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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-Q



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

For the Quarterly Period Ended March 31, 2006



| ̈ | 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 333-30332



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NYMEX Holdings, Inc.



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|                         |  |                                        
|------------------------ |  | ---------------------------------------
|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



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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, or a non-accelerated filer. See definition of
accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act).



|                         |  |                    |  |                         
|------------------------ |  | ------------------ |  | ------------------------
|Large accelerated filer ̈ |  | Accelerated filer ̈ |  | Non-accelerated filer  x

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 73,440,000 shares of the registrants $0.01 par value common stock were outstanding at May 12, 2006.



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##### Table of Contents

TABLE OF CONTENTS



|                              |  |                                                                                                                                                          |  |     
|----------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----
|                              |  |                                                                                                                                                          |  | Page
|PART I: FINANCIAL INFORMATION |  |                                                                                                                                                         
|                              |  |                                                                                                                                                         
|Item 1.                       |  | Financial Statements                                                                                                                                     |  |     
|                              |  |                                                                                                                                                         
|                              |  | Consolidated Statements of Income for the three months ended March 31, 2006 and 2005 (Unaudited)                                                         |  | 1   
|                              |  |                                                                                                                                                         
|                              |  | Consolidated Balance Sheets as of March 31, 2006 (Unaudited) and December 31, 2005                                                                       |  | 2   
|                              |  |                                                                                                                                                         
|                              |  | Consolidated Statements of Stockholders (Deficit) Equity for the three months ended March 31, 2006 (Unaudited) and for the year ended December 31, 2005 |  | 3   
|                              |  |                                                                                                                                                         
|                              |  | Consolidated Statements of Cash Flows for the three months ended March 31, 2006 and 2005 (Unaudited)                                                     |  | 4   
|                              |  |                                                                                                                                                         
|                              |  | Notes to the Unaudited Consolidated Financial Statements                                                                                                 |  | 5   
|                              |  |                                                                                                                                                         
|Item 2.                       |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                                                    |  | 21  
|                              |  |                                                                                                                                                         
|Item 3.                       |  | Quantitative and Qualitative Disclosures about Market Risk                                                                                               |  | 33  
|                              |  |                                                                                                                                                         
|Item 4.                       |  | Controls and Procedures                                                                                                                                  |  | 35  
|                              | 
|PART II: OTHER INFORMATION    |  |                                                                                                                                                         
|                              |  |                                                                                                                                                         
|Item 1.                       |  | Legal Proceedings                                                                                                                                        |  | 36  
|                              |  |                                                                                                                                                         
|Item 1A.                      |  | Risk Factors                                                                                                                                             |  | 36  
|                              |  |                                                                                                                                                         
|Item 2.                       |  | Unregistered Sales of Equity Securities and Use of Proceeds                                                                                              |  | 37  
|                              |  |                                                                                                                                                         
|Item 3.                       |  | Defaults upon Senior Securities                                                                                                                          |  | 37  
|                              |  |                                                                                                                                                         
|Item 4.                       |  | Submission of Matters to a Vote of Security Holders                                                                                                      |  | 37  
|                              |  |                                                                                                                                                         
|Item 5.                       |  | Other Information                                                                                                                                        |  | 38  
|                              |  |                                                                                                                                                         
|Item 6.                       |  | Exhibits                                                                                                                                                 |  | 38  
|                              |  |                                                                                                                                                         
|                              |  | Signatures                                                                                                                                               |  | 39  



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##### Table of Contents

PART I: FINANCIAL INFORMATION

Item 1.Financial Statements

NYMEX HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)



|                                                                   |  |                                      |            |      |   |       
|------------------------------------------------------------------ |  | ------------------------------------ | ---------- | ---- | - | ------
|                                                                   |  | Three Months EndedMarch 31,         
|                                                                   |  | 2006                                 |            | 2005
|                                                                   |  | (in thousands, except forshare data)
|Revenues                                                           |  |                                      |            |      |   |       
|Clearing and transaction fees                                      |  | $                                    | 92,420     |      | $ | 58,415
|Market data fees                                                   |  |                                      | 15,382     |      |   | 11,049
|Interest income from securities lending                            |  |                                      | 27,242     |      |   | 6,944 
|Other, net                                                         |  |                                      | 3,868      |      |   | 2,695 
|Investment income, net                                             |  |                                      | 1,460      |      |   | 89    
|                                                                   |  |                                      |            |      |   |       
|Total revenues                                                     |  |                                      | 140,372    |      |   | 79,192
|Interest expense from securities lending                           |  |                                      | 26,191     |      |   | 6,512 
|                                                                   |  |                                      |            |      |   |       
|Net revenues                                                       |  |                                      | 114,181    |      |   | 72,680
|                                                                   |  |                                      |            |      |   |       
|Expenses                                                           |  |                                      |            |      |   |       
|Salaries and employee benefits                                     |  |                                      | 18,314     |      |   | 15,103
|Occupancy and equipment                                            |  |                                      | 8,245      |      |   | 6,974 
|Depreciation and amortization, net of deferred credit amortization |  |                                      | 3,334      |      |   | 4,146 
|General and administrative                                         |  |                                      | 12,446     |      |   | 9,083 
|Professional services                                              |  |                                      | 3,326      |      |   | 8,384 
|Telecommunications                                                 |  |                                      | 1,678      |      |   | 1,736 
|Marketing                                                          |  |                                      | 913        |      |   | 751   
|Other expenses                                                     |  |                                      | 2,344      |      |   | 2,196 
|Interest expense                                                   |  |                                      | 1,668      |      |   | 1,725 
|Asset impairment and disposition losses                            |  |                                      | 200        |      |   | 8     
|                                                                   |  |                                      |            |      |   |       
|Total expenses                                                     |  |                                      | 52,468     |      |   | 50,106
|                                                                   |  |                                      |            |      |   |       
|Income before provision for income taxes                           |  |                                      | 61,713     |      |   | 22,574
|Provision for income taxes                                         |  |                                      | 28,080     |      |   | 10,152
|                                                                   |  |                                      |            |      |   |       
|Net income                                                         |  | $                                    | 33,633     |      | $ | 12,422
|                                                                   |  |                                      |            |      |   |       
|Weighted average common shares outstanding, basic and diluted      |  |                                      | 16,321,000 |      |   | 816   
|                                                                   |  |                                      |            |      |   |       
|Basic and diluted earnings per share                               |  | $                                    | 2.03       |      | $ | 15,223
|                                                                   |  |                                      |            |      |   |       

See accompanying notes to the unaudited consolidated financial statements.



1



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NYMEX HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS



|                                                                                                                                                    |  |                                      |           |   |                  |   |          
|--------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------ | --------- | - | ---------------- | - | ---------
|                                                                                                                                                    |  | (Unaudited) March 31,2006            |           |   | December 31,2005
|                                                                                                                                                    |  | (in thousands, except forshare data)
|Assets                                                                                                                                              |  |                                      |           |   |                  |   |          
|Cash and cash equivalents                                                                                                                           |  | $                                    | 17,754    |   |                  | $ | 35,664   
|Collateral from securities lending program                                                                                                          |  |                                      | 2,286,456 |   |                  |   | 2,314,618
|Securities purchased under agreements to resell                                                                                                     |  |                                      | 3,720     |   |                  |   | 6,900    
|Marketable securities, at market value                                                                                                              |  |                                      | 181,868   |   |                  |   | 100,993  
|Clearing and transaction fees receivable, net of allowance for member credits                                                                       |  |                                      | 28,429    |   |                  |   | 23,747   
|Prepaid expenses                                                                                                                                    |  |                                      | 4,244     |   |                  |   | 5,768    
|Deferred tax assets                                                                                                                                 |  |                                      | 1,748     |   |                  |   | 1,748    
|Margin deposits and guaranty funds                                                                                                                  |  |                                      | 43,362    |   |                  |   | 92,555   
|Other current assets                                                                                                                                |  |                                      | 10,205    |   |                  |   | 7,129    
|                                                                                                                                                    |  |                                      |           |   |                  |   |          
|Total current assets                                                                                                                                |  |                                      | 2,577,786 |   |                  |   | 2,589,122
|                                                                                                                                                    |  |                                     
|Property and equipment, net                                                                                                                         |  |                                      | 190,577   |   |                  |   | 190,036  
|Goodwill                                                                                                                                            |  |                                      | 16,329    |   |                  |   | 16,329   
|Other assets                                                                                                                                        |  |                                      | 16,135    |   |                  |   | 13,260   
|                                                                                                                                                    |  |                                      |           |   |                  |   |          
|Total assets                                                                                                                                        |  | $                                    | 2,800,827 |   |                  | $ | 2,808,747
|                                                                                                                                                    |  |                                      |           |   |                  |   |          
|Liabilities and Stockholders (Deficit) Equity                                                                                                      |  |                                      |           |   |                  |   |          
|Accounts payable and accrued liabilities                                                                                                            |  | $                                    | 31,335    |   |                  | $ | 17,627   
|Accrued salaries and related liabilities                                                                                                            |  |                                      | 8,832     |   |                  |   | 9,893    
|Payable under securities lending program                                                                                                            |  |                                      | 2,286,456 |   |                  |   | 2,314,618
|Margin deposits and guaranty funds                                                                                                                  |  |                                      | 43,362    |   |                  |   | 92,555   
|Income tax payable                                                                                                                                  |  |                                      | 28,870    |   |                  |   | 5,250    
|Other current liabilities                                                                                                                           |  |                                      | 72,517    |   |                  |   | 36,281   
|                                                                                                                                                    |  |                                      |           |   |                  |   |          
|Total current liabilities                                                                                                                           |  |                                      | 2,471,372 |   |                  |   | 2,476,224
|                                                                                                                                                    |  |                                     
|Grant for building construction deferred credit                                                                                                     |  |                                      | 107,775   |   |                  |   | 108,311  
|Long-term debt                                                                                                                                      |  |                                      | 83,098    |   |                  |   | 83,098   
|Retirement obligation                                                                                                                               |  |                                      | 11,944    |   |                  |   | 12,121   
|Deferred income taxes                                                                                                                               |  |                                      | 2,607     |   |                  |   | 2,098    
|Other liabilities                                                                                                                                   |  |                                      | 16,909    |   |                  |   | 17,113   
|                                                                                                                                                    |  |                                      |           |   |                  |   |          
|Total liabilities                                                                                                                                   |  |                                      | 2,693,705 |   |                  |   | 2,698,965
|                                                                                                                                                    |  |                                      |           |   |                  |   |          
|Commitments and contingencies                                                                                                                       |  |                                      |           |   |                  |   |          
|                                                                                                                                                    |  |                                     
|Cumulative redeemable convertible preferred stock, $0.01 par value; 8,160,000 shares authorized, issued and outstanding as of March 31,
2006Note 8 |  |                                      | 153,579   |   |                  |   |         
|                                                                                                                                                    |  |                                     
|Stockholders (deficit) equityNote 9                                                                                                               |  |                                      |           |   |                  |   |          
|Common stock, $0.01 par value; 816 shares authorized, issued and outstanding as of December 31, 2005                                                |  |                                      |          |   |                  |   |         
|Common stock, $0.01 par value; 81,600,000 shares authorized as of March 31, 2006; 73,440,000 issued and outstanding as of March 31,
2006            |  |                                      | 734       |   |                  |   |         
|Additional paid-in capital                                                                                                                          |  |                                      |          |   |                  |   | 69,631   
|Retained (deficit) earnings                                                                                                                         |  |                                      | (48,472   | ) |                  |   | 39,479   
|Accumulated other comprehensive income, net of tax                                                                                                  |  |                                      | 1,281     |   |                  |   | 672      
|                                                                                                                                                    |  |                                      |           |   |                  |   |          
|Total stockholders (deficit) equity                                                                                                                |  |                                      | (46,457   | ) |                  |   | 109,782  
|                                                                                                                                                    |  |                                      |           |   |                  |   |          
|Total liabilities and stockholders (deficit) equity                                                                                                |  | $                                    | 2,800,827 |   |                  | $ | 2,808,747
|                                                                                                                                                    |  |                                      |           |   |                  |   |          

See accompanying notes to the unaudited consolidated financial statements.



