##### 









UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





Form 10-K


FOR ANNUAL AND TRANSITION REPORTS


PURSUANT TO SECTIONS 13 OR 15(d)


OF THE SECURITIES EXCHANGE ACT OF 1934


|  |  |                                                                                             
|- |  | --------------------------------------------------------------------------------------------
|þ |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934    
| 
|  |  | For the fiscal year ended December 31, 2004                                                 
| 
|o |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934

Commission file number 333-106143


GXS CORPORATION


(Exact name of registrant as specified in its charter)


|                                                                   |  |                                         
|------------------------------------------------------------------ |  | ----------------------------------------
|Delaware                                                           |  | 35-2181508                              
|(State or other jurisdiction of
    incorporation or organization) |  | (I.R.S. Employer
    Identification No.)




|                                         |  |           
|---------------------------------------- |  | ----------
|100 Edison Park Drive Gaithersburg, MD   |  | 20878     
|(Address of principal executive offices) |  | (Zip Code)

Registrants Telephone Number, including area code:


(301) 340-4000


Securities registered pursuant to Section 12(b) of the
Act:


None


Securities registered pursuant to Section 12(g) of the
Act:


None


o þ


o


o þ




DOCUMENTS INCORPORATED BY REFERENCE


None










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TABLE OF CONTENTS


|                           |  |                                                     |  |          |    | 
|-------------------------- |  | --------------------------------------------------- |  | -------- | -- | 
|                           |  |                                                     |  | Page No. |   
|                           |  |                                                     |  |          |   
|FORWARD-LOOKING STATEMENTS
|PART I                    
|ITEM 1.                    |  | BUSINESS                                            |  |          | 1  | 
|                           |  | Overview                                            |  |          | 1  | 
|                           |  | Recent Acquisitions                                 |  |          | 1  | 
|                           |  | Our Industry                                        |  |          | 2  | 
|                           |  | Our Business Model                                  |  |          | 3  | 
|                           |  | Our Business Strategy                               |  |          | 4  | 
|                           |  | Our Product Solutions                               |  |          | 4  | 
|                           |  | Transact Solutions                                  |  |          | 5  | 
|                           |  | Monitor Solutions                                   |  |          | 6  | 
|                           |  | Synchronize Solutions                               |  |          | 7  | 
|                           |  | Collaborate Solutions                               |  |          | 8  | 
|                           |  | Advantage Services                                  |  |          | 8  | 
|                           |  | Professional Services                               |  |          | 8  | 
|                           |  | Community Link Services                             |  |          | 9  | 
|                           |  | Business Process Outsourcing                        |  |          | 9  | 
|                           |  | Legacy Solutions                                    |  |          | 9  | 
|                           |  | Customers                                           |  |          | 9  | 
|                           |  | International Operations                            |  |          | 9  | 
|                           |  | Marketing and Sales                                 |  |          | 10 | 
|                           |  | Customer Service                                    |  |          | 10 | 
|                           |  | Competition                                         |  |          | 10 | 
|                           |  | Data Processing Infrastructure                      |  |          | 11 | 
|                           |  | Product Development                                 |  |          | 11 | 
|                           |  | Alliances and Joint Ventures                        |  |          | 12 | 
|                           |  | Intellectual Property                               |  |          | 13 | 
|                           |  | Employees                                           |  |          | 14 | 
|ITEM 2.                    |  | PROPERTIES                                          |  |          | 14 | 
|ITEM 3.                    |  | LEGAL PROCEEDINGS                                   |  |          | 14 | 
|ITEM 4.                    |  | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS |  |          | 14 | 



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|         |  |                                                                                                                 |  |          |     | 
|-------- |  | --------------------------------------------------------------------------------------------------------------- |  | -------- | --- | 
|         |  |                                                                                                                 |  | Page No. |    
|         |  |                                                                                                                 |  |          |    
|        
|PART II 
|ITEM 5.  |  | MARKET FOR REGISTRANTS COMMON EQUITY, RELATED
    STOCKHOLDER MATTERS AND ISSUER PURCHASE OF EQUITY SECURITIES |  |          | 15  | 
|ITEM 6.  |  | SELECTED FINANCIAL DATA                                                                                         |  |          | 15  | 
|ITEM 7.  |  | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
    CONDITION AND RESULTS OF OPERATIONS                       |  |          | 16  | 
|         |  | Overview                                                                                                        |  |          | 16  | 
|         |  | Recent Trends and Cost-Reduction Initiatives                                                                    |  |          | 18  | 
|         |  | Impact of Acquisitions                                                                                          |  |          | 20  | 
|         |  | Critical Accounting Policies                                                                                    |  |          | 20  | 
|         |  | Results of Operations                                                                                           |  |          | 23  | 
|         |  | Liquidity and Capital Resources                                                                                 |  |          | 29  | 
|         |  | Contractual Obligations and Other Commitments                                                                   |  |          | 33  | 
|         |  | Off-Balance Sheet Arrangements                                                                                  |  |          | 33  | 
|         |  | Recent Accounting Pronouncements                                                                                |  |          | 33  | 
|         |  | Factors That Could Affect Future Results                                                                        |  |          | 34  | 
|ITEM 7A. |  | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                                                      |  |          | 46  | 
|         |  | Interest Rate Risk                                                                                              |  |          | 46  | 
|         |  | Foreign Currency Risk                                                                                           |  |          | 46  | 
|         |  | Inflation                                                                                                       |  |          | 46  | 
|ITEM 8.  |  | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                                                     |  |          | 47  | 
|ITEM 9.  |  | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
    AND FINANCIAL DISCLOSURE                        |  |          | 102 | 
|ITEM 9A. |  | CONTROLS AND PROCEDURES                                                                                         |  |          | 102 | 
|ITEM 9B. |  | OTHER INFORMATION                                                                                               |  |          | 102 | 
|        
|PART III
|ITEM 10. |  | DIRECTORS AND EXECUTIVE OFFICERS                                                                                |  |          | 103 | 
|ITEM 11. |  | EXECUTIVE COMPENSATION                                                                                          |  |          | 106 | 
|ITEM 12. |  | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
    MANAGEMENT AND RELATED STOCKHOLDER MATTERS              |  |          | 112 | 
|ITEM 13. |  | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                                                  |  |          | 114 | 
|ITEM 14. |  | PRINCIPAL ACCOUNTING FEES AND SERVICES                                                                          |  |          | 118 | 
|        
|PART IV 
|ITEM 15. |  | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES                                                                      |  |          | 119 | 
|         |  | SIGNATURES                                                                                                      |  |          | 124 | 



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Item 1.     Business


Overview






Recent Acquisitions


G International.






| |   |                                               
| | - | ----------------------------------------------
| |  | completion of definitive documentation;       
|
| |  | receipt of financing; and                     
|
| |  | receipt of third-party consents and approvals.





| |   |                                                                                                 
| | - | ------------------------------------------------------------------------------------------------
| |  | broaden our customer base to include over 75% of the
    Fortune 500 companies;                 
|
| |  | position us to offer a broad range of our existing solutions to
    G Internationals customers;





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| |   |                                                                                                                
| | - | ---------------------------------------------------------------------------------------------------------------
| |  | reduce our costs and the costs to customers of some of our
    solutions; and                                  
|
| |  | strengthen our competitive position in some industries,
    including financial services and consumer products.

HAHT Commerce.


Celarix.




Our Industry










2



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##### 









| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Data Exchange.Data Exchange services provide safe,
    reliable electronic document and transaction delivery between
    trading partners and their application systems. Integration
    service providers are intermediaries that mediate, transform and
    manage various protocols, such as Internet Protocol
    (IP) and document formats (such as EDI ANSI X12,
    EDIFACT or RosettaNet). Ongoing penetration of EDI into small
    and medium businesses is expected to be the main driver of
    growth in the volume of EDI transactions.
|
| | Trading Partner Management.Integration service providers
    help businesses identify, contact, register, and manage their
    business partners around the world. As businesses increasingly
    source and sell products and components globally, the need for
    managing relationships with businesses of all sizes in all
    locations will be increasingly necessary.                                                                                                                                                                        
|
| | Integration Services.Integration services refer to
    functionality that facilitates interoperability between business
    partners, such as data transformation, monitoring, intelligent
    routing, and business process management. With the increasing
    complexity from new protocols, message formats and standards,
    the need for hosted integration services will continue to
    increase.                                                                                                                                           
|
| | Data Synchronization.The sharing of product, service,
    location, price and promotion information is at the core of
    trading partner collaboration. Keeping data aligned internally
    and externally is a significant challenge for diverse supply
    chains. Data synchronization includes infrastructure and
    services that facilitate synchronization among trading
    partners application systems.                                                                                                                                 
|
| | Application Services.Application services include
    document or industry-specific functionality that leverages data
    exchange, trading partner management and integration services to
    provide increased visibility, control and collaboration around
    specific business processes.                                                                                                                                                                                                                                                       



Our Business Model




Hubs.


3



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Spokes.






| |   |                                                                                                                                                                                 
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | install the necessary software on the hubs systems to
    enable data exchange, and connect the hub to our infrastructure;                                                     
|
| |  | roll-out data exchange to the hubs spokes, including
    providing the necessary software for the spokes systems
    and connecting the spokes to our infrastructure; and     
|
| |  | act as a trusted intermediary, providing services such as
    security, authentication and audit tracking, among others, to
    the installed trading community through our VAN.



