with the Companys investment policies, predominantly in U.S. government securities, until such time that they are needed.



|Item 3. | Defaults upon Senior Securities
|------- | -------------------------------

Not applicable



|Item 4. | Submission of Matters to a Vote of Security Holders
|------- | ---------------------------------------------------

At the Companys Annual Meeting held on May 20, 2008, the stockholders elected seven Class I directors, whose term expire in 2010, and two Class II directors, whose terms expire in 2009. Voting at the
meeting was as follows:



|                  |  |           |  |            |  |                   |  |           
|----------------- |  | --------- |  | ---------- |  | ----------------- |  | ----------
|Directors         |  | ClassType |  | Votes For  |  | WithheldAuthority |  | % VotesFor
|James Newsome     |  | I         |  | 55,971,854 |  | 5,901,837         |  | 59.55     
|Dennis Suskind    |  | I         |  | 56,769,088 |  | 5,104,608         |  | 60.40     
|William Ford      |  | I         |  | 56,689,321 |  | 5,184,375         |  | 60.32     
|William Maxwell   |  | I         |  | 56,817,825 |  | 5,055,871         |  | 60.45     
|John McNamara     |  | I         |  | 56,791,211 |  | 5,082,485         |  | 60.42     
|Stephen Ardizzone |  | I         |  | 53,898,093 |  | 7,975,603         |  | 57.35     
|A. George Gero    |  | I         |  | 54,275,423 |  | 7,598,273         |  | 57.75     
|Thomas Gordon     |  | II        |  | 55,902,551 |  | 5,971,145         |  | 59.48     
|Howard Gabler     |  | II        |  | 56,733,333 |  | 5,140,363         |  | 60.36     



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KPMG was ratified as the Companys independent registered public accounting firm for the year ended
December 31, 2008.



|           |  |           |  |          
|---------- |  | --------- |  | ---------
|58,724,760 |  | 2,028,724 |  | 1,120,212
|FOR        |  | AGAINST   |  | ABSTAIN  



|Item 5. | Other Information
|------- | -----------------

Not
applicable



|Item 6. | Exhibits
|------- | --------



|     |  |                                                                                                                                                                                                                                                                                                                                                                    
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.1  |  | Amendment No. 2, dated as of July 18, 2008, to Agreement and Plan of Merger, dated as of March 17, 2008 and amended as of June 30, 2008, by and among CME Group Inc., CMEG
NY Inc., NYMEX Holdings, Inc. and New York Mercantile Exchange, Inc. (incorporated herein by reference to Exhibit 2.1 to the Companys Current Report on Form 8-K, dated July 23, 2008).
|     | 
|3.1  |  | Certificate of Retirement of Series A-1 Common Stock, Series A-2 Common Stock, Series A-3 Common Stock, Series B-1 Common Stock, Series B-2 Common Stock and Series B-3 Common Stock of NYMEX
Holdings, Inc. effective as of July 29, 2008 (incorporated herein by reference to Exhibit 3.1 to the Companys Current Report on Form 8-K, dated August 1, 2008).    
|     | 
|10.1 |  | Amendment No. 1, dated as of July 18, 2008, to the Services Agreement, dated as of April 6, 2006 between Chicago Mercantile Exchange, Inc. and New York Mercantile Exchange,
Inc. (incorporated herein by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K, dated July 25, 2008).                                                             
|     | 
|31.1 |  | Certification of the Principal Executive Officer pursuant to § 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                              
|     | 
|31.2 |  | Certification of the Principal Financial Officer pursuant to § 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                              
|     | 
|32   |  | Certification of the Principal Executive Officer and Principal Financial Officer pursuant to § 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                              



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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



NYMEX HOLDINGS, INC.By:

/s/    JAMES E.
NEWSOMEName:

James E. NewsomeTitle:

President & CEO(Principal Executive Officer)Date: August 11, 2008By:

/s/    KENNETH D.
SHIFRINName:

Kenneth D. ShifrinTitle:

Chief Financial Officer(Principal Financial Officer)Date: August 11, 2008




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