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NYMEX HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS (DEFICIT) EQUITY



|                                                                                                 |  |                                       |   |                            |        |     |                             |   |         |                                        |  |                                      |         |   |  |   |       |  |   |          |  
|------------------------------------------------------------------------------------------------ |  | ------------------------------------- | - | -------------------------- | ------ | --- | --------------------------- | - | ------- | -------------------------------------- |  | ------------------------------------ | ------- | - |  | - | ----- |  | - | -------- | -
|                                                                                                 |  | Common Stock                          |   | Additional Paid-in Capital |        |     | Retained (Deficit) Earnings |   |         | Accumulated Other Comprehensive Income |  | Total Stockholders (Deficit) Equity |        
|                                                                                                 |  | Shares                                |   |                            | Amount |     |                             |   |        
|                                                                                                 |  | (in thousands, except for share data) |  
|Balances at January 1, 2005                                                                      |  | 816                                   |   |                            | $      |    |                             | $ | 93,312  |                                        |  | $                                    | 33,470  |   |  | $ |      |  | $ | 126,782  |  
|Comprehensive income:                                                                            |  |                                       |   |                            |        |     |                             |   |         |                                        |  |                                      |         |   |  |   |       |  |   |          |  
|                                                                                                 |  |                                       |   |                            |        |     |                             |   |         |                                        |  |                                      |         |   |  |   |       |  |   |          |  
|Net income                                                                                       |  |                                      |   |                            |        |    |                             |   |        |                                        |  |                                      | 71,128  |   |  |   |      |  |   | 71,128   |  
|Unrealized gain on available-for-sale securities, net of deferred income taxes of $570           |  |                                      |   |                            |        |    |                             |   |        |                                        |  |                                      |        |   |  |   | 672   |  |   | 672      |  
|                                                                                                 |  |                                       |   |                            |        |     |                             |   |         |                                        |  |                                      |         |   |  |   |       |  |   |          |  
|Total comprehensive income                                                                       |  |                                       |   |                            |        |     |                             |   |         |                                        |  |                                      |         |   |  |   |       |  |   | 71,800   |  
|Dividends declared:                                                                              |  |                                       |   |                            |        |     |                             |   |         |                                        |  |                                      |         |   |  |   |       |  |   |          |  
|Common stock, $108,824/share                                                                     |  |                                      |   |                            |        |    |                             |   | (23,681 | )                                      |  |                                      | (65,119 | ) |  |   |      |  |   | (88,800  | )
|                                                                                                 |  |                                       |   |                            |        |     |                             |   |         |                                        |  |                                      |         |   |  |   |       |  |   |          |  
|Balances at December 31, 2005                                                                    |  | 816                                   |   |                            | $      |    |                             | $ | 69,631  |                                        |  | $                                    | 39,479  |   |  | $ | 672   |  | $ | 109,782  |  
|Dividends declared on January 11, 2006:                                                          |  |                                       |   |                            |        |     |                             |   |         |                                        |  |                                      |         |   |  |   |       |  |   |          |  
|Common stock, $36,765/share                                                                      |  |                                      |   |                            |        |    |                             |   |        |                                        |  |                                      | (30,000 | ) |  |   |      |  |   | (30,000  | )
|Comprehensive income:                                                                            |  |                                       |   |                            |        |     |                             |   |         |                                        |  |                                      |         |   |  |   |       |  |   |          |  
|Net income                                                                                       |  |                                      |   |                            |        |    |                             |   |        |                                        |  |                                      | 33,633  |   |  |   |      |  |   | 33,633   |  
|Change in unrealized gain on available-for-sale securities, net of deferred income taxes of $509 |  |                                      |   |                            |        |    |                             |   |        |                                        |  |                                      |        |   |  |   | 609   |  |   | 609      |  
|                                                                                                 |  |                                       |   |                            |        |     |                             |   |         |                                        |  |                                      |         |   |  |   |       |  |   |          |  
|Total comprehensive income                                                                       |  |                                       |   |                            |        |     |                             |   |         |                                        |  |                                      |         |   |  |   |       |  |   | 34,242   |  
|Retirement of common stock                                                                       |  | (816                                  | ) |                            |        |    |                             |   |        |                                        |  |                                      |        |   |  |   |      |  |   |         |  
|Issuance of common stock                                                                         |  | 73,440,000                            |   |                            |        | 734 |                             |   | (734    | )                                      |  |                                      |        |   |  |   |      |  |   |         |  
|Cumulative redeemable convertible preferred stock dividends and amortization of issue costs      |  |                                      |   |                            |        |    |                             |   |        |                                        |  |                                      | (481    | ) |  |   |      |  |   | (481     | )
|Dividends declared on March 21, 2006:                                                            |  |                                       |   |                            |        |     |                             |   |         |                                        |  |                                      |         |   |  |   |       |  |   |          |  
|Common stock, $2.18/share                                                                        |  |                                      |   |                            |        |    |                             |   | (68,897 | )                                      |  |                                      | (91,103 | ) |  |   |      |  |   | (160,000 | )
|                                                                                                 |  |                                       |   |                            |        |     |                             |   |         |                                        |  |                                      |         |   |  |   |       |  |   |          |  
|Balances at March 31, 2006 (Unaudited)                                                           |  | 73,440,000                            |   |                            | $      | 734 |                             | $ |        |                                        |  | $                                    | (48,472 | ) |  | $ | 1,281 |  | $ | (46,457  | )
|                                                                                                 |  |                                       |   |                            |        |     |                             |   |         |                                        |  |                                      |         |   |  |   |       |  |   |          |  

See accompanying notes to the unaudited consolidated financial statements.



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NYMEX HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)



|                                                                                  |  |                |          |   |      |   |            |  
|--------------------------------------------------------------------------------- |  | -------------- | -------- | - | ---- | - | ---------- | -
|                                                                                  |  | March 31,      |         
|                                                                                  |  | 2006           |          |   | 2005 |  
|                                                                                  |  | (in thousands) |         
|Cash flows from operating activities                                              |  |                |          |   |      |   |            |  
|Net income                                                                        |  | $              | 33,633   |   |      | $ | 12,422     |  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                |          |   |      |   |            |  
|Depreciation and amortization                                                     |  |                | 3,651    |   |      |   | 4,463      |  
|Amortization of intangibles                                                       |  |                | 219      |   |      |   | 219        |  
|Deferred grant credits                                                            |  |                | (661     | ) |      |   | (661       | )
|Deferred rental income                                                            |  |                | (169     | ) |      |   | (169       | )
|Deferred rent expense                                                             |  |                | (50      | ) |      |   | (41        | )
|Deferred income taxes                                                             |  |                |         |   |      |   |           |  
|Asset impairment and disposition loss                                             |  |                | 200      |   |      |   | 8          |  
|Decrease (increase) in operating assets:                                          |  |                |          |   |      |   |            |  
|Clearing and transaction fees receivable                                          |  |                | (4,682   | ) |      |   | (4,352     | )
|Prepaid expenses                                                                  |  |                | 1,524    |   |      |   | 51         |  
|Margin deposits and guaranty fund assets                                          |  |                | 49,193   |   |      |   | (255,456   | )
|Other current assets                                                              |  |                | (3,076   | ) |      |   | (159       | )
|Increase (decrease) in operating liabilities:                                     |  |                |          |   |      |   |            |  
|Accounts payable and accrued liabilities                                          |  |                | 13,708   |   |      |   | 1,662      |  
|Accrued salaries and related liabilities                                          |  |                | (1,061   | ) |      |   | 1,770      |  
|Margin deposits and guaranty fund liabilities                                     |  |                | (49,193  | ) |      |   | 255,456    |  
|Income tax payable                                                                |  |                | 23,620   |   |      |   | 1,901      |  
|Other current liabilities                                                         |  |                | 39,836   |   |      |   | 2,115      |  
|Other liabilities                                                                 |  |                | 140      |   |      |   | (1,194     | )
|Retirement obligation                                                             |  |                | (177     | ) |      |   | (158       | )
|                                                                                  |  |                |          |   |      |   |            |  
|Net cash provided by operating activities                                         |  |                | 106,655  |   |      |   | 17,877     |  
|                                                                                  |  |                |          |   |      |   |            |  
|Cash flows from investing activities                                              |  |                |          |   |      |   |            |  
|(Increase) decrease in collateral from securities lending program                 |  |                | 28,162   |   |      |   | (1,454,918 | )
|(Increase) decrease in securities purchased under agreements to resell            |  |                | 3,180    |   |      |   | (10,106    | )
|(Increase) decrease in marketable securities                                      |  |                | (80,875  | ) |      |   | (277       | )
|Capital expenditures                                                              |  |                | (4,392   | ) |      |   | (2,328     | )
|(Increase) decrease in other assets                                               |  |                | (1,976   | ) |      |   | 74         |  
|                                                                                  |  |                |          |   |      |   |            |  
|Net cash used in investing activities                                             |  |                | (55,901  | ) |      |   | (1,467,555 | )
|                                                                                  |  |                |          |   |      |   |            |  
|Cash flows from financing activities                                              |  |                |          |   |      |   |            |  
|Proceeds from issuance of preferred stock                                         |  |                | 160,000  |   |      |   |           |  
|Costs related to issuance of preferred stock                                      |  |                | (6,902   | ) |      |   |           |  
|Increase in obligation to return collateral under securities lending program      |  |                | (28,162  | ) |      |   | 1,454,918  |  
|Dividends paid                                                                    |  |                | (193,600 | ) |      |   | (3,500     | )
|                                                                                  |  |                |          |   |      |   |            |  
|Net cash provided by (used in) financing activities                               |  |                | (68,664  | ) |      |   | 1,451,418  |  
|                                                                                  |  |                |          |   |      |   |            |  
|Net increase (decrease) in cash and cash equivalents                              |  |                | (17,910  | ) |      |   | 1,740      |  
|Cash and cash equivalents, beginning of period                                    |  |                | 35,664   |   |      |   | 3,084      |  
|                                                                                  |  |                |          |   |      |   |            |  
|Cash and cash equivalents, end of period                                          |  | $              | 17,754   |   |      | $ | 4,824      |  
|                                                                                  |  |                |          |   |      |   |            |  

See accompanying notes to the unaudited consolidated financial statements.



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##### Table of Contents

NYMEX HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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. 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. When discussing NYMEX Holdings together with its subsidiaries, reference is being made to the Company.

In August 2004, NYMEX Europe Exchange Holdings Limited (Europe Holdings) was established as a private limited company incorporated under the laws of England and Wales and is a wholly-owned subsidiary of NYMEX Holdings. In March
2005, NYMEX Europe Limited (Europe Limited) was incorporated under the laws of England and Wales as an operating and wholly-owned subsidiary of Europe Holdings. Where appropriate, each European subsidiary will be discussed separately,
and collectively will be referred to as the Europe Exchange. Europe Exchange is an independent UK-based exchange which provides an open-outcry and electronic trading facility in London, England. All trades executed on Europe Exchange are
cleared through the Companys clearinghouse in New York. Europe Exchange commenced operations in September 2005.

In June 2005, the
Company and Tatweer Dubai LLC, 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), which is
jointly owned by the Company and Tatweer Dubai LLC, was incorporated as a limited company under the laws of Bermuda. DME Holdings is the sole 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. It is expected that the DME will initially offer sour crude and fuel oil products
for trading. The DME will be regulated by the Dubai Financial Services Authority, a regulatory body established within the DIFC. The Company anticipates that the DME will commence trading in the fourth quarter of 2006.

In March 2006, the stockholders of the Company approved a stock purchase agreement (the GA Agreement) with General Atlantic Partners 82,
L.P., GapStar, LLC, GAP Coinvestments III, LLC, GAP Coinvestments IV, LLC, GAP Coinvestments CDA, L.P. and GAPCO GMBH & Co. KG (collectively General Atlantic) whereby General Atlantic acquired a 10% equity interest in NYMEX
Holdings. The GA Agreement valued NYMEX Holdings equity at $1.6 billion, without giving effect to the value of the separate NYMEX Exchange trading rights. General Atlantic did not acquire any trading rights, all of which remained with the
owners of Class A memberships in NYMEX Exchange.

The Company exists principally to provide facilities to buy, sell and clear energy
and precious and base metals 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 Company believes that market participants choose to trade on
centralized markets such as the Exchange because of the liquidity those markets help to provide and because those markets perform an important price discovery function. 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.



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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. Trading on the Europe Exchange is regulated by the UKs
Financial Services Authority.

Significant Accounting Policies

The Companys significant accounting policies are described in the notes of the December 31, 2005 audited consolidated financial statements included in its Annual Report on Form 10-K.

Earnings per Share

The Company calculates
earnings per share in accordance with Statement of Financial Accounting Standards (SFAS) No. 128, Earnings per Share, and Emerging Issues Task Force (EITF) Topic 03-06, Participating Securities and the
Two-Class Method under FASB Statement No. 128. EITF 03-06 clarifies the use of the two-class method of calculating earnings per share as originally prescribed in SFAS No. 128 (see Note 10).

Basis of Presentation

The accompanying
unaudited 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. All significant intercompany transactions
and balances have been eliminated in consolidation. Certain reclassifications have been made to the unaudited consolidated financial statements to conform to the current presentation.

The accompanying unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes
thereto in Item 15(A) of NYMEX Holdings, Inc. Annual Report on Form 10-K for the year ended December 31, 2005.

2. Securities Lending

In 2005, the Company entered into an agreement with JPMorgan Chase & Co. (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 to third parties in return for cash
collateral. JPMorgan, in turn, invests the cash collateral overnight in various investments on behalf of the Company in accordance with the Companys internal investment guidelines. Interest expense is then paid to the third party for the cash
collateral the Company controlled during the transaction, and a fee is paid to JPMorgan for administering the transaction. The fee paid to JPMorgan is recorded in general and administrative expenses on the Companys consolidated statements of
income. At March 31, 2006, the fair value of the securities on loan was approximately $2.3 billion.

3. Collateralization

In connection with reverse repurchase agreements, the Company receives collateral that is held in custody by the Companys banks. At March 31,
2006, and December 31, 2005, the Company accepted collateral in the form of U.S. Treasury bills that it is permitted by contract or industry practice to sell or re-pledge. The fair value of such collateral at March 31, 2006 and
December 31, 2005 was $3.7 million and $6.9 million, respectively.