Our Business Strategy






| |   |                                                        
| | - | -------------------------------------------------------
| |  | expand our market presence;                            
|
| |  | increase our customer penetration;                     
|
| |  | convert our customers to multi-year contracts;         
|
| |  | pursue strategic cost transformation opportunities; and
|
| |  | broaden our suite of innovative solutions.             

Our Product Solutions




4



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sm sm


Transact Solutions




sm sm sm


5



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sm




| |   |                                                                                                                                                                                                                                                                                                                                                                                                         
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | GXS Interchange Services.Our primary global transaction
    management platform within the Trading
    Gridsm.
    Our services provide a high level of security, authentication,
    audit tracking, data storage, and protocol independence.                                                                                                                                                          
|
| |  | GXS Intelligent WebForms.A global, Web-based portal.
    Intelligent WebForms enable suppliers to manually input
    information into a Web browser for translation into an EDI
    document or XML message on the Trading
    Gridsm.
    This product is designed for suppliers that have low transaction
    volumes and minimal internal computer systems, but that have
    access to the Internet.
|
| |  | GXS Network-Based Translation.A fully automated, file
    integration service. Network-Based Translation enables
    medium-sized suppliers to integrate applications inside the
    firewall with the Trading
    Gridsm
    for higher-volume integration needs.                                                                                                                                      



sm




| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | GXS Enterprise System. A high-performance software
    solution that is installed by a customer to enable access to
    business data that resides in its systems. Enterprise System
    extracts the data, translates the data into a standard format
    and enables the secure transport of the data through the Trading
    Gridsm
    or directly to the receiving trading partner. The product keeps
    a list of trading partners, the documents to be used with each
    trading partner and an audit trail of all transaction activity.
    Application Integrator, which is described below, is typically
    licensed with Enterprise System.
|
| |  | GXS Application Integrator.A high-performance data
    transformation solution. Application Integrator enables our
    customers to keep track of the different documents each trading
    partner uses and the rules for converting internal data formats
    into and out of the standard data documents that can be
    transported over the Trading
    Gridsm.                                                                                                                                                                                                                                                                                      
|
| |  | Small-and-Medium Business Enablers.The Trading
    Gridsm
    messaging services also offer a variety of options for small
    businesses to connect to their trading partners. A suite of web
    forms provides pre-configured templates for common business
    processes. Midsize businesses can connect to the Trading
    Gridsm
    using preferred accounting software packages from vendors such
    as Intuit, Peachtree, Epicor, and Sage. Other options for small
    businesses include desktop translators and on-demand
    file-upload/ download capability and EDI-to-Fax capability.                                                   

Monitor Solutions




6



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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Order Lifecycle Visibility. A web-based order, shipment,
    and payment tracking application. Order Lifecycle Visibility
    enables buyers to track responses from their suppliers to
    purchase orders. Suppliers either confirm the ability to meet
    the order or request modifications to the order. Order Lifecycle
    Visibility also enables the supplier to create advance shipping
    notices. These shipping notices are sent to the buyer informing
    them of the contents, carrier, and delivery date of a shipment.
    Finally, suppliers can send electronic invoices then track the
    payment status with the buyer.
|
| |  | Logistics Visibility. A web-based shipment tracking
    application. Logistics Visibility enables merchandising
    personnel to track the whereabouts of shipments in their supply
    chain. Logistics Visibility is particularly useful for US-based
    corporations sourcing goods from the Asia-Pacific region.
    Through Logistics Visibility a user can track shipments across
    multiple modes of transportation  air, marine, rail, and
    ground. The application can track shipments from origin to
    receipt including complex export, customs, warehousing and
    distribution processes.                                



Synchronize Solutions










| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Data Pool Services. A service that allows supply chain
    partners to exchange their product catalog information
    electronically. Data Pool Services are used in the retail
    industry to notify supply chain partners of new products being
    introduced; changes to existing products such as prices or
    dimensions; or to discontinue end-of-life products. Data Pool
    Services work in conjunction with a set of e-commerce standards
    defined by the Retail Industry  the Global Data
    Synchronization Network. These standards have been adopted by
    the grocery, chain drug, do-it-yourself, office, and consumer
    electronics sectors. Older standards are used by the apparel and
    department store sector.
|
| |  | Product Information Manager, or PIM. A software solution
    that enables companies to organize and manage their product
    information. PIM contains a database that can be used to house
    all product data for a company. Additionally, PIM automates the
    process of collecting information for new product introductions.
    PIM can publish information to other systems within a retail
    environment such as the                                                                                                                                                                                                                                                                                                                 

7



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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   | warehouse, point-of-sale, or Web site. We believe PIM is viewed
    as a critical pre-requisite for companies seeking to adopt Radio
    Frequency Identification, or RFID.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| |  | Data Pool Manager. A service that enables a fully
    functioning governments or standards organizations
    data pool to be deployed for a specific region, country or
    purpose. Our Data Pool Manager facilitates the exchange of
    product catalog information between retailers and their
    suppliers. Product information can include descriptions,
    dimensions, packaging configuration, and country of origin. We
    provide services utilizing our Data Pool Manager software to
    third parties, typically industry standards organizations, which
    use our services to provide their own private-label services.
    Our Data Pool Manager is currently in operation or being
    deployed for 17 GS1 standards organizations around the
    globe. Each of these GS1 standards organizations will market and
    sell their own branded Data Pool Services to retailers and
    suppliers in their geographic region.



Collaborate Solutions






| |   |                                                                                                                                      
| | - | -------------------------------------------------------------------------------------------------------------------------------------
| |  | Demand Planning.Developing joint forecast models to
    optimize merchandising, inventory, logistics and manufacturing
    processes.
|
| |  | Product Development.Jointly analyzing customer behavior
    and designing new products to go to market before competition.           
|
| |  | Marketing and Sales.Jointly planning promotional
    activities to drive product sales in selected market segments.                  



Advantage Services




Professional Services




8



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Community Link Services




Business Process Outsourcing




Legacy Solutions




Customers






International Operations




9



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Marketing and Sales








Customer Service






Competition




10



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| |   |                                                                                                                                                                            
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | quality of service, including the reliability and quality
    of the products and services we offer;                                                                       
|
| |  | technical functionality,including delivery of innovative
    solutions and our speed in developing and bringing to market the
    next generation of products and services;
|
| |  | price;and                                                                                                                                                                  
|
| |  | customer service,including our responsiveness,
    availability and flexibility.                                                                                           







Data Processing Infrastructure








Product Development




11



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sm


Alliances and Joint Ventures








| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Strategic Partners. As a key player in the business to business
    technology market, we maintain strategic relationships with the
    most influential software, hardware, consulting and
    implementation companies in the world. Strategic partners are
    selected according to their ability to assist us in delivering
    industry-leading solutions that streamline cross-enterprise
    business processes. We collaborate with the leading technology,
    consulting and system integrators to develop strategic alliances
    that bring increased value to our global customer base.
    Strategic partnerships are formed with companies that bring
    unparalleled depth to solutions across multiple industries and
    multiple technologies.                                                                                                                         
|
| |  | Solution Partners. We form partnerships with leading industry
    solution providers that train their experts to sell and deliver
    powerful, repeatable solutions built around our solution set.
    The Solution Partner program offers referral and reseller
    partnerships for service and software solutions designed to
    increase partner profitability and customer satisfaction.
    Partners receive extensive tools and resources to enhance the
    delivery of high-value solutions to our global customer base.
    The goal of the program is to develop the highest-quality
    distribution channels to serve our global customer base. Our
    Alliance Managers work with Channel Partners to build sales and
    marketing programs. The top partners may have access to
    co-marketing funds to ensure that the alliance delivers
    renewable customer value.
|
| |  | Technology Partners. We partner with experienced software and
    hardware providers to provide best-of-breed solutions for our
    customers. These companies complement and enhance the value
    delivered to customers that use our solution sets. We work with
    leading technology vendors to complement and increase the value
    delivered by our solution sets. We join with some of the
    worlds leading hardware and software technology providers
    to develop business solutions that deliver sustainable customer
    value.                                                                                                                                                                                                                                                                                                                                          
|
| |  | Standards Organizations. We recognize that leadership in
    deploying and managing business process networks (or e-commerce
    solutions) requires leadership in standards organizations. Many
    of these                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

12



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| |  |                                                                                                                                                                   
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | organizations also offer test and certification programs to
    demonstrate that clients experience the fastest time to
    production with predictable results.



Intellectual Property






| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | United States Patent No. 5,627,972 entitled A system
    for selectively converting a plurality of source data structures
    without intermediary structure into a plurality of selected
    target structures. The invention behind this patent
    relates to a data interchange system and, more particularly, to
    a computer application that is adapted to communicate and
    translate data between various computer systems involving
    dissimilar data formats or structures. This patented technology
    is used in our Application Integrator software product.
|
| |  | United States Patent No. 6,671,728, entitled Abstract
    Initiator. The invention behind this patent relates to a
    method for decoupling a transfer protocol from a central file
    transfer system.                                                                                                                                                                                                                                                                                                                                                                        
|
| |  | United States Patent No. 6,678,682, entitled Method,
    System and Software for Enterprise Access Management
    Controls. The invention behind this patent provides for a
    centralized access management service that allows multiple
    applications to define and register a standard access control
    schema.                                                                                                                                                                                                                                                         
|
| |  | United States Patent No. 6,850,900 entitled Full
    Service Secure Commercial Electronic Marketplace. The
    invention behind this patent relates to an online electronic
    marketplace that facilitates transactions between suppliers and
    buyers, transforming supplier data into a generic format and
    allowing suppliers to update their data.                                                                                                                                                                                                                    



13



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##### 





Employees






Item 2.     Properties








Item 3.     Legal and Other
Proceedings




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




14



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##### 



PART II




|        |                                                                                                                
|------- | ---------------------------------------------------------------------------------------------------------------
|Item 5. | Market for Registrants Common Equity, Related
    Stockholder Matters and Issuer Purchase Of Equity Securities



Item 6.     Selected Financial
Data






|                                  |                                                                                    |                           |         |         |        |   |         |         |         |   |         |         |        |      |          |         |        |   |         |         |         |  
|--------------------------------- | ---------------------------------------------------------------------------------- | ------------------------- | ------- | ------- | ------ | - | ------- | ------- | ------- | - | ------- | ------- | ------ | ---- | -------- | ------- | ------ | - | ------- | ------- | ------- | -
|                                  |                                                                                    | Year ended December 31,   |        
|                                  |                                                                                    |                           |        
|                                  |                                                                                    | 2000                      |         |         | 2001   |   |         | 2002    |         |   | 2003    |         |        | 2004 |         
|                                  |                                                                                    |                           |         |         |        |   |         |         |         |   |         |         |        |      |         
|                                  |                                                                                    | (in thousands of dollars) |        
|Operating Data:                   |                                                                                    |                           |         |         |        |   |         |         |         |   |         |         |        |      |          |         |        |   |         |        
|Revenues                          |                                                                                    | $                         | 565,655 |         |        | $ | 464,179 |         |         | $ | 409,454 |         |        | $    | 363,469  |         |        | $ | 328,597 |        
|Costs and operating expenses:     |                                                                                    |                           |         |         |        |   |         |         |         |   |         |         |        |      |          |         |        |   |         |        
|                                  | Cost of revenues                                                                   |                           |         | 341,492 |        |   |         | 291,295 |         |   |         | 244,207 |        |      |          | 207,056 |        |   |         | 198,187 |        
|                                  | Sales and marketing                                                                |                           |         | 122,314 |        |   |         | 113,578 |         |   |         | 67,316  |        |      |          | 65,161  |        |   |         | 63,274  |        
|                                  | General and administrative                                                         |                           |         | 60,537  |        |   |         | 52,524  |         |   |         | 48,291  |        |      |          | 47,272  |        |   |         | 47,403  |        
|                                  | Restructuring and related charges                                                  |                           |         |        |        |   |         | 9,421   |         |   |         | 18,406  |        |      |          | 26,671  |        |   |         | 26,438  |        
|                                  | Asset impairment charges                                                           |                           |         |        |        |   |         | 4,287   |         |   |         | 5,425   |        |      |          | 6,500   |        |   |         | 6,509   |        
|                                  | Corporate charge from General Electric                                             |                           |         | 11,249  |        |   |         | 12,940  |         |   |         | 7,331   |        |      |          |        |        |   |         |        |        
|                                  |                                                                                    |                           |         |         |        |   |         |         |         |   |         |         |        |      |         
|                                  |                                                                                    | Operating income (loss)   |         |         | 30,063 |   |         |         | (19,866 | ) |         |         | 18,478 |      |          |         | 10,809 |   |         |         | (13,214 | )
|Other income (expense):           |                                                                                    |                           |         |         |        |   |         |         |         |   |         |         |        |      |          |         |        |   |         |        
|                                  | Proportionate share of losses in investee companies and
    investment write-downs |                           |         | (18,759 | )      |   |         | (23,417 | )       |   |         | (4,668  | )      |      |          | (679    | )      |   |         | (1,192  | )      
|                                  | Gain (loss) on disposal of assets                                                  |                           |         | 50,745  |        |   |         | 8,576   |         |   |         |        |        |      |          | 700     |        |   |         | (2,901  | )      
|                                  | Gains on sales of investments                                                      |                           |         | 36,612  |        |   |         | 144,638 |         |   |         |        |        |      |          |        |        |   |         |        |        
|                                  | Fees related to the recapitalization                                               |                           |         |        |        |   |         |        |         |   |         | (30,085 | )      |      |          |        |        |   |         |        |        
|                                  | Write-off of deferred financing costs                                              |                           |         |        |        |   |         |        |         |   |         |        |        |      |          | (5,548  | )      |   |         |        |        
|                                  | Interest income                                                                    |                           |         | 10,726  |        |   |         | 6,570   |         |   |         | 1,285   |        |      |          | 750     |        |   |         | 572     |        
|                                  | Interest expense                                                                   |                           |         | (12,007 | )      |   |         | (5,334  | )       |   |         | (14,526 | )      |      |          | (50,967 | )      |   |         | (59,079 | )      
|                                  | Other income (expense), net                                                        |                           |         | 13,232  |        |   |         | 6,705   |         |   |         | (83     | )      |      |          | 1,248   |        |   |         | 1,330   |        
|                                  | Management fees from G International                                               |                           |         |        |        |   |         |        |         |   |         |        |        |      |          |        |        |   |         | 300     |        
|                                  |                                                                                    |                           |         |         |        |   |         |         |         |   |         |         |        |      |         
|Income (loss) before income taxes |                                                                                    |                           | 110,612 |         |        |   | 117,872 |         |         |   | (29,599 | )       |        |      | (43,687  | )       |        |   | (74,184 | )      
|Provision for income taxes        |                                                                                    |                           | 42,793  |         |        |   | 49,278  |         |         |   | 9,858   |         |        |      | 259,590  |         |        |   | 10,696  |        
|                                  |                                                                                    |                           |         |         |        |   |         |         |         |   |         |         |        |      |         
|Net income (loss)                 |                                                                                    | $                         | 67,819  |         |        | $ | 68,594  |         |         | $ | (39,457 | )       |        | $    | (303,277 | )       |        | $ | (84,880 | )      
|                                  |                                                                                    |                           |         |         |        |   |         |         |         |   |         |         |        |      |         

15



---



##### 



|                                       |  |                         |         |  |      |   |         |      |  |   |         |  |  |      |          |   |  |   |          |  
|-------------------------------------- |  | ----------------------- | ------- |  | ---- | - | ------- | ---- |  | - | ------- |  |  | ---- | -------- | - |  | - | -------- | -
|                                       |  | Year ended December 31, |        
|                                       |  |                         |        
|                                       |  | 2000                    |         |  | 2001 |   |         | 2002 |  |   | 2003    |  |  | 2004 |         
|                                       |  |                         |         |  |      |   |         |      |  |   |         |  |  |      |         
|Other Financial Data                   |  |                         |         |  |      |   |         |      |  |   |         |  |  |      |          |   |  |   |          |  
|Depreciation and amortization          |  | $                       | 33,451  |  |      | $ | 41,943  |      |  | $ | 47,768  |  |  | $    | 47,346   |   |  | $ | 51,705   |  
|Capital expenditures                   |  |                         | 83,037  |  |      |   | 73,159  |      |  |   | 37,815  |  |  |      | 29,395   |   |  |   | 27,899   |  
|Balance Sheet Data (at end of period): |  |                         |         |  |      |   |         |      |  |   |         |  |  |      |          |   |  |   |          |  
|Total assets                           |  | $                       | 531,952 |  |      | $ | 327,309 |      |  | $ | 572,677 |  |  | $    | 291,436  |   |  | $ | 255,685  |  
|Total debt                             |  |                         | 6,474   |  |      |   | 43,922  |      |  |   | 409,562 |  |  |      | 405,520  |   |  |   | 406,489  |  
|Stockholders equity (deficit)         |  |                         | 316,103 |  |      |   | 127,494 |      |  |   | 57,996  |  |  |      | (224,735 | ) |  |   | (288,460 | )



|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis of Financial
    Condition and Results of Operations





Overview








| |   |                                                                 
| | - | ----------------------------------------------------------------
| |  | recurring transaction processing and software maintenance fees; 
|
| |  | software licensing; and                                         
|
| |  | providing professional services in connection with our products.