4. Allowance for Doubtful Accounts and Credits

Clearing and transaction fees receivable are carried net of allowances for member credits, which are based upon expected billing adjustments. Allowances
for member credits were $473,000 and $385,000 at March 31,



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2006 and December 31, 2005, respectively. The Company believes the allowances are adequate to cover member credits. The Company also believes the
likelihood of incurring material losses due to non-collectibility is remote and, therefore, no allowance for doubtful accounts is necessary.

An allowance for doubtful accounts was established for market data accounts receivable to cover potential non-collectible vendor receivables as well as future adjustments by the market data vendor customers. This allowance was $59,000 and
$78,000 at March 31, 2006 and December 31, 2005, respectively, which the Company believes is sufficient to cover potential bad debts and subsequent credits. At March 31, 2006, the combined amounts due from vendors with the ten highest
receivable balances represented 91% of the total accounts receivable balance. Accounts receivable for market data revenues are included in other current assets on the Companys consolidated balance sheets.

Other revenues consist of rental income from tenants leasing space in the Companys headquarters building, compliance fines assessed for violation
of trading rules and procedures, fees charged to members for the use of telephone equipment and trading booths provided by the Company, fees charged for access to the NYMEX ACCESS® electronic trading system and other miscellaneous revenues. Other revenues are recognized on an accrual basis in the
period during which the Company derives economic value, with the exception of compliance fines, which are recognized when cash is received. The Company has established a reserve for non-collectible receivables of other revenues in the amount of
$568,000 and $512,000 at March 31, 2006 and December 31, 2005, respectively, and believes the amount is sufficient to cover potential bad debts and subsequent credits. Accounts receivable for other revenues are included in other current
assets on the Companys consolidated balance sheets.

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,
ranging from $100,000 to $2.0 million, per division, based upon such clearing member firms reported regulatory capital, 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 $100 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 $130 million occurs.



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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 consolidated balance sheets, and are generally invested overnight in securities purchased under agreements to resell.

The following table sets forth margin deposits and Guaranty Fund balances held by the Company on behalf of clearing members at March 31, 2006 and
December 31, 2005 (in thousands):



|                                                        |  |                |            |                   |   |             |  |                |            |               |   |             |  |   |         |  |   |           
|------------------------------------------------------- |  | -------------- | ---------- | ----------------- | - | ----------- |  | -------------- | ---------- | ------------- | - | ----------- |  | - | ------- |  | - | ----------
|                                                        |  | March 31, 2006 |            | December 31, 2005
|                                                        |  | MarginDeposits |            | GuarantyFunds     |   | Total Funds |  | MarginDeposits |            | GuarantyFunds |   | Total Funds
|Cash and securities earning interest for NYMEX Holdings |  |                |            |                   |   |             |  |                |            |               |   |             |  |   |         |  |   |           
|Cash                                                    |  | $              | 8,043      |                   | $ |            |  | $              | 8,043      |               | $ | 14          |  | $ |        |  | $ | 14        
|Securities held for resale                              |  |                | 33,059     |                   |   | 2,260       |  |                | 35,319     |               |   | 88,031      |  |   | 4,510   |  |   | 92,541    
|                                                        |  |                |            |                   |   |             |  |                |            |               |   |             |  |   |         |  |   |           
|Total cash and securities                               |  |                | 41,102     |                   |   | 2,260       |  |                | 43,362     |               |   | 88,045      |  |   | 4,510   |  |   | 92,555    
|                                                        |  |                |            |                   |   |             |  |                |            |               |   |             |  |   |         |  |   |           
|Cash and securities earning interest for members        |  |                |            |                   |   |             |  |                |            |               |   |             |  |   |         |  |   |           
|Money market funds                                      |  |                | 5,032,700  |                   |   |            |  |                | 5,032,700  |               |   | 4,535,750   |  |   |        |  |   | 4,535,750 
|U.S. Treasuries                                         |  |                | 10,029,874 |                   |   | 150,061     |  |                | 10,179,935 |               |   | 11,513,902  |  |   | 142,866 |  |   | 11,656,768
|Letters of credit                                       |  |                | 2,189,902  |                   |   |            |  |                | 2,189,902  |               |   | 2,091,909   |  |   |        |  |   | 2,091,909 
|                                                        |  |                |            |                   |   |             |  |                |            |               |   |             |  |   |         |  |   |           
|Total cash and securities                               |  |                | 17,252,476 |                   |   | 150,061     |  |                | 17,402,537 |               |   | 18,141,561  |  |   | 142,866 |  |   | 18,284,427
|                                                        |  |                |            |                   |   |             |  |                |            |               |   |             |  |   |         |  |   |           
|Total funds                                             |  | $              | 17,293,578 |                   | $ | 152,321     |  | $              | 17,445,899 |               | $ | 18,229,606  |  | $ | 147,376 |  | $ | 18,376,982
|                                                        |  |                |            |                   |   |             |  |                |            |               |   |             |  |   |         |  |   |           

6. 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 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 March 31, 2006 and December 31, 2005, the notes payable balance,
including the current portion, was $85.9 million.

7. Stock Purchase Agreement

On March 13, 2006, a special meeting of the stockholders of the Company was held. At that time, the stockholders approved and adopted an amended and
restated certificate of incorporation, amended and restated bylaws and a merger with NYMEX Merger Sub, Inc., a newly-formed Delaware corporation and a wholly-owned subsidiary of NYMEX Holdings (Merger Sub). These actions, along with the
adoption of an amended and restated certificate of incorporation and amended and restated bylaws of NYMEX Exchange, revised NYMEX Holdings capital structure in order to sell equity to General Atlantic Partners 82, L.P., GapStar, LLC, GAP
Coinvestments III, LLC, GAP Coinvestments IV, LLC, GAP Coinvestments CDA, L.P. and GAPCO GMBH & Co. KG (collectively General Atlantic) pursuant to a previously-disclosed stock purchase agreement (as



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amended, the GA Agreement). The GA Agreement valued NYMEX Holdings equity at $1.6 billion, without giving effect to the value of the
separate NYMEX Exchange trading rights. General Atlantic did not acquire any trading rights, all of which remained with the owners of Class A memberships in NYMEX Exchange.

On March 14, 2006, pursuant to the terms and conditions of the GA Agreement, the Company issued and sold an aggregate of 8,160,000 shares of its
newly-created Series A Cumulative Redeemable Convertible Preferred Stock, par value $0.01 per share (the Preferred Stock), to General Atlantic for an aggregate purchase price of $160 million in cash and an additional $10 million which
will be paid on the closing date of an initial public offering if an initial public offering occurs in 2006 which values NYMEX Holdings equity at $2 billion or greater. The Preferred Stock represented 10% of NYMEX Holdings outstanding
capital stock immediately following its issuance.

The Merger

To facilitate the GA Agreement, Merger Sub merged with and into NYMEX Holdings which was the surviving corporation. Merger Sub was formed solely for the purpose of effecting the merger and had no operating history and
nominal assets, liabilities and capitalization.

NYMEX Holdings is the parent company of, and holds the sole outstanding Class B membership
in, NYMEX Exchange. The Class B membership in NYMEX Exchange holds all voting and economic rights in NYMEX Exchange, except for the open outcry trading protections granted to the owners of Class A memberships in NYMEX Exchange. Class A
memberships in NYMEX Exchange are trading rights but are not entitled to any voting or economic rights in NYMEX Exchange, except for the open outcry trading protections granted to the owners of Class A memberships in NYMEX Exchange. Previously,
the common stock of NYMEX Holdings and the corresponding Class A membership interest in NYMEX Exchange were stapled together and, therefore, were only able to be transferred jointly. Upon consummation of the GA Agreement, the common
stock of NYMEX Holdings was de-stapled from the Class A membership interests in NYMEX Exchange.

Conversion of Shares

Each of the original 816 shares of NYMEX Holdings common stock issued and outstanding immediately prior to the merger were
automatically converted into the right to receive 90,000 shares of the common stock of NYMEX Holdings. The 90,000 shares were comprised of 30,000 shares of Series A-1 Common Stock; 30,000 shares of Series A-2 Common Stock; and 30,000 shares of
Series A-3 Common Stock. Total authorized shares of common stock are 81,600,000 shares which consist of the 73,440,000 issued shares of Series A-1, Series A-2 and Series A-3 common stock and 8,160,000 shares reserved for issuance upon conversion of
the Preferred Stock. Upon conversion, the Preferred Stock will no longer be outstanding or available for issuance. In addition, the sole share of common stock of Merger Sub held by NYMEX Holdings was cancelled.

Use of Proceeds

The gross proceeds from the
GA Agreement were distributed to NYMEX Holdings stockholders in the form of an extraordinary cash distribution (the Special Dividend). Accordingly, each stockholder received approximately $196,078 per share on a pre-merger basis or
approximately $2.18 per share on a post-merger basis. In the event that the additional $10 million is paid by General Atlantic on the closing date of an initial public offering, the $10 million will also be distributed in the form of an
extraordinary cash distribution to NYMEX Holdings stockholders of record as of March 13, 2006, the day immediately prior to the closing of the GA Agreement (the Additional Dividend). Each such stockholder would receive
approximately $12,255 per share on a pre-merger basis or approximately $0.14 per share on a post-merger basis. General Atlantic did not participate in the Special Dividend and will not participate in the Additional Dividend, if any.



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Series A Cumulative Redeemable Convertible Preferred Stock

Pursuant to the terms and conditions of the Preferred Stock:



| |  |  | the holders of the Preferred Stock are entitled to vote, on an as-if converted basis, on all matters entitled to be voted on by holders of shares of common stock voting together as
a single class with the common stock;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | so long as General Atlantic owns at least 80% of the number of shares of Preferred Stock initially acquired by it (including for purposes of this calculation the shares of NYMEX
Holdings common stock issued or issuable upon conversion of the Preferred Stock), then (i) prior to an initial public offering, General Atlantic, voting as a separate class, will be entitled to designate and elect one director of NYMEX Holdings
and NYMEX Exchange, and (ii) following an initial public offering, General Atlantic will be entitled to designate, and the Companys board of directors will nominate and unanimously recommend that its stockholders elect, one director of
NYMEX Holdings and NYMEX Exchange, and in each case, such individual must be a managing director of General Atlantic LLC. In addition, so long as General Atlantic owns at least 80% of the number of shares of Preferred Stock initially acquired by it
(including for purposes of this calculation the shares of NYMEX Holdings common stock issued or issuable upon conversion of the Preferred Stock), then General Atlantic will be entitled to designate one non-voting observer to the boards of directors
who must be reasonably acceptable to the Company. This right is particular to General Atlantic (or its affiliates) and is not transferable to any other person who purchases the Preferred Stock from General Atlantic, which may only occur subject to
the transfer provisions described below;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the holders of Preferred Stock are entitled to receive, on an as-if converted basis, all dividends or other distributions made to the holders of shares of common stock, but the
holders of Preferred Stock did not participate in the Special Dividend nor will they participate in the Additional Dividend, if any;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | if the Company consummates an initial public offering on or prior to June 30, 2008, then no mandatory cash dividends will be payable or paid with respect to the shares of
Preferred Stock;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | if the Company has not consummated an initial public offering on or prior to June 30, 2008, all accrued and unpaid dividends from the closing date will be paid by the Company
in cash, or at the option of the Company, by appropriately increasing the number of shares of common stock into which the Preferred Stock is convertible (the Stock Election), to the holders of the Preferred Stock no later than
September 30, 2008, at an annual rate of 5.5%. In addition, at the end of each quarter following June 30, 2008, the Company will pay, in cash, dividends on the Preferred Stock at an annual rate of 5.5%;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | if by the fifth anniversary of the closing of the GA Agreement the Company has not consummated an initial public offering or a sale, merger or other business combination, then the
holders of the majority of the shares of the Preferred Stock will have the right to cause the Company to redeem all of the shares of Preferred Stock at the original purchase price, plus accrued and unpaid dividends. This redemption payment will be
payable over three years with interest at the annual rate of 5%, although the Company would have the right to prepay it at any time with no prepayment penalty; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | prior to an initial public offering and so long as General Atlantic owns at least 80% of the number of shares of Preferred Stock initially acquired by it (including the shares of
common stock issued or issuable upon conversion of the Preferred Stock), certain major actions may not be undertaken without the consent of General Atlantic, such as:
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

a. any sale, merger or other business combination of NYMEX Holdings which constitutes a change of control, unless (a) the
consideration is cash or stock which is listed and freely tradable without restriction on the New York Stock Exchange or The NASDAQ Stock Market and (b) the aggregate proceeds to the holders of Preferred Stock are greater than $272,000,000
(which is 1.7 times General Atlantics original purchase price);



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b. the issuance of any shares of capital stock of NYMEX Holdings ranking senior or on
parity with the Preferred Stock;

c. the creation, incurrence, issuance, assumption or guarantee of any indebtedness if the
Companys ratio of consolidated indebtedness to its earnings before interest, taxes, depreciation and amortization, generally referred to as EBITDA, would exceed 2:1 on a pro forma basis;

d. any change in the size of the board of directors or any creation or change in the size of any committee of the board of directors;

e. any amendment, modification or restatement of (i) the terms of the Preferred Stock (whether by merger,
consolidation, business combination or otherwise), (ii) the NYMEX Holdings certificate of incorporation, or (iii) the certificate of incorporation or bylaws of NYMEX Exchange, in the case of clauses (ii) or (iii), only in the event of
an adverse affect on the rights, preferences, qualifications, limitations or restrictions of the Preferred Stock (whether by merger, consolidation, business combination or otherwise); and

f. the redemption of any shares of capital stock of NYMEX Holdings or any subsidiary or common stock equivalents.