16



---



##### 













|                                       |  |                              |         |  |           |   |        |      |  |   |        |  |  |   |         | 
|-------------------------------------- |  | ---------------------------- | ------- |  | --------- | - | ------ | ---- |  | - | ------ |  |  | - | ------- | 
|                                       |  | Year ended December 31, 2002 |        
|                                       |  |                              |        
|                                       |  | EDI                          |         |  | Other B2B |   |        |     
|                                       |  | Services                     |         |  | Solutions |   |        | CMNS |  |   | Total  | 
|                                       |  |                              |         |  |           |   |        |      |  |   |        | 
|                                       |  | (in thousands of dollars)    |        
|Transaction Processing and Maintenance |  | $                            | 244,245 |  |           | $ | 11,153 |      |  | $ |       |  |  | $ | 255,398 | 
|Software Licensing                     |  |                              | 412     |  |           |   | 11,319 |      |  |   |       |  |  |   | 11,731  | 
|Professional Services                  |  |                              | 11,451  |  |           |   | 7,299  |      |  |   |       |  |  |   | 18,750  | 
|Legacy                                 |  |                              |        |  |           |   | 58,766 |      |  |   | 64,809 |  |  |   | 123,575 | 
|                                       |  |                              |         |  |           |   |        |      |  |   |        | 
|Total                                  |  | $                            | 256,108 |  |           | $ | 88,537 |      |  | $ | 64,809 |  |  | $ | 409,454 | 
|                                       |  |                              |         |  |           |   |        |      |  |   |        | 

17



---



##### 



|                                       |  |                              |         |  |           |   |        |      |  |   |        |  |  |   |         | 
|-------------------------------------- |  | ---------------------------- | ------- |  | --------- | - | ------ | ---- |  | - | ------ |  |  | - | ------- | 
|                                       |  | Year ended December 31, 2003 |        
|                                       |  |                              |        
|                                       |  | EDI                          |         |  | Other B2B |   |        |     
|                                       |  | Services                     |         |  | Solutions |   |        | CMNS |  |   | Total  | 
|                                       |  |                              |         |  |           |   |        |      |  |   |        | 
|                                       |  | (in thousands of dollars)    |        
|Transaction Processing and Maintenance |  | $                            | 232,309 |  |           | $ | 11,258 |      |  | $ |       |  |  | $ | 243,567 | 
|Software Licensing                     |  |                              | 407     |  |           |   | 8,940  |      |  |   |       |  |  |   | 9,347   | 
|Professional Services                  |  |                              | 5,950   |  |           |   | 8,379  |      |  |   |       |  |  |   | 14,329  | 
|Legacy                                 |  |                              |        |  |           |   | 33,626 |      |  |   | 62,600 |  |  |   | 96,226  | 
|                                       |  |                              |         |  |           |   |        |      |  |   |        | 
|Total                                  |  | $                            | 238,666 |  |           | $ | 62,203 |      |  | $ | 62,600 |  |  | $ | 363,469 | 
|                                       |  |                              |         |  |           |   |        |      |  |   |        | 

|                                       |                |                              |         |         |           |   |        |        |  |   |        |        |  |   |         |         | 
|-------------------------------------- | -------------- | ---------------------------- | ------- | ------- | --------- | - | ------ | ------ |  | - | ------ | ------ |  | - | ------- | ------- | 
|                                       |                | Year Ended December 31, 2004 |        
|                                       |                |                              |        
|                                       |                | EDI                          |         |         | Other B2B |   |        |       
|                                       |                | Services                     |         |         | Solutions |   |        | CMNS   |  |   | Total  |       
|                                       |                |                              |         |         |           |   |        |        |  |   |        |       
|                                       |                | (in thousands of dollars)    |        
|Transaction Processing and Maintenance |                | $                            | 216,737 |         |           | $ | 15,080 |        |  | $ |       |        |  | $ | 231,817 |        
|Software Licensing                     |                |                              | 371     |         |           |   | 8,613  |        |  |   |       |        |  |   | 8,984   |        
|Professional Services                  |                |                              | 7,267   |         |           |   | 6,857  |        |  |   |       |        |  |   | 14,124  |        
|Legacy                                 |                |                              |        |         |           |   | 21,363 |        |  |   | 52,309 |        |  |   | 73,672  |        
|                                       |                |                              |         |         |           |   |        |        |  |   |        |       
|                                       | Total revenues |                              | $       | 224,375 |           |   | $      | 51,913 |  |   | $      | 52,309 |  |   | $       | 328,597 | 
|                                       |                |                              |         |         |           |   |        |        |  |   |        |       

Recent Trends and Cost-Reduction Initiatives








18



---



##### 







| |   |                                                                                                                                                                                                          
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | reducing our cost structure through the removal of excess
    capacity in our sales force, our professional services
    organization and our computing and network infrastructure;                      
|
| |  | investing in new technologies to lower our per unit costs;                                                                                                                                               
|
| |  | consolidating facility space;                                                                                                                                                                            
|
| |  | de-emphasizing Legacy Solutions and reducing the number of
    customers to whom such services are provided;                                                                                             
|
| |  | canceling and consolidating various marketing and development
    programs related to products and services that were not
    generating sufficient revenues to support the continued
    investment; and
|
| |  | reducing back-office personnel and moving work to lower cost
    countries.                                                                                                                              









19



---



##### 



Impact of Acquisitions


G International.






| |   |                                               
| | - | ----------------------------------------------
| |  | completion of definitive documentation;       
|
| |  | receipt of financing; and                     
|
| |  | receipt of third-party consents and approvals.





| |   |                                                                                                                
| | - | ---------------------------------------------------------------------------------------------------------------
| |  | broaden our customer base to include over 75% of the Fortune 500
    companies;                                
|
| |  | position us to offer a broad range of our existing solutions to
    G Internationals customers;               
|
| |  | reduce our costs and the cost to customers of some of our
    solutions; and                                   
|
| |  | strengthen our competitive position in some industries,
    including financial services and consumer products.



Other Acquisitions.


Critical Accounting Policies




20



---



##### 





Revenue Recognition.




Valuation of Accounts Receivable.


Capitalization of Software. Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use.




21



---



##### 







Accounting for the Costs of Computer
Software to Be Sold, Leased, or Otherwise Marketed,


Valuation of Long-lived Assets.




| |   |                                                                                                                              
| | - | -----------------------------------------------------------------------------------------------------------------------------
| |  | significant underperformance relative to historical or projected
    future operating results;                               
|
| |  | significant changes in technology or in the manner of our use of
    the assets or the strategy for our overall business; and
|
| |  | significant negative industry or economic trends.                                                                            



Restructuring.


Deferred Tax Assets.


22



---



##### 





Contingencies. Accounting for Contingencies.




| |   |                                                                                                                                                         
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | information is available that indicates it is probable that the
    loss has been incurred, given the likelihood of the uncertain
    future events; and
|
| |  | that the amount of the loss can be reasonably estimated.                                                                                                



Results of Operations




|          |                                        |                           |  |         |         |  |  |      |       |   |   |         |         |   |  |      |       |   |  |         |         |  |  |      |       |  
|--------- | -------------------------------------- | ------------------------- |  | ------- | ------- |  |  | ---- | ----- | - | - | ------- | ------- | - |  | ---- | ----- | - |  | ------- | ------- |  |  | ---- | ----- | -
|          |                                        | Year Ended December 31,   | 
|          |                                        |                           | 
|          |                                        | 2002                      |  |         | 2003    |  |  | 2004 |      
|          |                                        |                           |  |         |         |  |  |      |      
|          |                                        | $                         |  |         | %       |  |  | $    |       |   | % |         |         | $ |  |      | %     |  
|          |                                        |                           |  |         |         |  |  |      |       |   |   |         |         |   |  |      |       |  
|          |                                        | (in thousands of dollars) | 
|Revenues: |                                        |                           |  |         |         |  |  |      |       |   |   |         |         |   |  |      |       |   |  |         |         |  |  |     
|          | Transaction Processing and Maintenance |                           |  | 255,398 |         |  |  | 62.3 | %     |   |   | 243,567 |         |   |  | 67.0 | %     |   |  | 231,817 |         |  |  | 70.6 | %    
|          | Software Licensing                     |                           |  | 11,731  |         |  |  | 2.9  | %     |   |   | 9,347   |         |   |  | 2.6  | %     |   |  | 8,984   |         |  |  | 2.7  | %    
|          | Professional Services                  |                           |  | 18,750  |         |  |  | 4.6  | %     |   |   | 14,329  |         |   |  | 3.9  | %     |   |  | 14,124  |         |  |  | 4.3  | %    
|          | Legacy                                 |                           |  | 123,575 |         |  |  | 30.2 | %     |   |   | 96,226  |         |   |  | 26.5 | %     |   |  | 73,672  |         |  |  | 22.4 | %    
|          |                                        |                           |  |         |         |  |  |      |       |   |   |         |         |   |  |      |       |  
|          |                                        | Total revenues            |  |         | 409,454 |  |  |      | 100.0 | % |   |         | 363,469 |   |  |      | 100.0 | % |  |         | 328,597 |  |  |      | 100.0 | %
|          |                                        |                           |  |         |         |  |  |      |       |   |   |         |         |   |  |      |       |  

23



---



##### 





|                                                |                                    |                        |         |                           |      |   |         |         |  |   |         |         | 
|----------------------------------------------- | ---------------------------------- | ---------------------- | ------- | ------------------------- | ---- | - | ------- | ------- |  | - | ------- | ------- | 
|                                                |                                    | Year Ended December 31 |        
|                                                |                                    |                        |        
|                                                |                                    | 2002                   |         |                           | 2003 |   |         | 2004    | 
|                                                |                                    |                        |         |                           |      |   |         |         | 
|                                                |                                    |                        |         | (in thousands of dollars) |     
|Costs and operating expenses:                   |                                    |                        |         |                           |      |   |         |         |  |   |         |        
|Cost of revenues                                |                                    | $                      | 244,207 |                           |      | $ | 207,056 |         |  | $ | 198,187 |        
|Sales and marketing                             |                                    |                        | 67,316  |                           |      |   | 65,161  |         |  |   | 63,274  |        
|General and administrative                      |                                    |                        | 48,291  |                           |      |   | 47,272  |         |  |   | 47,403  |        
|Restructuring and related charges               |                                    |                        | 18,406  |                           |      |   | 26,671  |         |  |   | 26,438  |        
|Asset impairment charges                        |                                    |                        | 5,425   |                           |      |   | 6,500   |         |  |   | 6,509   |        
|Corporate charges from General Electric Company |                                    |                        | 7,331   |                           |      |   |        |         |  |   |        |        
|                                                |                                    |                        |         |                           |      |   |         |         | 
|                                                | Total costs and operating expenses |                        | $       | 390,976                   |      |   | $       | 352,660 |  |   | $       | 341,811 | 
|                                                |                                    |                        |         |                           |      |   |         |         | 

Year Ended December 31, 2004 Compared to Year Ended
December 31, 2003


Revenues.


Transaction Processing and Maintenance


Software Licensing


Professional Services


Legacy Solutions


24



---



##### 





Cost of revenues.


Sales and marketing.


General and administrative.




Restructuring and related charges.




Asset impairment charges.


Proportionate share of losses in investee companies and
investment write-downs.


25



---



##### 





Write-off of deferred financing costs.


Interest expense.




Other income (expense), net.




Management fee from G International.


Provision for income taxes.


Net income (loss).


26



---



##### 



Year Ended December 31, 2003 Compared to Year Ended
December 31, 2002


Revenues


Transaction Processing and Maintenance


.


Software Licensing


Professional Services


Legacy Solutions


Cost of revenues.


Sales and marketing.


General and administrative.


27



---



##### 





Restructuring and related charges.


Asset impairment charges.


Corporate charges from General Electric.


Proportionate share of losses in investee companies and
investment write-downs.


Write-off of deferred financing costs.


Interest expense.


Provision for income taxes.


Net income (loss).


28



---



##### 



Liquidity and Capital Resources


Sources and Uses of Cash




|                                                     |  |                           |         |   |      |   |         |      |  |   |         |  
|---------------------------------------------------- |  | ------------------------- | ------- | - | ---- | - | ------- | ---- |  | - | ------- | -
|                                                     |  | Year ended December 31,   |        
|                                                     |  |                           |        
|                                                     |  | 2002                      |         |   | 2003 |   |         | 2004 | 
|                                                     |  |                           |         |   |      |   |         |      | 
|                                                     |  | (in thousands of dollars) |        
|Cash flows from operating activities                 |  | $                         | 9,168   |   |      | $ | 38,762  |      |  | $ | 8,036   |  
|Cash flows from investing activities                 |  |                           | (43,815 | ) |      |   | (28,795 | )    |  |   | (37,623 | )
|Cash flows from financing activities                 |  |                           | 56,534  |   |      |   | (4,933  | )    |  |   | 6,048   |  
|Effect of exchange rate changes on cash              |  |                           | 813     |   |      |   | 4,363   |      |  |   | 1,297   |  
|                                                     |  |                           |         |   |      |   |         |      | 
|Net increase (decrease) in cash and cash equivalents |  | $                         | 22,700  |   |      | $ | 9,397   |      |  | $ | (22,242 | )
|                                                     |  |                           |         |   |      |   |         |      | 
|Cash and cash equivalents, end of year               |  | $                         | 37,333  |   |      | $ | 46,730  |      |  | $ | 24,488  |  
|                                                     |  |                           |         |   |      |   |         |      | 

2004 Compared to 2003








2003 Compared to 2002






29



---



##### 







Liquidity












30



---



##### 











31



---



##### 











32



---



##### 



Contractual Obligations and Other Commitments




|                                   |  |                        |         |           |        |   |        |       |  |     |        |  |           |         |         |  |  |   |        | 
|---------------------------------- |  | ---------------------- | ------- | --------- | ------ | - | ------ | ----- |  | --- | ------ |  | --------- | ------- | ------- |  |  | - | ------ | 
|                                   |  | Payments due by period |        
|                                   |  |                        |        
|                                   |  |                        |         | Less than |        |   | 1-3    |       |  | 3-5 |        |  | More than |        
|                                   |  | Total                  |         |           | 1 year |   |        | years |  |     | years  |  |           | 5 years |        
|                                   |  |                        |         |           |        |   |        |       |  |     |        |  |           |         |        
|Contractual Obligations:           |  |                        |         |           |        |   |        |       |  |     |        |  |           |         |         |  |  |   |        | 
|Long-term debt                     |  | $                      | 410,000 |           |        | $ |       |       |  | $   | 70,000 |  |           | $       | 340,000 |  |  | $ |       | 
|Operating leases                   |  |                        | 89,896  |           |        |   | 15,340 |       |  |     | 22,887 |  |           |         | 16,430  |  |  |   | 35,239 | 
|Other commitments                  |  |                        | 1,399   |           |        |   | 1,097  |       |  |     | 302    |  |           |         |        |  |  |   |       | 
|                                   |  |                        |         |           |        |   |        |       |  |     |        |  |           |         |        
|Total contractual cash obligations |  | $                      | 501,295 |           |        | $ | 16,437 |       |  | $   | 93,189 |  |           | $       | 356,430 |  |  | $ | 35,239 | 
|                                   |  |                        |         |           |        |   |        |       |  |     |        |  |           |         |        



Off-Balance Sheet Arrangements




Recent Accounting Pronouncements


Share-Based Payment,


33



---



##### 



Factors That Could Affect Future Results


We depend on General Electric and its affiliates as
customers.




Because much of our operations are conducted, and most of
our assets are held, by our subsidiaries, we will depend on our
subsidiaries for cash and to service our debt.




We engage in significant transactions with our
affiliates.






34



---



##### 





Francisco Partners indirectly controls approximately 90%
of our capital stock, and there may be situations in which the
interests of Francisco Partners and the interests of holders of
our outstanding debt will not be aligned.






| |   |                                                                                                                                                                                           
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | elect all of our directors and, as a result, control matters
    requiring board approval;                                                                                                
|
| |  | control matters submitted to a stockholder vote, including
    mergers, acquisitions and consolidations with third parties and
    the sale of all or substantially all of our assets; and
|
| |  | otherwise control or influence our business direction and
    policies.                                                                                                                   



A significant portion of our services is delivered using a
proprietary operating system and loss or disruption of this
operating system could adversely affect our ability to service
customers.




Our inability to adapt to rapid technological change could
impair our ability to remain competitive.






35



---



##### 



Short product life cycles make it difficult to recover the
cost of development and force us to continually qualify new
products with our customers.




We may experience product failures or other problems with
existing or new products, all of which could adversely impact
our business.




Our operations are dependent on our ability to protect our
data centers against damage.






Security breaches could harm our business.




36



---



##### 





Risks associated with the Internet, changing standards,
alternate technologies and competition may adversely impact our
business.




A failure to attract or retain qualified personnel or
highly skilled employees could adversely affect our
business.




We rely on intellectual property and proprietary rights to
maintain our competitive position and, therefore, our failure to
protect adequately our intellectual property and proprietary
rights could adversely affect our business.






37



---



##### 





We may make investments in entities that we do not
control.








| |   |                                                                                                                    
| | - | -------------------------------------------------------------------------------------------------------------------
| |  | difficulties inherent in assessing the value, strengths and
    weaknesses of investment opportunities;            
|
| |  | difficulties in integrating and managing newly acquired
    operations and improving their operating efficiency; or
|
| |  | potential disruption of our ongoing business and diversion of
    our resources and management time.               



We may selectively seek acquisitions in the future, which
could expose us to significant business risks.






| |   |                                                                                          
| | - | -----------------------------------------------------------------------------------------
| |  | we may pay more than the acquired company is worth;                                      
|
| |  | we may be entering markets in which we have little or no direct
    prior experience; and
|
| |  | our ongoing business may be disrupted and resources and
    management time diverted.    



38



---



##### 





Delays and inaccuracies in our billing and information
systems may have an adverse effect on our operations.




The markets in which we compete are highly
competitive.




We may require additional capital in the future, and
additional funds may not be available on terms acceptable to
us.




We are exposed to general economic conditions, which could
have a material adverse impact on our business, operating
results and financial condition.




39



---



##### 







We may experience fluctuations in our quarterly operating
results because of factors over which we have little or no
control.






| |   |                                                                                                                                 
| | - | --------------------------------------------------------------------------------------------------------------------------------
| |  | changes in the level of revenues derived from our products and
    services;                                                    
|
| |  | the timing of new product and service announcements by us or our
    competitors;                                               
|
| |  | changes in pricing policies by us or our competitors;                                                                           
|
| |  | market acceptance of new and enhanced versions of our products
    and services or the products and services of our competitors;
|
| |  | the size and timing of significant orders;                                                                                      
|
| |  | changes in operating expenses;                                                                                                  
|
| |  | changes in our strategy;                                                                                                        
|
| |  | the introduction of alternative technologies;                                                                                   
|
| |  | the effect of acquisitions we might make; and                                                                                   
|
| |  | industry and general economic factors.                                                                                          



We operate internationally, which exposes us to risks that
are difficult to quantify.




40



---



##### 







| |   |                                                                                               
| | - | ----------------------------------------------------------------------------------------------
| |  | unexpected changes in regulatory requirements and tariffs;                                    
|
| |  | longer payment cycles;                                                                        
|
| |  | increased difficulties in collecting accounts receivable;                                     
|
| |  | potentially adverse tax consequences from operating in multiple
    jurisdictions;            
|
| |  | currency exchange rate fluctuations;                                                          
|
| |  | difficulties in repatriating earnings;                                                        
|
| |  | political and economic instability;                                                           
|
| |  | global and regional economic slowdowns;                                                       
|
| |  | power supply stoppages and shutdowns;                                                         
|
| |  | difficulties in staffing and managing foreign operations and
    other labor problems;        
|
| |  | seasonal reductions in business activity in the summer months in
    Europe and other regions;
|
| |  | the credit risk of local customers and distributors; and                                      
|
| |  | potential difficulties in protecting intellectual property.                                   