| |  |  | each share of the Preferred Stock is convertible, at the option of the holder, into one share of common stock, subject to adjustment for the Stock Election and in the event that
NYMEX Holdings sells shares of stock prior to an initial public offering at a price less than that paid by General Atlantic. Additionally, upon the consummation of an initial public offering, all of the shares of Preferred Stock will automatically
convert into an equivalent number of shares of common stock, subject to adjustment as described above. Once converted into common stock, such shares of Preferred Stock will no longer be outstanding or available for issuance; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Upon the occurrence or consummation of one of the following events: a liquidation; a winding up; a dissolution; a sale; a merger or other business combination of NYMEX Holdings; or
a sale of all or substantially all of its assets (an Event), holders of the Preferred Stock will be paid for each share of Preferred Stock held thereby, before any payment or distribution is made to any common stock or preferred stock
that does not rank equally with or senior to the Preferred Stock. The amount shall be equal to the greater of (i) $160,000,000 for the 8,160,000 shares of the Preferred Stock plus accrued and unpaid dividends or (ii) the aggregate amount
payable upon the occurrence of an Event with respect to the number of shares of common stock into which such share of Preferred Stock is convertible immediately prior to such an Event.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Transfer Restrictions

To avoid creating an
accidental illiquid market in NYMEX Holdings common stock following the de-stapling, new restrictions were imposed upon the transfer of NYMEX Holdings common stock that will be in effect until an initial public offering is
conducted. Currently, the shares of Series A-1, Series A-2 and Series A-3 Common Stock are transferable only to (i) an owner of one or more Class A memberships issued by NYMEX Exchange, (ii) an owner of one or more shares of NYMEX
Holdings common stock or (iii) General Atlantic, provided that General Atlantic is not permitted to acquire shares of NYMEX Holdings common stock from other stockholders unless no other stockholder or owner of a Class A
membership offers to purchase such shares and, provided further that General Atlantic has agreed that its ownership will be limited to a maximum of 20% of NYMEX Holdings voting power. Certain limited exceptions to these transfer restrictions,
such as permitted transfers to a spouse, child or trust, are set forth in Article 5(e) of the Amended and Restated Certificate of Incorporation of NYMEX Holdings.



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In the event NYMEX Holdings does conduct an initial public offering, additional restrictions upon the
transfer of its common stock are intended to create an orderly market in NYMEX Holdings common stock. The shares of common stock that are currently issued will not be transferable after an initial public offering during Restricted Periods. These
restrictions are similar to customary underwriter lock-ups in initial public offerings. The term Restricted Period means each of the periods commencing on the date of the initial public offering and ending:

(i) with respect to Series A-1 Common Stock, 180 days thereafter;

(ii) with respect to Series A-2 Common Stock, 360 days thereafter; and

(iii) with respect to Series A-3 Common Stock, 540 days thereafter.

None of the currently outstanding shares of common stock will be subject to restrictions on transfer as of the 540th day after an initial public
offering. Immediately following the expiration of the relevant Restricted Period, the applicable shares of common stock will automatically convert, without any action by the holder, into the same number of shares of common stock which do not have
transfer restrictions.

General Atlantic has agreed to the same lock-up provisions as part of the Registration Rights Agreement, which will
also be imposed on any transferee of General Atlantics shares.

Additionally, no stockholder will be permitted to acquire shares of
NYMEX Holdings voting stock which would cause such stockholder to beneficially own more than a maximum of 10% of NYMEX Holdings voting power, other than General Atlantic which will be limited to a maximum of 20%.

Composition of Board of Directors

The board
of directors of NYMEX Holdings and NYMEX Exchange consisted of twenty-five directors at March 31, 2006. In accordance with the GA Agreement, the annual meeting of stockholders was held on May 1, 2006 at which time the board of directors
was reduced from twenty-five to fifteen directors. Additionally, the entire board of directors will be elected annually each May.

8. Cumulative
Redeemable Convertible Preferred Stock

The Preferred Stock issued in connection with the GA Agreement has a redemption feature that
subjected it to an analysis of equity versus liability in accordance with SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity. The Preferred Stock embodies a conditional
obligation to redeem the instrument upon events not certain to occur and accordingly is not classified as a liability until such event is certain to occur. The condition is that by the fifth anniversary of the closing of the GA Agreement the Company
has not consummated an initial public offering or a sale, merger or other business combination.

In accordance with SEC Staff Announcement
Topic No. D-98, Classification and Measurement of Redeemable Securities, a company that issues preferred shares that are conditionally redeemable is required to account for the securities in accordance with Accounting Series Release
No. 268, Presentation in Financial Statements of Redeemable Preferred Stocks, which states that the shares are to be recorded on the companys balance sheet between total liabilities and stockholders equity as a temporary
equity item. The amount in temporary equity is the proceeds from the sale of the Preferred Stock, net of issuance costs of $6.9 million. In addition, dividends on the Preferred Stock and accretions of the issuance costs (both charges to retained
earnings) are added to arrive at the balance at March 31, 2006.



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NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS(Continued)



9. Consolidated Statements of Stockholders (Deficit) Equity

Prior to the Companys demutualization in November 2000, earnings and paid-in-capital were combined and reported in Members Equityon
its consolidated financial statements. At the date of demutualization, the balance in Members Equitywas transferred to Additional Paid-in-Capital.Subsequent to demutualization, earnings are being reported in Retained
Earningson the Companys consolidated statements of stockholders equity.

On March 21, 2006 the board of directors of
the Company voted to declare and distribute a special cash dividend of $160 million to stockholders of record as of March 13, 2006 in connection with the GA Agreement (see Note 7). On the date of declaration, the balance in Retained Earningswas not sufficient to absorb the dividend due to the classification of the proceeds from the GA Agreement as a temporary equity item (see Note 8). As such, the balance in Additional Paid-in-Capitalwas reduced to zero and the remainder of
the $160 million dividend was a reduction to Retained Earnings. This resulted in a deficit in Retained Earningsas well as Total Stockholders Equityat March 31, 2006. If the Preferred Stock (see Note 8) is converted
into common stock, which could occur, in accordance with the GA Agreement, at the option of the holder or automatically in the event of an initial public offering by the Company, the balance in temporary equity would be transferred to permanent
equity as an increase to Additional Paid-in-Capital.

10. Earnings per Share

The Company calculates earnings per share in accordance with Statement of Financial Accounting Standards (SFAS) No. 128, Earnings per
Share, and Emerging Issues Task Force (EITF) Topic 03-06, Participating Securities and the Two-Class Method under FASB Statement No. 128. EITF 03-06 clarifies the use of the two-class method of calculating earnings per
share as originally prescribed in SFAS No. 128.

During the period, the Company had 8,160,000 shares of convertible preferred stock
outstanding which were convertible into an equal amount of common stock (see Note 7). The Preferred Stock is considered to be a participating security under SFAS No. 128 because the holders of such securities are entitled to receive all
dividends or other distributions made to the holders of shares of common stock. EITF 03-06 requires that participating securities be included in the computation of basic earnings per share using the two-class method, if the effect would be dilutive
to earnings per share. Earnings available to common stockholders is calculated by subtracting from net income the dividends on preferred shares and the accretion of the preferred stock issuance costs. Basic earnings per share is earnings available
to common stockholders divided by the weighted average number of common shares outstanding during the period.

Diluted earnings per share
reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. The Company considers its preferred stock as dilutive. The Company calculates diluted earnings per
share using the if-converted method. Under this method, the dividends on preferred shares and the accretion of the preferred stock issuance costs are added back to earnings available to common stockholders to arrive at the numerator. The
weighted average of the preferred stock outstanding is added to the weighted average common shares outstanding to arrive at the denominator. If the effect of the if-converted method is anti-dilutive, the effect on diluted earnings per share of the
Preferred Stock is disregarded.



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NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS(Continued)



The following is a reconciliation of the Companys net income and weighted average shares for
calculating basic and diluted earnings per share (in thousands, except for share data):



|                                                              |  |                             |            |      |   |       
|------------------------------------------------------------- |  | --------------------------- | ---------- | ---- | - | ------
|                                                              |  | Three Months EndedMarch 31,
|                                                              |  | 2006                        |            | 2005
|Net income                                                    |  | $                           | 33,633     |      | $ | 12,422
|Less: Accrued preferred stock dividends                       |  |                             | 416        |      |   |      
|Accretion of preferred stock issuance costs                   |  |                             | 65         |      |   |      
|                                                              |  |                             |            |      |   |       
|Earnings available to common stockholders                     |  | $                           | 33,152     |      | $ | 12,422
|                                                              |  |                             |            |      |   |       
|Weighted average common shares outstanding                    |  |                             | 14,689,000 |      |   | 816   
|Participating securitiesconvertible preferred stock          |  |                             | 1,632,000  |      |   |      
|                                                              |  |                             |            |      |   |       
|Weighted average common shares outstandingbasic and dilutive |  |                             | 16,321,000 |      |   | 816   
|                                                              |  |                             |            |      |   |       

The calculation of diluted earnings per share results in an anti-dilutive effect and, therefore,
diluted earnings per share is the same as basic earnings per share.

11. Incentive Programs

The Company has various discretionary rebate programs that reduce operating costs of certain market participants. These programs were designed to provide
incentives to third parties to establish business with the Company and are recorded in general and administrative expenses on the consolidated statements of income. During the three-month periods ended March 31, 2006 and 2005, these programs
totaled $6.1 million and $2.8 million, respectively.

12. 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 merger agreement, 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 by $800,000 in 2005 and expects to do so in 2006. 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.

13. Postretirement Benefits other
than Pensions

The Companys postretirement benefit costs are developed from actuarial valuations. Inherent in these valuations are
key assumptions, including the discount rate and expected long-term rate of return on plan assets. Material changes in its postretirement benefit costs may occur in the future due to changes in these assumptions,



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changes in the number of plan participants, changes in the level of benefits provided, and changes in asset levels. 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.

In December 2003, the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the Act) became law in the United States. The Act introduces a prescription drug benefit under Medicare as well
as a federal subsidy to sponsors of retiree health care benefit plans that provide a benefit that is at least actuarially equivalent to the Medicare benefit. In accordance with FASB Staff Position No. 106-1, Accounting and Disclosure
Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003, the Company elected to defer recognition of the effects of the Act in any measures of the benefit obligation or cost. In May 2004, the FASB issued
Staff Position No. 106-2 (FAS No. 106-2) under the same title. FAS No. 106-2 provides guidance on accounting for the benefits attributable to new government subsidies for companies that provide prescription drug benefits
to retirees. The Company has concluded that it will likely not be eligible to receive a subsidy. Therefore, the Act is not expected to have a material effect on the Companys consolidated results of operations, financial position or cash flows.
The measurement date used to determine postretirement benefit measures for the postretirement benefit plan is December 31 of each year.

Accrued postretirement benefit costs are included in other non-current liabilities in the consolidated balance sheets. The accrued postretirement obligations recorded in the balance sheet at March 31, 2006 and December 31, 2005
exceed the amount of the accumulated obligations.

The following table presents the funded status of such plans, reconciled with amounts
recognized in the Companys unaudited consolidated financial statements (in thousands):



|                                             |  |                             |     |   |      |   |     |  
|-------------------------------------------- |  | --------------------------- | --- | - | ---- | - | --- | -
|                                             |  | Three Months EndedMarch 31, |    
|                                             |  | 2006                        |     |   | 2005 |  
|Service costs                                |  | $                           | 109 |   |      | $ | 88  |  
|Interest costs                               |  |                             | 115 |   |      |   | 88  |  
|Amortization of prior service costs          |  |                             | (14 | ) |      |   | (14 | )
|Amortization of net (gain) loss              |  |                             | 22  |   |      |   | 6   |  
|                                             |  |                             |     |   |      |   |     |  
|Total net period postretirement benefit cost |  | $                           | 232 |   |      | $ | 168 |  
|                                             |  |                             |     |   |      |   |     |  

14. Joint Venture

FASB Interpretation No. 46, Consolidation of Variable Interest Entities, an Interpretation of Accounting Research Bulletin No. 51 (FIN 46) and its amendment FIN 46(R) (revised December 2003) provides
guidance for determining when an entity should consolidate another entity that meets the definition of a variable interest entity. Special purpose entities and other types of entities are assessed for consolidation under this guidance. A variable
interest entity is required to be consolidated if the Company will absorb a majority of the expected losses, will receive a majority of the expected residual returns, or both. An entity that consolidates a variable interest entity is called the
primary beneficiary.

As disclosed in Note 1 to the consolidated financial statements, the Company has entered into a joint venture
agreement with Tatweer Dubai LLC to form DME Holdings. The Company will be 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. The Companys maximum exposure to a loss



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from the joint venture is limited to its capital investment, which at March 31, 2006 was approximately $4.0 million. During 2005, the Company made an
initial capital contribution of $2.5 million and in the first quarter of 2006 made a second capital contribution of $2.5 million to the joint venture. The Company accounts for its investment under the equity method of accounting whereby its
investment is adjusted by any gain or loss it recognizes from the joint venture. For the three months ended March 31, 2006, the Company incurred a loss of approximately $0.4 million, which is recorded in other expenses on the consolidated
statements of income. Although the Company believes that DME Holdings is a variable interest entity, it does not believe that it is the primary beneficiary and, therefore, did not consolidate DME Holdings in its results of operations.

15. Lease Termination Costs

The Company leases
17,000 square feet of space at 22 Cortlandt Street in New York, New York. During the first quarter of 2006, the Company negotiated with the landlord for an early termination of the lease. In accordance with FAS No. 146, Accounting for Costs
Associated with Exit or Disposal Activities(FAS No. 146), the Company recorded a charge in the current quarter for the amount to be paid. The charge is recorded in occupancy and equipment on the Companys consolidated
statements of income for the quarter ended March 31, 2006.

The following tables summarize the activity related to the lease
termination in accordance with FAS No. 146 (in thousands):



|                              |  |                      |       |  |                              |                      |   |      
|----------------------------- |  | -------------------- | ----- |  | ---------------------------- | -------------------- | - | -----
|                              |  | LeaseTeminationCosts |       |  |                              | LeaseTeminationCosts
|Total expected to be incurred |  | $                    | 1,800 |  | Liability at January 1, 2006 |                      | $ |     
|                              |  |                      |       |  |                              |                      |   |      
|Current period charge         |  | $                    | 1,800 |  | Current period charge        |                      |   | 1,800
|                              |  |                      |       |  |                              |                      |   |      
|Liability at March 31, 2006   |  | $                    | 1,800 |  | Current period payments      |                      |   |     
|                              |  |                      |       |  |                              |                      |   |      
|                              |  |                      |       |  | Liability at March 31, 2006  |                      | $ | 1,800
|                              |  |                      |       |  |                              |                      |   |      

16. Supplemental Disclosures of Cash Flow Information

Supplemental disclosures of cash flow information for the three months ended March 31, 2006 and 2005 are as follows:



|                                                 |  |                |        |      |   |      
|------------------------------------------------ |  | -------------- | ------ | ---- | - | -----
|                                                 |  | March 31,     
|                                                 |  | 2006           |        | 2005
|                                                 |  | (in thousands)
|Cash paid for:                                   |  |                |        |      |   |      
|Interest                                         |  | $              | 26,194 |      | $ | 6,519
|                                                 |  |                |        |      |   |      
|Income taxes                                     |  | $              | 4,458  |      | $ | 8,250
|                                                 |  |                |        |      |   |      
|Non-cash investing and financing activities:     |  |                |        |      |   |      
|Unrealized gain on available-for-sale securities |  | $              | 1,118  |      | $ |     
|                                                 |  |                |        |      |   |      
|Issuance of common stock                         |  | $              | 734    |      | $ |     
|                                                 |  |                |        |      |   |      

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. In addition, Open Outcry includes the trading and



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NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS(Continued)



clearing of Europe Limited futures contracts on the trading floor of the Companys London subsidiary, which opened during the third quarter of 2005.
Electronic Trading and Clearing consists of NYMEX ACCESS®, NYMEX ClearPort®
Trading and NYMEX ClearPort® Clearing. The
Corporate/Other column represents income earned on the Companys securities lending activities and investments net of fees, interest expense incurred on its obligations, fees incurred on its securities lending activities and losses incurred
from the DME joint venture. 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. Depreciation and amortization and other operating expenses (excluding interest, securities lending fees and losses from the DME joint venture) are allocated based on the proportion of total revenues attributed to
each segment. The prior year segment information has been reclassified to reflect this methodology of reporting each segment.

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



|                                                          |  |                                   |        |                             |   |                  |  |   |        |   |  |   |        
|--------------------------------------------------------- |  | --------------------------------- | ------ | --------------------------- | - | ---------------- |  | - | ------ | - |  | - | -------
|                                                          |  | Three Months Ended March 31, 2006
|                                                          |  | OpenOutcry                        |        | ElectronicTrading &Clearing |   | Corporate /Other |  |   | Total 
|Net revenues                                              |  | $                                 | 63,460 |                             | $ | 48,210           |  | $ | 2,511  |   |  | $ | 114,181
|Depreciation and amortization                             |  |                                   | 1,895  |                             |   | 1,439            |  |   |       |   |  |   | 3,334  
|Other operating expenses                                  |  |                                   | 26,600 |                             |   | 20,207           |  |   | 2,327  |   |  |   | 49,134 
|                                                          |  |                                   |        |                             |   |                  |  |   |        |   |  |   |        
|Income before provision for income taxes                  |  |                                   | 34,965 |                             |   | 26,564           |  |   | 184    |   |  |   | 61,713 
|Provision for income taxes                                |  |                                   | 15,909 |                             |   | 12,087           |  |   | 84     |   |  |   | 28,080 
|                                                          |  |                                   |        |                             |   |                  |  |   |        |   |  |   |        
|Net income                                                |  | $                                 | 19,056 |                             | $ | 14,477           |  | $ | 100    |   |  | $ | 33,633 
|                                                          |  |                                   |        |                             |   |                  |  |   |        |   |  |   |        
|                                                          | 
|                                                          |  | Three Months Ended March 31, 2005
|                                                          |  | OpenOutcry                        |        | ElectronicTrading &Clearing |   | Corporate /Other |  |   | Total 
|Net revenues                                              |  | $                                 | 50,318 |                             | $ | 21,841           |  | $ | 521    |   |  | $ | 72,680 
|Depreciation and amortization                             |  |                                   | 2,891  |                             |   | 1,255            |  |   |       |   |  |   | 4,146  
|Other operating expenses                                  |  |                                   | 30,771 |                             |   | 13,356           |  |   | 1,833  |   |  |   | 45,960 
|                                                          |  |                                   |        |                             |   |                  |  |   |        |   |  |   |        
|Income (loss) before provision (benefit) for income taxes |  |                                   | 16,656 |                             |   | 7,230            |  |   | (1,312 | ) |  |   | 22,574 
|Provision (benefit) for income taxes                      |  |                                   | 7,489  |                             |   | 3,253            |  |   | (590   | ) |  |   | 10,152 
|                                                          |  |                                   |        |                             |   |                  |  |   |        |   |  |   |        
|Net income (loss)                                         |  | $                                 | 9,167  |                             | $ | 3,977            |  | $ | (722   | ) |  | $ | 12,422 
|                                                          |  |                                   |        |                             |   |                  |  |   |        |   |  |   |        

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.

18. 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, operating leases, a capital lease and other contracts. A summary of the Companys
future cash payments associated with its contractual cash



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obligations outstanding as of March 31, 2006, 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
|                              |  | 2006                   |        | 2007 |   | 2008   |  | 2009 |        | 2010 |   | Thereafter |  | Total
|                              |  | (in thousands)        
|Contractual Obligations       |  |                        |        |      |   |        |  |      |        |      |   |            |  |       |        |  |   |         |  |   |        
|Long-term debt principal      |  | $                      | 2,817  |      | $ | 2,817  |  | $    | 2,817  |      | $ | 2,817      |  | $     | 2,817  |  | $ | 71,830  |  | $ | 85,915 
|Long-term debt interest       |  |                        | 6,626  |      |   | 6,416  |  |      | 6,205  |      |   | 5,994      |  |       | 5,783  |  |   | 41,786  |  |   | 72,810 
|Operating leasesfacilities   |  |                        | 2,712  |      |   | 3,455  |  |      | 3,431  |      |   | 3,458      |  |       | 3,737  |  |   | 7,734   |  |   | 24,527 
|Operating leasesequipment    |  |                        | 1,334  |      |   | 1,232  |  |      | 732    |      |   | 33         |  |       |       |  |   |        |  |   | 3,331  
|Capital lease                 |  |                        | 205    |      |   |       |  |      |       |      |   |           |  |       |       |  |   |        |  |   | 205    
|Other long-term obligations   |  |                        | 800    |      |   | 800    |  |      | 800    |      |   | 800        |  |       | 800    |  |   | 7,003   |  |   | 11,003 
|                              |  |                        |        |      |   |        |  |      |        |      |   |            |  |       |        |  |   |         |  |   |        
|Total contractual obligations |  | $                      | 14,494 |      | $ | 14,720 |  | $    | 13,985 |      | $ | 13,102     |  | $     | 13,137 |  | $ | 128,353 |  | $ | 197,791
|                              |  |                        |        |      |   |        |  |      |        |      |   |            |  |       |        |  |   |         |  |   |        

The Company occupies premises under leases, including a land lease, with various lessors that
expire in 2006 through 2069. For the three months ended March 31, 2006 and 2005, rental expense for facilities and the land lease amounted to $2.6 million and $0.8 million, respectively. Included in the March 31, 2006 amount is the $1.8
million lease termination charge the Company incurred (see Note 15).

The Company leases space to tenants in its headquarters facility and
records the associated rental income in other revenue on the consolidated statements of income. For the three months ended March 31, 2006 and 2005, rental income amounted to $2.1 million and $2.0 million, respectively. Future minimum rental
income for the years 2006 through 2010 and thereafter is as follows:



|           |  |                |       
|---------- |  | -------------- | ------
|           |  | (in thousands)
|2006       |  | $              | 6,071 
|2007       |  |                | 7,521 
|2008       |  |                | 5,640 
|2009       |  |                | 4,764 
|2010       |  |                | 4,484 
|Thereafter |  |                | 10,778
|           |  |                |       
|Total      |  | $              | 39,258
|           |  |                |       

In accordance with the DME shareholders agreement, the Company will be 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 March 31, 2006, the Company had contributed a total of $5.0
million.

Financial Guarantees

The Company adopted FASB Interpretation No. 45, Guarantors Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Othersan Interpretation of FASB Statements No. 5,
57, and 107 and Rescission of FASB Interpretation No. 34(FIN No. 45), effective January 1, 2003. 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



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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 March 31,
2006, there were total seat loan balances of $6.8 million and securities pledged against the seat loan balances of $8.0 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 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.

During 2004, 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 during the three months ended March 31, 2006, in any of the above arrangements, in which a liability should be
recognized in accordance with FIN No. 45.

Legal Proceedings

Set forth below is a description of material litigation to which the Company is a party, as of March 31, 2006. 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 action:

New York Mercantile Exchange, Inc. v.
IntercontinentalExchange, Inc.On November 20, 2002, NYMEX Exchange commenced an action in United States District Court for the Southern District of New York against IntercontinentalExchange, Inc. (ICE). The amended complaint
alleges claims for: (a) copyright infringement by ICE arising out of ICEs uses of certain NYMEX Exchange settlement prices; (b) service mark infringement by reason of use by ICE of the service marks NYMEX and NEW YORK MERCANTILE
EXCHANGE; (c) violation of trademark anti-dilution statutes; and (d) interference with contractual relationships. On January 6, 2003, ICE served an Answer and Counterclaims, in which ICE alleges five counterclaims against NYMEX
Exchange as follows: (1) a claim for purported violation of Section 2 of the Sherman Act, 15 U.S.C. § 2, for NYMEX Exchanges allegedly trying to maintain a monopoly in the execution of the North America energy futures and expand
the alleged monopoly into the execution and clearing of North American OTC energy contracts by attempting to deny ICE access to NYMEX Exchange settlement prices; (2) a claim for purported



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violation of Section 1 of the Sherman Act by conspiring with certain of its members to restrain trade by attempting to deny ICE access to NYMEX Exchange
settlement prices; (3) a claim for alleged violation of Section 2 of the Sherman Act by NYMEX Exchange purportedly denying ICE access to NYMEX Exchanges settlement prices which are allegedly an essential facility;
(4) a claim for purported violation of Section 1 of the Sherman Act and Section 3 of the Clayton Act by NYMEX Exchange allegedly tying execution services for North American energy futures and options to clearing services; and
(5) a claim for purported violation of the Lanham Act through false advertising with respect to certain services offered by NYMEX Exchange and services offered by ICE. The counterclaims request damages and trebled damages in amounts not
specified yet by ICE in addition to injunctive and declaratory relief.

On August 11, 2003, the Court issued an opinion
dismissing certain counterclaims and one affirmative defense, with leave to replead. On or about August 28, 2003, NYMEX Exchange was served with ICEs First Amended Counterclaims in which ICE made four counterclaims against NYMEX Exchange
principally alleging violations of U.S. antitrust laws, including claims regarding monopoly leveraging.

By Order and
Opinion dated June 30, 2004, the Court granted NYMEX Exchanges motion and dismissed all of the antitrust counterclaims asserted against NYMEX Exchange.

By Order and Opinion dated September 29, 2005, the Court (1) granted ICEs motion for summary judgment to the extent of
dismissing NYMEX Exchanges federal claims for copyright and trademark infringement and dismissing without prejudice (by declining to exercise supplemental jurisdiction), NYMEX Exchanges state law claims for violation of trademark
anti-dilution statutes and interference with contractual relationships, and (2) denied NYMEX Exchanges cross-motion for partial summary judgment on copyright infringement and tortious interference with contract. NYMEX Exchange has filed
an appeal with the United States Court of Appeals for the Second Circuit. The appeal should be argued in the second quarter of 2006. This case is ongoing.