Increased United States or foreign government regulation
of our industry could restrict our business operations, and
compliance with this regulation may be costly.




Our earnings will be adversely affected once we change our
accounting policies with respect to the expensing of stock
options.


Share-Based Payment,


Filing reports with the Securities and Exchange Commission
may strain our resources and distract management.




41



---



##### 





Factors Relating to Our Indebtedness


The significant amount of debt that we have could
adversely affect our financial health and prevent us from
fulfilling our obligations under our credit facility, our senior
secured floating rate notes and our senior subordinated
notes.








| |   |                                                                                                                                                                                                                                                          
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | make it more difficult for us to satisfy our obligations with
    respect to our indebtedness;                                                                                                                                                           
|
| |  | increase our vulnerability to general adverse economic and
    industry conditions;                                                                                                                                                                      
|
| |  | require us to dedicate a substantial portion of our cash flow
    from operations to servicing debt, reducing the availability of
    our cash flow to fund working capital, capital expenditures,
    acquisitions and other general corporate purposes;
|
| |  | limit our flexibility in planning for, or reacting to, changes
    in our business and industry; and                                                                                                                                                     
|
| |  | limit our ability to borrow additional funds.                                                                                                                                                                                                            

We may incur more debt, which could exacerbate the risks
described above.




Restrictions contained in the agreements governing our
outstanding debt could limit our operating activities.






| |   |                                                                                                                                                       
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | incur or guarantee additional indebtedness, or maintain secured
    indebtedness in excess of certain limits related to our EDI
    services revenues;
|
| |  | pay dividends or distributions on, or redeem or repurchase,
    capital stock;                                                                        
|
| |  | make investments;                                                                                                                                     
|
| |  | issue or sell capital stock of restricted subsidiaries;                                                                                               
|
| |  | engage in transactions with affiliates;                                                                                                               
|
| |  | grant or assume liens; and                                                                                                                            
|
| |  | consolidate, merge or transfer all or substantially all of our
    assets.                                                                            



42



---



##### 





Our failure to comply with the covenants contained in the
agreements governing our debt, including as a result of events
beyond our control, could result in an event of default which
could materially and adversely affect our operating results and
our financial condition.




We may not be able to generate sufficient cash flow to
meet our debt service obligations.




Risks Relating to the Proposed G International
Acquisition


We may be unable to integrate the operations of Global
eXchange Services and G International successfully and may
not achieve the cost savings and increased revenues anticipated
for the combined company.






43



---



##### 





Our acquisition of G International is subject to a
number of conditions which can affect consummation of the
acquisition.






| |   |                                               
| | - | ----------------------------------------------
| |  | completion of definitive documentation;       
|
| |  | receipt of financing; and                     
|
| |  | receipt of third-party consents and approvals.



We will incur significant combination-related and
restructuring costs in connection with the proposed
G International acquisition.






We may lose employees due to uncertainties associated with
the proposed G International acquisition.




Special Note Regarding Forward-Looking Statements


Forward Looking Statements  Our forward looking
statements are subject to a variety of factors that could cause
actual results to differ materially from current beliefs.




44



---



##### 









| |   |                                                                                                                                                                        
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the potential for continued or increased armed conflicts in the
    Middle East;                                                                                       
|
| |  | rapid technological developments and changes and our ability to
    introduce competitive new products and services on a timely,
    cost-effective basis;             
|
| |  | our ability to attract and retain talent in key technological
    areas;                                                                                               
|
| |  | the continued availability of financing in the amounts, at the
    times and on the terms required to support our future operations
    and our levels of indebtedness;
|
| |  | our ability to implement effectively our growth strategy;                                                                                                              
|
| |  | future investments;                                                                                                                                                    
|
| |  | growth rates and general domestic and international economic
    conditions, including currency exchange rate fluctuations;                                            
|
| |  | our mix of products and services;                                                                                                                                      
|
| |  | customer demand for our products and services;                                                                                                                         
|
| |  | our ability to market our products and services effectively;                                                                                                           
|
| |  | the length of life cycles for the products and services we offer;                                                                                                      
|
| |  | increasing price and product and services competition by U.S.
    and foreign competitors, including new entrants;                                                     
|
| |  | our ability to protect our intellectual property rights;                                                                                                               
|
| |  | our ability to protect against security breaches and to protect
    our data centers from damage;                                                                      
|
| |  | our ability to negotiate acquisitions and dispositions and to
    integrate acquired companies successfully;                                                           
|
| |  | changes in United States and foreign governmental regulations;
    and                                                                                                 
|
| |  | the outcome of future litigation.                                                                                                                                      



45



---



##### 



Item 7a.     Quantitative and
Qualitative Disclosures Regarding Market Risk




Interest Rate Risk.


Foreign Currency Risk.


|                               |  |                           |     |    |       |  |          |        |  |  |       |       |  |          |     |  |  |  |      | 
|------------------------------ |  | ------------------------- | --- | -- | ----- |  | -------- | ------ |  |  | ----- | ----- |  | -------- | --- |  |  |  | ---- | 
|                               |  | Foreign Currency Exposure |     |    |      
|                               |  | at December 31, 2004      |     |    |      
|                               |  |                           |     |    |      
|                               |  |                           |     | UK |       |  | Canadian |        |  |  |       | Total | 
|                               |  | Euro                      |     |    | Pound |  |          | Dollar |  |  | Other |       |  | Exposure |    
|                               |  |                           |     |    |       |  |          |        |  |  |       |       |  |          |    
|Revenues (twelve months ended) |  |                           | 37% |    |       |  | 37%      |        |  |  | 9%    |       |  |          | 17% |  |  |  | 100% | 
|Expenses (twelve months ended) |  |                           | 47% |    |       |  | 24%      |        |  |  | 5%    |       |  |          | 24% |  |  |  | 100% | 
|Working Capital                |  |                           | 47% |    |       |  | 26%      |        |  |  | 8%    |       |  |          | 19% |  |  |  | 100% | 



Inflation.