19. Subsequent Events

London Trading Floor

In March 2006, the Company decided that it would cease its floor trading operations of Europe Exchange and focus entirely on its existing electronic trading platform. The Company anticipates that the trading floor
will close around June 30, 2006. Based on this timeframe, the Company expects to incur various charges during the second quarter of 2006 estimated to be between $2.5 million and $3.5 million. These charges will be the result of a change in
estimate to the useful life of leasehold improvements and equipment, as well as lease termination costs. The net book value of leasehold improvements and equipment that pertain to the trading floor operations will be written off over their shortened
useful life in accordance with SFAS No. 154, Accounting Changes and Error Corrections. The lease termination costs will consist of various operating leases the Company had contracted to support its floor trading operations and will be written
off in accordance with FAS No. 146.

Technology Services Agreement

On April 6, 2006, NYMEX Exchange entered into a definitive technology services agreement (the CME Agreement) with Chicago Mercantile
Exchange Inc. (CME), a wholly-owned subsidiary of Chicago Mercantile Exchange Holdings Inc.

Pursuant to the CME Agreement, CME
will be the exclusive electronic trading service provider for NYMEX Exchanges energy futures and options contracts. Initial trading of NYMEX Exchange energy products on CME Globex®, currently scheduled to begin in the second quarter of 2006, is expected to include
side-by-side trading of NYMEX Exchange full-sized and NYMEX Exchange miNY energy futures contracts for crude oil, natural gas, heating oil and gasoline with NYMEX Exchanges floor-based products during open outcry trading hours as well as



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trading when the NYMEX Exchange trading floor is closed. In the third quarter of 2006, all products trading on the NYMEX ACCESS® electronic trading platform are expected to transition to CME Globex®. Also under the terms of the CME Agreement, CME
Globex® will be the exclusive electronic trading
platform for metals products currently listed on the COMEX Division, with an anticipated launch in the third quarter of 2006.

The CME
Agreement has a ten-year term from the launch date with rolling three-year extensions unless either party elects not to renew the CME Agreement upon written notice prior to the beginning of the applicable renewal term. Pursuant to the CME Agreement,
NYMEX Exchange will pay to CME a minimum annual payment or per trade fees based on average daily volume, whichever is greater.

Annual Meeting of
Stockholders

The Company held its annual meeting of stockholders on May 1, 2006. Votes were cast in person or by proxy for the
election of the new fifteen member board of directors. Due to its open director nomination process, the Company takes no position, and makes no recommendation, regarding the election of directors. The process for nomination of directors allows
shareholders to nominate, subject to qualification, (i) themselves or other shareholders to be candidates for the board of directors, and (ii) non-shareholders to be Public Director candidates for the board of directors. A description of
the Companys director nomination process is contained in the Annual Meeting Proxy for 2006, in the section entitled Director Nomination Process.

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

Overview

Throughout this document NYMEX Holdings, Inc. will be referred to as NYMEX Holdings and,
together with its subsidiaries, as the Company. 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 discussed as the Exchange. When discussing
NYMEX Holdings together with its subsidiaries, reference is being made to the Company.

Since its founding 134 years ago,
the Exchange has evolved into a major provider of financial services to the energy and metals industries. A core component of the business is the revenue derived from the Exchanges trading facilities and from providing clearing and settlement
services through its clearinghouse to a wide range of participants in these industries. A significant amount of revenue is also derived from the sale of market data. Based upon 2005 volume of approximately 215 million contracts transacted
and/or cleared on the Exchange, the Exchange is the largest physical commodity based futures exchange in the world and the third largest futures exchange in the United States. NYMEX Exchange is the largest exchange in the world for the trading of
energy futures and options contracts, including contracts for crude oil, unleaded gasoline, heating oil and natural gas, and is the largest exchange in North America for the trading of platinum group metals contracts. COMEX is the largest
marketplace for gold and silver futures and options contracts, and is the largest exchange in North America for futures and options contracts for copper and aluminum. Participants in the Exchanges markets include a wide variety of customers
involved in the production, consumption and trading of energy and metals products. Market participants use the Exchange for both hedging and speculative purposes. NYMEX ClearPort® Clearing is the mechanism by which individually negotiated off-exchange trades are submitted to the Exchange for
clearing of specified products. The NYMEX ClearPort® Clearing system enables market participants to take advantage of the financial depth and security of the NYMEX Exchange clearinghouse along with access to more than 240 energy futures contracts.

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



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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, 2005 Annual Report on Form 10-K. The
Companys forward-looking statements are based on information available to the Company today, 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; and other unanticipated events and conditions. It is not possible for the Company
to foresee or identify all such factors.

Market Conditions

For the three months ended March 31, 2006, the total volume of futures and options contracts traded and cleared was 67.1 million contracts, an increase of 19.7 million contracts or 41.4% from
47.4 million contracts for the same period last year.

Provided below is a discussion of 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 in the following discussion excludes contracts cleared through NYMEX ClearPort® Clearing. Included in the NYMEX Division volumes are
futures contracts of Europe Limited, the Companys European subsidiary, that are traded on the subsidiaries trading floor in London, England, which opened during the third quarter of 2005. 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. These volumes include futures settlement and options exercise transactions for which transaction fees
are assessed. These volumes also include cash settlement transactions for contracts cleared on NYMEX ClearPort® Clearing for which transaction fees are assessed. Prior to the filing of this quarterly report on Form 10-Q for the period ended March 31, 2006, cash settlement transactions were
listed as part of the NYMEX Division volumes labeled as other. Since the cash settlement transactions are for NYMEX ClearPort® Clearing contracts, the prior period volume information has been adjusted to include such transactions in NYMEX ClearPort® Clearing for comparative purposes. Open interest represents the number of
contracts at March 31, 2006 and 2005 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 by
cash), or close out the position with an offsetting sale or purchase prior to contract expiration. Options open interest represents unexpired, unexercised option contracts.

Energy MarketsNYMEX Division

For the three months ended March 31, 2006, the volume of
futures and options contracts traded and cleared on the NYMEX Division was 42.1 million contracts, an increase of 9.0 million contracts or 27.0% from 33.1 million contracts for the same period last year.



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

NYMEX Division Futures and Options Contracts Traded and Cleared

For the Quarters Ended March 31,



|                              |  |                |  |       
|----------------------------- |  | -------------- |  | ------
|                              |  | 2006           |  | 2005  
|                              |  | (in thousands)
|Light sweet crude oil         |  | 22,525         |  | 17,965
|Henry Hub natural gas         |  | 8,022          |  | 6,954 
|N.Y. heating oil              |  | 3,623          |  | 3,688 
|N.Y. harbor unleaded gasoline |  | 3,786          |  | 3,491 
|Other                         |  | 4,113          |  | 1,030 
|                              |  |                |  |       
|Total                         |  | 42,069         |  | 33,128
|                              |  |                |  |       

NYMEX Division Futures and Options Contracts Open Interest

At March 31,



|                              |  |                |  |      
|----------------------------- |  | -------------- |  | -----
|                              |  | 2006           |  | 2005 
|                              |  | (in thousands)
|Light sweet crude oil         |  | 3,174          |  | 2,335
|Henry Hub natural gas         |  | 1,746          |  | 1,302
|N.Y. heating oil              |  | 216            |  | 254  
|N.Y. harbor unleaded gasoline |  | 198            |  | 284  
|Other                         |  | 341            |  | 101  
|                              |  |                |  |      
|Total                         |  | 5,675          |  | 4,276
|                              |  |                |  |      

Light Sweet Crude Oil

For the three months ended March 31, 2006, total futures and options contract volume was 22.5 million contracts, an increase of 4.5 million contracts or 25.4% from 18.0 million contracts for the
same period last year.

The Company believes that the increase in total futures and options contract volume for the three months ended
March 31, 2006 was due, in part, to the continued uncertainty of global oil supplies. Political events in major oil producing countries in the Middle East and Africa continue to heighten concerns over the reliability of oil exports from such
countries. As a result, increased volatility and price levels, which were significantly higher than the first quarter of 2005, have continued to push both futures and options volumes higher.

Henry Hub Natural Gas

For the three months
ended March 31, 2006, total futures and options contracts volume was 8.0 million contracts, an increase of 1.0 million contracts or 15.4% from 7.0 million contracts for the same period last year.

The Company believes that the increase in total futures and options contract volume for the three months ended March 31, 2006 was due, in part, to a
significant decline in the price of natural gas during the current quarter. The price decline can be directly related to the unusually warm winter weather, as January 2006 was the warmest January on record for the United States according to the
National Weather Service. The significant decline in price resulted in increased trading activity in the natural gas market.



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New York Heating Oil

For the three months ended March 31, 2006, total futures and options contracts volume was 3.6 million contracts, a decrease of 0.1 million contracts or 1.8% from 3.7 million contracts for the same
period last year.

The Company believes that the decrease in total futures and options contract volume for the three months ended
March 31, 2006 was due, in part, to a decrease in options trading volume resulting from a contraction in the price differential between crude oil and heating oil. This was offset, in part, by a slight increase in futures trading volume as
strong global demand and continued concerns surrounding limited refining capacity maintained higher volatility levels in the heating oil market, resulting in increased futures trading activity.

New York Harbor Unleaded Gasoline

For the
three months ended March 31, 2006, total futures and options contracts volume was 3.8 million contracts, an increase of 0.3 million contracts or 8.5% from 3.5 million contracts for the same period last year.

The Company believes that the increase in total futures and options contract volume for the three months ended March 31, 2006 was due, in part, to
volatility caused by the price of gasoline. Gasoline prices continued to rise during the current quarter driven by strong consumer demand and refinery capacity limitations.

Metals MarketCOMEX Division

For the three months ended March 31, 2006, the volume of
futures and options contracts traded and cleared for the COMEX Division was 9.8 million contracts, an increase of 2.5 million contracts or 34.4% from 7.3 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 Futures and Options Contracts Traded and Cleared

For the Quarters Ended March 31,



|                  |  |                |  |      
|----------------- |  | -------------- |  | -----
|                  |  | 2006           |  | 2005 
|                  |  | (in thousands)
|Gold              |  | 6,519          |  | 4,896
|Silver            |  | 2,342          |  | 1,464
|High grade copper |  | 977            |  | 953  
|Aluminum          |  | 6              |  | 13   
|                  |  |                |  |      
|Total             |  | 9,844          |  | 7,326
|                  |  |                |  |      

COMEX Division Futures and Options Contracts Open Interest

At March 31,



|                  |  |                |  |     
|----------------- |  | -------------- |  | ----
|                  |  | 2006           |  | 2005
|                  |  | (in thousands)
|Gold              |  | 608            |  | 623 
|Silver            |  | 245            |  | 178 
|High grade copper |  | 96             |  | 133 
|Aluminum          |  | 1              |  | 7   
|                  |  |                |  |     
|Total             |  | 950            |  | 941 
|                  |  |                |  |     



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Gold

For the three months ended March 31, 2006, total futures and options contract volume was 6.5 million contracts, an increase of 1.6 million contracts or 33.1% from 4.9 million contracts for the same period last year.

The Company believes that the increase in total futures contract volume for the three months ended March 31, 2006 was due, in part,
to the fear of increased inflation as a result of continued escalating energy prices, global geopolitical events and a weakened U.S. currency compared to other international currencies. In addition, an increase in gold storage as collateral for
exchange traded gold funds has reduced the quantity available for commercial and financial use which, in turn, has led to increased trading activity.

Silver

For the three months ended March 31, 2006, total futures and options contract volume was
2.3 million contracts, an increase of 0.8 million contracts or 60.0% from 1.5 million contracts for the same period last year.

The Company believes that the increase in total futures and options contract volume for the three months ended March 31, 2006 was due, in part, to the increase appeal of silver as an alternative investment, which resulted in an
increase in demand and, in turn, a decline in inventories. These factors resulted in increased hedging and speculative demand for silver futures and options.

High Grade Copper

For the three months ended March 31, 2006, total futures and options contract volume was
1.0 million contracts, essentially flat compared to the same period last year.

The Company believes that the slight increase in total
futures and options contract volume for the three months ended March 31, 2006 was due, in part, to declining global warehouse stocks as a result of increased international demand, strong housing starts and supply disruptions in various parts of
the world, which contributed to increased hedging and speculative demand for copper futures.

NYMEX ClearPort® Clearing

For the three months ended March 31, 2006, total futures and options contract clearing volume was 15.2 million contracts, an increase of
8.2 million contracts or over 100% from 7.0 million contracts for the same period last year.



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For the three months ended March 31, 2006, there was significant growth in natural gas clearing
volume through NYMEX ClearPort® Clearing. The
Company believes this growth 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. In addition, significant
growth in the number of different natural gas products offered, as well as additional products for petroleum, electricity and coal on NYMEX ClearPort® Clearing contributed to this increase.