46



---



##### 



Item 8.     Financial Statements and
Supplementary Data




47



---



##### 



Report of Independent Registered Public Accounting Firm














| |                 
| | ----------------
| | /s/     KPMG LLP





48



---



##### 



GXS CORPORATION AND SUBSIDIARIES


Consolidated Balance Sheets


December 31, 2003 and 2004


|                                                                      |                                                                                 |                           |                                      |                                                                             |        |          |         |          |        |          |         | 
|--------------------------------------------------------------------- | ------------------------------------------------------------------------------- | ------------------------- | ------------------------------------ | --------------------------------------------------------------------------- | ------ | -------- | ------- | -------- | ------ | -------- | ------- | 
|                                                                      |                                                                                 | 2003                      |                                      |                                                                             | 2004   |         
|                                                                      |                                                                                 |                           |                                      |                                                                             |        |         
|                                                                      |                                                                                 | (In thousands of dollars, |                                     
|                                                                      |                                                                                 | except per share amounts) |                                     
|ASSETS                                                               
|Current assets:                                                       |                                                                                 |                           |                                      |                                                                             |        |          |         |         
|                                                                      | Cash and cash equivalents                                                       |                           | $                                    | 46,730                                                                      |        |          | $       | 24,488   |       
|                                                                      | Receivables:                                                                    |                           |                                      |                                                                             |        |          |         |          |       
|                                                                      |                                                                                 | Trade                     |                                      |                                                                             | 53,069 |          |         |          | 51,036 |         
|                                                                      |                                                                                 | Other                     |                                      |                                                                             | 4,178  |          |         |          | 6,897  |         
|                                                                      |                                                                                 | General Electric Company  |                                      |                                                                             | 5,081  |          |         |          | 948    |         
|                                                                      | Deferred income taxes                                                           |                           |                                      | 1,729                                                                       |        |          |         | 3,263    |       
|                                                                      | Prepaid expenses and other assets                                               |                           |                                      | 8,660                                                                       |        |          |         | 11,678   |       
|                                                                      |                                                                                 |                           |                                      |                                                                             |        |         
|                                                                      |                                                                                 |                           | Total current assets                 |                                                                             |        | 119,447  |         |          |        | 98,310   |        
|Investment                                                            |                                                                                 |                           | 2,929                                |                                                                             |        |          | 1,901   |         
|Property and equipment, net                                           |                                                                                 |                           | 132,701                              |                                                                             |        |          | 101,656 |         
|Goodwill                                                              |                                                                                 |                           | 11,929                               |                                                                             |        |          | 25,760  |         
|Deferred income taxes                                                 |                                                                                 |                           | 3,034                                |                                                                             |        |          | 775     |         
|Deferred financing costs, net                                         |                                                                                 |                           | 15,886                               |                                                                             |        |          | 12,279  |         
|Other acquired intangible assets, net                                 |                                                                                 |                           | 1,168                                |                                                                             |        |          | 11,452  |         
|Other assets                                                          |                                                                                 |                           | 4,342                                |                                                                             |        |          | 3,552   |         
|                                                                      |                                                                                 |                           |                                      |                                                                             |        |         
|                                                                      |                                                                                 |                           | Total Assets                         |                                                                             | $      | 291,436  |         |          | $      | 255,685  |        
|                                                                      |                                                                                 |                           |                                      |                                                                             |        |         
|                                                                     
|LIABILITIES, MINORITY INTEREST AND STOCKHOLDERS EQUITY
    (DEFICIT)
|Current liabilities:                                                  |                                                                                 |                           |                                      |                                                                             |        |          |         |         
|                                                                      | Trade payables                                                                  |                           | $                                    | 12,139                                                                      |        |          | $       | 15,487   |       
|                                                                      | Deferred income                                                                 |                           |                                      | 10,368                                                                      |        |          |         | 19,879   |       
|                                                                      | Accrued expenses and other liabilities                                          |                           |                                      | 63,405                                                                      |        |          |         | 71,835   |       
|                                                                      |                                                                                 |                           |                                      |                                                                             |        |         
|                                                                      |                                                                                 |                           | Total current liabilities            |                                                                             |        | 85,912   |         |          |        | 107,201  |        
|Long-term debt                                                        |                                                                                 |                           | 405,520                              |                                                                             |        |          | 406,489 |         
|Deferred income taxes                                                 |                                                                                 |                           |                                     |                                                                             |        |          | 2,909   |         
|Other liabilities                                                     |                                                                                 |                           | 23,929                               |                                                                             |        |          | 27,199  |         
|                                                                      |                                                                                 |                           |                                      |                                                                             |        |         
|                                                                      |                                                                                 |                           | Total liabilities                    |                                                                             |        | 515,361  |         |          |        | 543,798  |        
|                                                                      |                                                                                 |                           |                                      |                                                                             |        |         
|Minority interest                                                     |                                                                                 |                           | 810                                  |                                                                             |        |          | 347     |         
|                                                                      |                                                                                 |                           |                                      |                                                                             |        |         
|Commitments and contingencies                                         |                                                                                 |                           |                                      |                                                                             |        |          |         |         
|Stockholders equity (deficit):                                       |                                                                                 |                           |                                      |                                                                             |        |          |         |         
|                                                                      | Common stock $1.00 par value, authorized, issued and
    outstanding 100 shares |                           |                                      |                                                                            |        |          |         |         |       
|                                                                      | Additional paid-in capital                                                      |                           |                                      | 258,386                                                                     |        |          |         | 279,634  |       
|                                                                      | Accumulated deficit                                                             |                           |                                      | (477,616                                                                    | )      |          |         | (562,496 | )     
|                                                                      | Accumulated other comprehensive loss                                            |                           |                                      | (5,505                                                                      | )      |          |         | (5,598   | )     
|                                                                      |                                                                                 |                           |                                      |                                                                             |        |         
|                                                                      |                                                                                 |                           | Total stockholders equity (deficit) |                                                                             |        | (224,735 | )       |          |        | (288,460 | )      
|                                                                      |                                                                                 |                           |                                      |                                                                             |        |         
|                                                                      |                                                                                 |                           |                                      | Total Liabilities, Minority Interest and Stockholders
    Equity (Deficit) |        | $        | 291,436 |          |        | $        | 255,685 | 
|                                                                      |                                                                                 |                           |                                      |                                                                             |        |         



49



---



##### 



GXS CORPORATION AND SUBSIDIARIES


Consolidated Statements of Operations


Years ended December 31, 2002, 2003 and 2004


|                             |                                                                                   |                          |                         |         |         |        |         |         |          |        |         |         |         |         |  
|---------------------------- | --------------------------------------------------------------------------------- | ------------------------ | ----------------------- | ------- | ------- | ------ | ------- | ------- | -------- | ------ | ------- | ------- | ------- | ------- | -
|                             |                                                                                   | 2002                     |                         |         | 2003    |        |         | 2004    |         
|                             |                                                                                   |                          |                         |         |         |        |         |         |         
|                             |                                                                                   | (In thousands)           |                        
|Revenues                     |                                                                                   | $                        | 409,454                 |         |         | $      | 363,469 |         |          | $      | 328,597 |        
|Costs and operating expenses |                                                                                   |                          |                         |         |         |        |         |         |          |        |         |        
|                             | Cost of revenues                                                                  |                          |                         | 244,207 |         |        |         | 207,056 |          |        |         | 198,187 |        
|                             | Sales and marketing                                                               |                          |                         | 67,316  |         |        |         | 65,161  |          |        |         | 63,274  |        
|                             | General and administrative                                                        |                          |                         | 48,291  |         |        |         | 47,272  |          |        |         | 47,403  |        
|                             | Restructuring and related charges                                                 |                          |                         | 18,406  |         |        |         | 26,671  |          |        |         | 26,438  |        
|                             | Asset impairment charges                                                          |                          |                         | 5,425   |         |        |         | 6,500   |          |        |         | 6,509   |        
|                             | Corporate charges from General Electric Company                                   |                          |                         | 7,331   |         |        |         |        |          |        |         |        |        
|                             |                                                                                   |                          |                         |         |         |        |         |         |         
|                             |                                                                                   |                          | Operating income (loss) |         |         | 18,478 |         |         |          | 10,809 |         |         |         | (13,214 | )
|Other income (expense):      |                                                                                   |                          |                         |         |         |        |         |         |          |        |         |        
|                             | Proportional share of losses in investee companies and
    investment write-downs |                          |                         | (4,668  | )       |        |         | (679    | )        |        |         | (1,192  | )      
|                             | Gain (loss) on disposal of assets                                                 |                          |                         |        |         |        |         | 700     |          |        |         | (2,901  | )      
|                             | Professional fees related to recapitalization                                     |                          |                         | (30,085 | )       |        |         |        |          |        |         |        |        
|                             | Write-off of deferred financing costs                                             |                          |                         |        |         |        |         | (5,548  | )        |        |         |        |        
|                             | Interest income                                                                   |                          |                         | 1,285   |         |        |         | 750     |          |        |         | 572     |        
|                             | Interest expense                                                                  |                          |                         | (14,526 | )       |        |         | (50,967 | )        |        |         | (59,079 | )      
|                             | Other income (expense), net                                                       |                          |                         | (83     | )       |        |         | 1,248   |          |        |         | 1,330   |        
|                             | Management fee from G International                                               |                          |                         |        |         |        |         |        |          |        |         | 300     |        
|                             |                                                                                   |                          |                         |         |         |        |         |         |         
|                             |                                                                                   | Loss before income taxes |                         |         | (29,599 | )      |         |         | (43,687  | )      |         |         | (74,184 | )      
|Provision for income taxes   |                                                                                   |                          | 9,858                   |         |         |        | 259,590 |         |          |        | 10,696  |        
|                             |                                                                                   |                          |                         |         |         |        |         |         |         
|                             |                                                                                   | Net loss                 |                         | $       | (39,457 | )      |         | $       | (303,277 | )      |         | $       | (84,880 | )      
|                             |                                                                                   |                          |                         |         |         |        |         |         |         



50



---



##### 



GXS CORPORATION AND SUBSIDIARIES


Consolidated Statements of Comprehensive Loss


Years ended December 31, 2002, 2003 and 2004


|                                                 |                    |                |         |         |      |   |          |          |   |   |         |         |  
|------------------------------------------------ | ------------------ | -------------- | ------- | ------- | ---- | - | -------- | -------- | - | - | ------- | ------- | -
|                                                 |                    | 2002           |         |         | 2003 |   |          | 2004     |  
|                                                 |                    |                |         |         |      |   |          |          |  
|                                                 |                    | (In thousands) |        
|Net loss                                         |                    | $              | (39,457 | )       |      | $ | (303,277 | )        |   | $ | (84,880 | )      
|Unrealized gain on available-for-sale securities |                    |                |        |         |      |   |         |          |   |   | 193     |        
|Foreign currency translation adjustments         |                    |                | 9,671   |         |      |   | 4,509    |          |   |   | (286    | )      
|                                                 |                    |                |         |         |      |   |          |          |  
|                                                 | Comprehensive loss |                | $       | (29,786 | )    |   | $        | (298,768 | ) |   | $       | (84,973 | )
|                                                 |                    |                |         |         |      |   |          |          |  



51



---



##### 



GXS CORPORATION AND SUBSIDIARIES


Consolidated Statements of Stockholders Equity
(Deficit)