NYMEX ClearPort® Clearing Futures and
Options Contracts

For the Quarters Ended March 31,



|                   |  |                |  |      
|------------------ |  | -------------- |  | -----
|                   |  | 2006           |  | 2005 
|                   |  | (in thousands)
|Natural gas        |  | 14,500         |  | 6,536
|Electricity        |  | 411            |  | 276  
|Petroleum products |  | 250            |  | 173  
|Coal               |  | 11             |  | 3    
|Other              |  | 1              |  |     
|                   |  |                |  |      
|Total              |  | 15,173         |  | 6,988
|                   |  |                |  |      

NYMEX ClearPort® Clearing Futures and Options Contracts Open Interest

At March 31,



|                   |  |                |  |      
|------------------ |  | -------------- |  | -----
|                   |  | 2006           |  | 2005 
|                   |  | (in thousands)
|Natural gas        |  | 6,695          |  | 3,414
|Electricity        |  | 307            |  | 122  
|Petroleum products |  | 204            |  | 105  
|Coal               |  | 4              |  | 1    
|                   |  |                |  |      
|Total              |  | 7,210          |  | 3,642
|                   |  |                |  |      

Results of Operations for the Three Months Ended March 31, 2006 and 2005

Overview

Net income for the three months ended
March 31, 2006 was $33.6 million, an increase of $21.2 million from $12.4 million for the same period last year. This increase was the result of net revenues increasing by $41.5 million, which was partially offset by increases in operating
expenses and income taxes of $2.4 million and $17.9 million, respectively.

The increase in net revenues for the three months ended
March 31, 2006 was due to an increase in clearing and transaction fees from higher trading and clearing volumes, market data fees from the implementation of a new price structure which went into effect on January 1, 2006, as well as
increased investment income. The increase in operating expenses was due primarily to increases in salaries, occupancy and equipment, and general and administrative expenses offset by a decrease in professional services.



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The following table summarizes the components of net income for the three months ended March 31,
2006 and 2005 (in thousands, except for share data):



|                                         |  |                             |         |      |   |       
|---------------------------------------- |  | --------------------------- | ------- | ---- | - | ------
|                                         |  | Three Months EndedMarch 31,
|                                         |  | 2006                        |         | 2005
|Net revenues                             |  | $                           | 114,181 |      | $ | 72,680
|Total expenses                           |  |                             | 52,468  |      |   | 50,106
|                                         |  |                             |         |      |   |       
|Income before provision for income taxes |  |                             | 61,713  |      |   | 22,574
|Provision for income taxes               |  |                             | 28,080  |      |   | 10,152
|                                         |  |                             |         |      |   |       
|Net income                               |  | $                           | 33,633  |      | $ | 12,422
|                                         |  |                             |         |      |   |       
|Basic and diluted earnings per share     |  | $                           | 2.03    |      | $ | 15,223
|                                         |  |                             |         |      |   |       

Revenue

Clearing and Transaction Fees

For the three months ended March 31, 2006, clearing and transaction fees were
$92.4 million, an increase of $34.0 million or 58.2% from $58.4 million for the same period last year. This increase was due to higher floor trading and NYMEX ACCESS® volumes on both the NYMEX Division and COMEX Division, higher NYMEX ClearPort® Clearing volumes and higher NYMEX miNY volumes.

For the three months ended March 31, 2006, average revenue per contract was $1.38, an increase of $0.15 per contract compared to the same period
last year. This increase was due to higher average rates per contract on the NYMEX Division and COMEX Division floor trading resulting from a shift in the customer trading mix, as certain customers are charged higher rates per trade than others. In
addition, an increase in volume on NYMEX ACCESS®,
NYMEX ClearPort® Clearing and NYMEX miNY contributed to the overall rate increase as these
venues charge higher rates per trade.

Market Data Fees

For the three months ended March 31, 2006, market data fees were $15.4 million, an increase of $4.4 million or 39.2% from $11.0 million for the same period last year. This increase was due primarily to the
implementation of a new price structure that went into effect on January 1, 2006. Increases in the number of market data devices being utilized, for which the Company charges fees, also contributed to the increase.

Interest Income and Interest Expense from Securities Lending

In 2005, the Company entered into an agreement with JPMorgan Chase & Co. (JPMorgan) to participate in a securities lending program (see Note 2 to the unaudited consolidated financial statements).
For the three months ended March 31, 2006, interest income from securities lending was $27.2 million, an increase of $20.3 million from $6.9 million for the same period last year. This increase was the result of increased lending which, in
turn, resulted in higher collateral for the Company to invest. Interest expense from securities lending increased proportionately as a result of the increase in the corresponding liability on the collateral.

Other, Net

For the three months ended
March 31, 2006, other revenues were $3.9 million, an increase of $1.2 million or 43.5% from $2.7 million for the same period last year. This increase was due primarily to floor fines levied by the Company and royalty fees, as the Company has
certain license agreements for which it is paid for the use of certain settlement prices.



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Investment Income, Net

For the three months ended March 31, 2006, investment income was $1.5 million, an increase of $1.4 million from $0.1 million for the same period last year. This increase was due primarily to income from municipal
and government obligations, a result of a larger amount of investment assets in the current year period coupled with higher interest rates. This increase was also attributable to a significant amount of unrealized losses in the prior year period
when compared to the current year period.

Operating Expenses

Salaries and Employee Benefits

For the three months ended March 31, 2006, salaries and employee benefits were
$18.3 million, an increase of $3.2 million or 21.3% from $15.1 million for the same period last year. This increase was due primarily to higher employee costs attributable to an increase in the number of employees, as well as higher overall
compensation levels, compared to the same period last year.

Occupancy and Equipment

For the three months ended March 31, 2006, occupancy and equipment expenses were $8.2 million, an increase of $1.2 million or 18.2% from $7.0 million
for the same period last year. This increase was due primarily to lease termination costs the Company incurred in regards to one of the properties it leases (see Note 15 to the unaudited consolidated financial statements). This increase was offset,
in part, by reduced repair and maintenance charges on the Companys headquarters facility during the current year period.

Depreciation and
Amortization

For the three months ended March 31, 2006, depreciation and amortization expenses were $3.3 million, a decrease
of $0.8 million or 19.6% from $4.1 million for the same period last year. The prior year period includes depreciation on assets that were purchased in 2001 and 2002. Capital expenditures for these years were significantly higher compared to more
recent years. A majority of these assets were depreciated over an estimated useful life of two to five years and were fully depreciated in 2005 and, therefore, not depreciated during the current year period.

General and Administrative

For the three
months ended March 31, 2006, general and administrative expenses were $12.4 million, an increase of $3.3 million or 37.0% from $9.1 million for the same period last year. This increase was due primarily to transaction incentives the Company
incurred during the current year period, which it believes are necessary in promoting business with the Company (see Note 11 to the unaudited consolidated financial statements).

Professional Services

For the three months ended March 31, 2006, professional services
expenses were $3.3 million, a decrease of $5.1 million or 60.3% from $8.4 million for the same period last year. This decrease was due primarily to lower consulting and legal fees, as the prior year period reported a significant amount of costs
relating to the Companys international business expansion initiatives.

Telecommunications

For the three months ended March 31, 2006, telecommunications expenses were $1.7 million, essentially flat compared to the same period last year.
Slight increases in data communication expenses needed to support the growth in market data fees were offset by decreases in telephone related costs during the current year period.



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Marketing

For the three months ended March 31, 2006, marketing expenses were $0.9 million, an increase of $0.1 million or 21.6% from $0.8 million for the same period last year. This increase was due primarily to higher
advertising and other marketing expenses attributable to the Companys expansion initiatives.

Other Expenses

For the three months ended March 31, 2006, other expenses were $2.3 million, an increase of $0.1 million or 6.7% from $2.2 million for the same
period last year. This increase was due primarily to the loss the Company incurred in connection with its joint venture agreement (see Note 14 to the unaudited consolidated financial statements).

Interest Expense

For the three months ended
March 31, 2006, interest expense was $1.7 million, down slightly from the same period last year. The slight decrease was due to a lower principal balance on the Companys long-term debt during the current year period.

Asset Impairment and Disposition Losses

The
loss on impairment and disposition of property and equipment for the three months ended March 31, 2006 was $0.2 million. The Company, in the normal course of business, records charges for the impairment and disposal of assets which it
determines to be obsolete.

Provision for Income Taxes

The Companys effective tax rate was 45.5% for the three months ended March 31, 2006, compared to 45.0% for the same period last year. The difference between the effective tax rates was due primarily to a
lower proportion of tax-exempt income as a result of higher pre-tax income in the current year. In addition, the non-deductibility of certain losses and/or expenses the Company has incurred in relation to its international joint venture agreement
contributed to the increase in the effective tax rate.

Financial Condition and Cash Flows

Liquidity and Capital Resources

At
March 31, 2006, the Company had $203.3 million in cash and cash equivalents, securities purchased under agreements to resell and marketable securities. Working capital at March 31, 2006 was $106.4 million.

Cash Flow; Sources and Uses of Cash

The
Companys principal sources of cash are fees collected from clearing members for trading and/or clearing futures and options transactions, fees collected from market data vendors for distribution of the Companys proprietary contract price
information, and rent collected from tenants leasing space in the Companys headquarters building. Principal uses of cash include operating expenses, income taxes, capital expenditures, debt service, dividends and payments made to members and
third parties under certain incentive programs.



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##### Table of Contents

The following table is a summary of significant cash flow categories for the three months ended
March 31, 2006 and 2005:



|                                                     |  |                |         |   |      |   |            |  
|---------------------------------------------------- |  | -------------- | ------- | - | ---- | - | ---------- | -
|                                                     |  | March 31,      |        
|                                                     |  | 2006           |         |   | 2005 |  
|                                                     |  | (in thousands) |        
|Net cash flow provided by (used in):                 |  |                |         |   |      |   |            |  
|Operating activities                                 |  | $              | 106,655 |   |      | $ | 17,877     |  
|Investing activities                                 |  |                | (55,901 | ) |      |   | (1,467,555 | )
|Financing activities                                 |  |                | (68,664 | ) |      |   | 1,451,418  |  
|                                                     |  |                |         |   |      |   |            |  
|Net increase (decrease) in cash and cash equivalents |  | $              | (17,910 | ) |      | $ | 1,740      |  
|                                                     |  |                |         |   |      |   |            |  

Net cash provided by operating activities includes cash inflows related to operating revenues, net
of cash outflows related to operating expenses, income taxes and payments to members and third parties under certain incentive programs.

Net cash provided by operating activities for the three months ended March 31, 2006 was $106.7 million, an increase of $88.8 million compared to the same period last year. This increase was due primarily to an increase in net revenues,
increases in various payable accounts and a decrease in income tax payments during the current year period. Partially offsetting this was a decrease in cash due to an increase in payments made under the Companys incentive programs during the
current year period.

Under its securities lending program with JPMorgan, the Company lends out securities in exchange for cash collateral
which, in turn, is invested on an overnight basis. The cash collateral received is recorded as a liability and presented in financing activities on the Companys consolidated statements of cash flows. The corresponding investment is recorded as
an asset and presented in investing activities on the Companys consolidated statements of cash flows.

Net cash used in investing
activities for the three months ended March 31, 2006, exclusive of securities purchased under the securities lending program, was $84.1 million, an increase of $71.5 million compared to the same period last year. This increase was due primarily
to the investment of higher operating cash flow into marketable securities.

Net cash used in financing activities for the three months
ended March 31, 2006, exclusive of cash received under the securities lending program, was $40.5 million, an increase of $37.0 million compared to the same period last year. This increase was due primarily to cash dividends paid to the
Companys common stockholders totaling $193.6 million offset, in part, by $160 million the Company received, net of costs, in connection with its sale of a 10% equity interest in the Company (see Note 7 to the unaudited consolidated financial
statements). The Company paid cash dividends to its common stockholders totaling $3.5 million in the prior year period. The Company reserves the right to pay discretionary future dividends.

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, emphasizing safety of
principal and total after-tax return. Excess cash on hand is generally invested overnight in securities purchased under agreements to resell and short-term marketable securities. Cash that is not required to meet daily working capital requirements
is invested primarily in high-grade tax-exempt municipal bonds and



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obligations of the U.S. government and its agencies. The Company also invests in equity securities. At March 31, 2006 and December 31, 2005, cash
and investments were as follows:



|                                                |  |                |         |                  |   |        
|----------------------------------------------- |  | -------------- | ------- | ---------------- | - | -------
|                                                |  | March 31,2006  |         | December 31,2005
|                                                |  | (in thousands)
|Cash and cash equivalents                       |  | $              | 17,754  |                  | $ | 35,664 
|Securities purchased under agreements to resell |  |                | 3,720   |                  |   | 6,900  
|Marketable securities                           |  |                | 181,868 |                  |   | 100,993
|                                                |  |                |         |                  |   |        
|                                                |  | $              | 203,342 |                  | $ | 143,557
|                                                |  |                |         |                  |   |        

Included in marketable securities at March 31, 2006 are investments totaling $11.7 million
relating to the COMEX Division Members Recognition and Retention Plan (MRRP) (see Note 12 to the unaudited 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 18 to the unaudited
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, ranging from $100,000 to $2.0 million, per division,
based upon such clearing member firms reported regulatory capital, 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 either
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 consolidated balance sheets, and are generally invested overnight in securities
purchased under agreements to resell. The table in Note 5 to the unaudited consolidated financial statements sets forth margin deposits and Guaranty Fund balances held by the Company on behalf of clearing members at March 31, 2006 and
December 31, 2005.

In accordance with the Companys securities lending program, JPMorgan, as agent, will lend 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 overnight in various
investments on behalf of the Company in accordance with the Companys internal investment guidelines (see Note 2 to the unaudited 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, operating leases, a capital lease and other contracts.



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A summary of the Companys future cash payments associated with its contractual cash obligations
outstanding as of March 31, 2006, 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
|                              |  | 2006                   |        | 2007 |   | 2008   |  | 2009 |        | 2010 |   | Thereafter |  | Total
|                              |  | (in thousands)        
|Contractual Obligations       |  |                        |        |      |   |        |  |      |        |      |   |            |  |       |        |  |   |         |  |   |        
|Long-term debt principal      |  | $                      | 2,817  |      | $ | 2,817  |  | $    | 2,817  |      | $ | 2,817      |  | $     | 2,817  |  | $ | 71,830  |  | $ | 85,915 
|Long-term debt interest       |  |                        | 6,626  |      |   | 6,416  |  |      | 6,205  |      |   | 5,994      |  |       | 5,783  |  |   | 41,786  |  |   | 72,810 
|Operating leasesfacilities   |  |                        | 2,712  |      |   | 3,455  |  |      | 3,431  |      |   | 3,458      |  |       | 3,737  |  |   | 7,734   |  |   | 24,527 
|Operating leasesequipment    |  |                        | 1,334  |      |   | 1,232  |  |      | 732    |      |   | 33         |  |       |       |  |   |        |  |   | 3,331  
|Capital lease                 |  |                        | 205    |      |   |       |  |      |       |      |   |           |  |       |       |  |   |        |  |   | 205    
|Other long-term obligations   |  |                        | 800    |      |   | 800    |  |      | 800    |      |   | 800        |  |       | 800    |  |   | 7,003   |  |   | 11,003 
|                              |  |                        |        |      |   |        |  |      |        |      |   |            |  |       |        |  |   |         |  |   |        
|Total contractual obligations |  | $                      | 14,494 |      | $ | 14,720 |  | $    | 13,985 |      | $ | 13,102     |  | $     | 13,137 |  | $ | 128,353 |  | $ | 197,791
|                              |  |                        |        |      |   |        |  |      |        |      |   |            |  |       |        |  |   |         |  |   |        

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 will be 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. During 2005, the Company made an initial capital contribution of $2.5 million and in
the first quarter of 2006 made a second capital contribution of $2.5 million to the joint venture.

Other Matters

In February 2004, the Commodity Futures Trading Commission 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 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 consolidated financial statements include certain amounts
that are based on managements estimates and judgments, giving due consideration to materiality.



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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) and long-term debt including expected principal and interest cash flows for the years 2006 through 2010 and thereafter:

Principal Amounts by Expected Maturity

At March 31, 2006



|                |  |                 |         |          |   |        |  |                              |         |  |      |  
|--------------- |  | --------------- | ------- | -------- | - | ------ |  | ---------------------------- | ------- |  | ---- | -
|Year            |  | Principal       |         | Interest |   | Total  |  | WeightedAverageInterest Rate |        
|                |  | ( in thousands) |        
|Assets          |  |                 |         |          |   |        |  |                              |         |  |      |  
|Debt Securities |  |                 |         |          |   |        |  |                              |         |  |      |  
|2006            |  | $               | 314     |          | $ | 1,904  |  | $                            | 2,218   |  | 4.76 | %
|2007            |  |                 | 157     |          |   | 2,728  |  |                              | 2,885   |  | 4.77 | %
|2008            |  |                 | 380     |          |   | 2,750  |  |                              | 3,130   |  | 4.77 | %
|2009            |  |                 | 4,979   |          |   | 2,609  |  |                              | 7,588   |  | 4.76 | %
|2010            |  |                 | 6,112   |          |   | 2,312  |  |                              | 8,424   |  | 5.00 | %
|Thereafter      |  |                 | 45,563  |          |   | 12,002 |  |                              | 57,565  |  | 4.97 | %
|                |  |                 |         |          |   |        |  |                              |         |  |      |  
|Total           |  | $               | 57,505  |          | $ | 24,305 |  | $                            | 81,810  |  |      |  
|                |  |                 |         |          |   |        |  |                              |         |  |      |  
|Fair Value      |  | $               | 61,647  |          |   |        |  |                              |         |  |      |  
|                |  |                 |         |          |   |        |  |                              |         |  |      |  
|                |  |                 |         |         
|Liabilities     |  |                 |         |          |   |        |  |                              |         |  |      |  
|Corporate Debt  |  |                 |         |          |   |        |  |                              |         |  |      |  
|2006            |  | $               | 2,817   |          | $ | 6,626  |  | $                            | 9,443   |  | 7.71 | %
|2007            |  |                 | 2,817   |          |   | 6,416  |  |                              | 9,233   |  | 7.72 | %
|2008            |  |                 | 2,817   |          |   | 6,205  |  |                              | 9,022   |  | 7.73 | %
|2009            |  |                 | 2,817   |          |   | 5,994  |  |                              | 8,811   |  | 7.74 | %
|2010            |  |                 | 2,817   |          |   | 5,783  |  |                              | 8,600   |  | 7.75 | %
|Thereafter      |  |                 | 71,830  |          |   | 41,786 |  |                              | 113,616 |  | 7.78 | %
|                |  |                 |         |          |   |        |  |                              |         |  |      |  
|Total           |  | $               | 85,915  |          | $ | 72,810 |  | $                            | 158,725 |  |      |  
|                |  |                 |         |          |   |        |  |                              |         |  |      |  
|Fair Value      |  | $               | 105,941 |          |   |        |  |                              |         |  |      |  
|                |  |                 |         |          |   |        |  |                              |         |  |      |  

Interest Rate Risk

Investment Income

The Companys investment income 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 months
ended March 31, 2006 was $1.5 million compared to $0.1 million for the same period last year. The fair value of the Companys marketable securities, including equity and short-term debt securities was $181.9 million at March 31, 2006.
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 7.76%. The debt contains a redemption premium, the amount of which varies with changes in interest rates. Therefore, the fair market value of the Companys long-term debt is highly sensitive to changes in
interest rates. Although the market value of the debt will fluctuate with interest rates, the Companys interest expense will not vary with changes in market



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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 NYMEX Division members 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 NYMEX Division members or by individual members as it determines. COMEX Division provides its board of directors with similar powers
relating to dues, assessments and fees with respect to COMEX Division members, provided that such dues and assessments (or fee surcharges in lieu thereof) may not be imposed (other than in connection with certain merger-related events) without the
consent of the COMEX Governors Committee and that the ability of COMEX Divisions board of directors to impose such fees are subject to the limitations.

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, the clearing member must own and hold 180,000 shares of common stock of NYMEX Holdings and two Class A memberships in NYMEX Exchange.

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 Class A Membership in NYMEX Exchange would apply towards any outstanding obligations to the Exchange of such member. Recourse to a members Class A Membership in NYMEX Exchange, however, may not be of
material value in the case of large defaults that result in assessments greater than the value of a Class A Membership in NYMEX Exchange, particularly when the value of a Class A Membership in NYMEX Exchange declines markedly in price as a
consequence of the default.

Additionally, the Company intends to enter into a revolving credit agreement during 2006. This agreement would
provide a line of credit which could be drawn upon in the event of a clearing member default. Such an arrangement would provide the Company with same-day funds to settle such clearing member default, while providing enough time for an efficient
distribution from the Guaranty Fund. Proceeds from the sale of Guaranty Fund securities would be used to repay borrowings under the line of credit.



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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 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

Set forth below is a description of material litigation
to which the Company is a party, as of March 31, 2006. 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 action:

New York Mercantile Exchange, Inc. v. IntercontinentalExchange, Inc.On November 20, 2002, NYMEX Exchange commenced an action
in United States District Court for the Southern District of New York against IntercontinentalExchange, Inc. (ICE). The amended complaint alleges claims for: (a) copyright infringement by ICE arising out of ICEs uses of
certain NYMEX Exchange settlement prices; (b) service mark infringement by reason of use by ICE of the service marks NYMEX and NEW YORK MERCANTILE EXCHANGE; (c) violation of trademark anti-dilution statutes; and (d) interference with
contractual relationships. On January 6, 2003, ICE served an Answer and Counterclaims, in which ICE alleges five counterclaims against NYMEX Exchange as follows: (1) a claim for purported violation of Section 2 of the Sherman Act, 15
U.S.C. § 2, for NYMEX Exchanges allegedly trying to maintain a monopoly in the execution of the North America energy futures and expand the alleged monopoly into the execution and clearing of North American OTC energy contracts by
attempting to deny ICE access to NYMEX Exchange settlement prices; (2) a claim for purported violation of Section 1 of the Sherman Act by conspiring with certain of its members to restrain trade by attempting to deny ICE access to NYMEX
Exchange settlement prices; (3) a claim for alleged violation of Section 2 of the Sherman Act by NYMEX Exchange purportedly denying ICE access to NYMEX Exchanges settlement prices which are allegedly an essential
facility; (4) a claim for purported violation of Section 1 of the Sherman Act and Section 3 of the Clayton Act by NYMEX Exchange allegedly tying execution services for North American energy futures and options to clearing
services; and (5) a claim for purported violation of the Lanham Act through false advertising with respect to certain services offered by NYMEX Exchange and services offered by ICE. The counterclaims request damages and trebled damages in
amounts not specified yet by ICE in addition to injunctive and declaratory relief.

On August 11, 2003, the Court
issued an opinion dismissing certain counterclaims and one affirmative defense, with leave to replead. On or about August 28, 2003, NYMEX Exchange was served with ICEs First Amended Counterclaims in which ICE made four counterclaims
against NYMEX Exchange principally alleging violations of U.S. antitrust laws, including claims regarding monopoly leveraging.

By Order and Opinion dated June 30, 2004, the Court granted NYMEX Exchanges motion and dismissed all of the antitrust counterclaims asserted against NYMEX Exchange.

By Order and Opinion dated September 29, 2005, the Court (1) granted ICEs motion for summary judgment to the extent of
dismissing NYMEX Exchanges federal claims for copyright and trademark infringement and dismissing without prejudice (by declining to exercise supplemental jurisdiction), NYMEX Exchanges state law claims for violation of trademark
anti-dilution statutes and interference with contractual relationships, and (2) denied NYMEX Exchanges cross-motion for partial summary judgment on copyright infringement and tortious interference with contract. NYMEX Exchange has filed
an appeal with the United States Court of Appeals for the Second Circuit. The appeal should be argued in the second quarter of 2006. This case is ongoing.

Item 1A.Risk Factors

There have been no material changes to the risk factors
disclosed in Item 1A of Part I in the Companys Annual Report on Form 10-K for the year ended December 31, 2005.



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

The 8,160,000
shares of Preferred Stock that were issued and sold to General Atlantic for $160 million in cash pursuant to the GA Agreement (see Note 7 to the unaudited consolidated financial statements) were not registered under the Securities Act of 1933, as
amended (the Securities Act). The shares were issued in reliance on exemptions from registration under Section 4 (2) of the Securities Act and/or Rule 506 of Regulation D promulgated thereunder, and in reliance on General
Atlantics representations in the GA Agreement that, among other things, each of the General Atlantic purchasers is an accredited investor within the meaning of Rule 501 of Regulation D. Appropriate restrictive legends were affixed
to the certificates representing the shares of the Preferred Stock and will be affixed to the shares of common stock issuable upon conversion of the Preferred Stock.

The GA Agreement, the terms of the Preferred Stock and the amended and restated certificates of incorporation and bylaws for NYMEX Holdings and NYMEX Exchange that were adopted in connection with the closing of this
transaction were all filed by the Company with the SEC as exhibits to Current Reports on Form 8-K and can be obtained on the SEC website at www.sec.gov.

Item 3.Defaults upon Senior Securities

Not applicable

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

The Company held a
joint special meeting of stockholders of NYMEX Holdings and owners of Class A memberships in NYMEX Exchange on March 13, 2006 to vote on matters pertaining to the GA Agreement. The following proposals were all approved at the joint special
meeting as certified by the Companys transfer agent, which acted as Inspector of Election:

Proposal 1  Approval and Adoption of the
Agreement and Plan of Merger



|    |  |         |  |        
|--- |  | ------- |  | -------
|580 |  | 34      |  | 7      
|FOR |  | AGAINST |  | ABSTAIN

Proposal 2  Approval of the New Certificate of Incorporation which amends and restates the existing
certificate of incorporation of NYMEX Holdings



|    |  |         |  |        
|--- |  | ------- |  | -------
|578 |  | 32      |  | 8      
|FOR |  | AGAINST |  | ABSTAIN

Proposal 3  Approval of the New Bylaws which amend and restate the exiting bylaws of NYMEX Holdings



|    |  |         |  |        
|--- |  | ------- |  | -------
|575 |  | 34      |  | 9      
|FOR |  | AGAINST |  | ABSTAIN

Proposal A  Approval of the New Exchange Certificate of Incorporation which amends and restates the
existing certificate of incorporation of NYMEX Exchange



|    |  |         |  |        
|--- |  | ------- |  | -------
|578 |  | 31      |  | 9      
|FOR |  | AGAINST |  | ABSTAIN



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Proposal B  Approval of New Exchange Bylaws which amend and restate the existing bylaws of NYMEX Exchange



|    |  |         |  |        
|--- |  | ------- |  | -------
|577 |  | 34      |  | 9      
|FOR |  | AGAINST |  | ABSTAIN

Item 5.Other Information

Not applicable

Item 6.Exhibits



|     |  |                                                                                                                                      
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------
|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: May 15, 2006By:

/s/    JEROME H.
BAILEYName:

Jerome H. BaileyTitle:

Chief Financial Officer (Principal Financial Officer)Date: May 15, 2006




39