Years ended December 31, 2002, 2003 and 2004


|                                                                                                 |  |                |   |            |  |   |           |             |  |               |          |   |                |       |         |               |  |   |          |   |  |   |          |  
|------------------------------------------------------------------------------------------------ |  | -------------- | - | ---------- |  | - | --------- | ----------- |  | ------------- | -------- | - | -------------- | ----- | ------- | ------------- |  | - | -------- | - |  | - | -------- | -
|                                                                                                 |  |                |   |            |  |   |           |             |  | Due from      |          |   |               
|                                                                                                 |  |                |   |            |  |   |           | Accumulated |  |               | General  |   |                | Total |        
|                                                                                                 |  |                |   | Additional |  |   | Retained  |             |  | Other         |          |   | Electric       |       |         | Stockholders | 
|                                                                                                 |  | Common         |   | Paid-In    |  |   | Earnings/ |             |  | Comprehensive |          |   | Company        |       |         | Equity        | 
|                                                                                                 |  | Stock          |   | Capital    |  |   | (Deficit) |             |  | Loss          |          |   | and Affiliates |       |         | (Deficit)     | 
|                                                                                                 |  |                |   |            |  |   |           |             |  |               |          |   |                |       |         |               | 
|                                                                                                 |  | (In thousands) |  
|Balance at December 31, 2001                                                                     |  | $              |  |            |  | $ |          |             |  | $             | 674,333  |   |                | $     | (19,685 | )             |  | $ | (527,154 | ) |  | $ | 127,494  |  
|Net loss                                                                                         |  |                |  |            |  |   |          |             |  |               | (39,457  | ) |                |       |        |               |  |   |         |   |  |   | (39,457  | )
|Foreign currency translation adjustments                                                         |  |                |  |            |  |   |          |             |  |               |         |   |                |       | 9,671   |               |  |   |         |   |  |   | 9,671    |  
|Distribution to General Electric in connection with
    Recapitalization                         |  |                |  |            |  |   |          |             |  |               | (350,000 | ) |                |       |        |               |  |   |         |   |  |   | (350,000 | )
|Net deferred tax assets resulting from U.S. tax election in
    connection with Recapitalization |  |                |  |            |  |   | 239,309   |             |  |               |         |   |                |       |        |               |  |   |         |   |  |   | 239,309  |  
|Net transfers from General Electric Company and affiliates                                       |  |                |  |            |  |   |          |             |  |               |         |   |                |       |        |               |  |   | 67,939   |   |  |   | 67,939   |  
|Elimination of amounts due from General Electric Company and
    affiliates                      |  |                |  |            |  |   |          |             |  |               | (459,215 | ) |                |       |        |               |  |   | 459,215  |   |  |   |         |  
|Contributions from General Electric Company                                                      |  |                |  |            |  |   | 3,040     |             |  |               |         |   |                |       |        |               |  |   |         |   |  |   | 3,040    |  
|                                                                                                 |  |                |   |            |  |   |           |             |  |               |          |   |                |       |         |               |  |  
|Balance at December 31, 2002                                                                     |  |                |  |            |  |   | 242,349   |             |  |               | (174,339 | ) |                |       | (10,014 | )             |  |   |         |   |  |   | 57,996   |  
|Net loss                                                                                         |  |                |  |            |  |   |          |             |  |               | (303,277 | ) |                |       |        |               |  |   |         |   |  |   | (303,277 | )
|Foreign currency translation adjustments                                                         |  |                |  |            |  |   |          |             |  |               |         |   |                |       | 4,509   |               |  |   |         |   |  |   | 4,509    |  
|Capital contribution by GXS Holdings in connection with
    acquisition of Celarix, Inc.         |  |                |  |            |  |   | 600       |             |  |               |         |   |                |       |        |               |  |   |         |   |  |   | 600      |  
|Contributions from General Electric Company                                                      |  |                |  |            |  |   | 15,437    |             |  |               |         |   |                |       |        |               |  |   |         |   |  |   | 15,437   |  
|                                                                                                 |  |                |   |            |  |   |           |             |  |               |          |   |                |       |         |               |  |  
|Balance at December 31, 2003                                                                     |  |                |  |            |  |   | 258,386   |             |  |               | (477,616 | ) |                |       | (5,505  | )             |  |   |         |   |  |   | (224,735 | )
|Net loss                                                                                         |  |                |  |            |  |   |          |             |  |               | (84,880  | ) |                |       |        |               |  |   |         |   |  |   | (84,880  | )
|Foreign currency translation adjustments                                                         |  |                |  |            |  |   |          |             |  |               |         |   |                |       | (286    | )             |  |   |         |   |  |   | (286     | )
|Unrealized gain on available-for-sale securities                                                 |  |                |  |            |  |   |          |             |  |               |         |   |                |       | 193     |               |  |   |         |   |  |   | 193      |  
|Capital contribution by GXS Holdings in connection with
    acquisition of HAHT Commerce, Inc.   |  |                |  |            |  |   | 15,000    |             |  |               |         |   |                |       |        |               |  |   |         |   |  |   | 15,000   |  
|Other                                                                                            |  |                |  |            |  |   | 71        |             |  |               |         |   |                |       |        |               |  |   |         |   |  |   | 71       |  
|Contributions from General Electric Company                                                      |  |                |  |            |  |   | 6,177     |             |  |               |         |   |                |       |        |               |  |   |         |   |  |   | 6,177    |  
|                                                                                                 |  |                |   |            |  |   |           |             |  |               |          |   |                |       |         |               |  |  
|Balance at December 31, 2004                                                                     |  | $              |  |            |  | $ | 279,634   |             |  | $             | (562,496 | ) |                | $     | (5,598  | )             |  | $ |         |   |  | $ | (288,460 | )
|                                                                                                 |  |                |   |            |  |   |           |             |  |               |          |   |                |       |         |               |  |  



52



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##### 



GXS CORPORATION AND SUBSIDIARIES


Consolidated Statements of Cash Flows


Years ended December 31, 2002, 2003 and 2004


|                                             |                                                                                      |                                                                                         |                                                         |          |        |         |        |          |         |         |        |         |        |         |  
|-------------------------------------------- | ------------------------------------------------------------------------------------ | --------------------------------------------------------------------------------------- | ------------------------------------------------------- | -------- | ------ | ------- | ------ | -------- | ------- | ------- | ------ | ------- | ------ | ------- | -
|                                             |                                                                                      | 2002                                                                                    |                                                         |          | 2003   |         |        | 2004     |        
|                                             |                                                                                      |                                                                                         |                                                         |          |        |         |        |          |        
|                                             |                                                                                      | (In thousands)                                                                          |                                                        
|Cash flows from operating activities:        |                                                                                      |                                                                                         |                                                         |          |        |         |        |          |         |         |        |        
|                                             | Net loss                                                                             |                                                                                         | $                                                       | (39,457  | )      |         | $      | (303,277 | )       |         | $      | (84,880 | )     
|                                             | Adjustments to reconcile net loss to net cash provided by
    operating activities:  |                                                                                         |                                                         |          |        |         |        |          |         |         |        |         |       
|                                             |                                                                                      | Depreciation and amortization                                                           |                                                         |          | 47,768 |         |        |          | 47,346  |         |        |         | 51,705 |        
|                                             |                                                                                      | Asset impairment charges                                                                |                                                         |          | 5,425  |         |        |          | 6,500   |         |        |         | 6,509  |        
|                                             |                                                                                      | (Gain) loss on disposal of asset                                                        |                                                         |          |       |         |        |          | (700    | )       |        |         | 2,901  |        
|                                             |                                                                                      | Deferred income taxes                                                                   |                                                         |          | (1,788 | )       |        |          | 263,422 |         |        |         | 3,364  |        
|                                             |                                                                                      | Write-off of deferred financing costs                                                   |                                                         |          |       |         |        |          | 5,548   |         |        |         |       |        
|                                             |                                                                                      | Amortization of deferred financing costs and debt discount                              |                                                         |          | 2,326  |         |        |          | 3,558   |         |        |         | 4,705  |        
|                                             |                                                                                      | Minority interest                                                                       |                                                         |          | (545   | )       |        |          | (507    | )       |        |         | (463   | )      
|                                             |                                                                                      | Proportionate share of losses in investee companies and
    investment write-downs      |                                                         |          | 4,668  |         |        |          | 679     |         |        |         | 1,192  |        
|                                             |                                                                                      | Changes in operating assets and liabilities, net of effect of
    business acquisition: |                                                         |          |        |         |        |          |         |         |        |         |        |        
|                                             |                                                                                      |                                                                                         | Decrease in receivables                                 |          |        | 11,947  |        |          |         | 11,249  |        |         |        | 5,587   |  
|                                             |                                                                                      |                                                                                         | (Increase) decrease in prepaid expense and other assets |          |        | (1,236  | )      |          |         | 760     |        |         |        | (2,001  | )
|                                             |                                                                                      |                                                                                         | Increase (decrease) in accounts payable                 |          |        | (10,356 | )      |          |         | (9,868  | )      |         |        | 3,140   |  
|                                             |                                                                                      |                                                                                         | Increase (decrease) in deferred income                  |          |        | (2,176  | )      |          |         | (1,608  | )      |         |        | 7,180   |  
|                                             |                                                                                      |                                                                                         | Increase (decrease) in other liabilities                |          |        | (2,804  | )      |          |         | 16,084  |        |         |        | 11,197  |  
|                                             |                                                                                      |                                                                                         | Other                                                   |          |        | (4,604  | )      |          |         | (424    | )      |         |        | (2,100  | )
|                                             |                                                                                      |                                                                                         |                                                         |          |        |         |        |          |        
|                                             |                                                                                      |                                                                                         | Net cash provided by operating activities               |          |        | 9,168   |        |          |         | 38,762  |        |         |        | 8,036   |  
|                                             |                                                                                      |                                                                                         |                                                         |          |        |         |        |          |        
|Cash flows from investing activities:        |                                                                                      |                                                                                         |                                                         |          |        |         |        |          |         |         |        |        
|                                             | Purchases of property and equipment                                                  |                                                                                         |                                                         | (37,815  | )      |         |        | (29,395  | )       |         |        | (27,899 | )     
|                                             | Acquisition of minority interests in affiliates                                      |                                                                                         |                                                         | (6,000   | )      |         |        |         |         |         |        |        |       
|                                             | Proceeds from sales of assets                                                        |                                                                                         |                                                         |         |        |         |        | 600      |         |         |        |        |       
|                                             | Purchase of HAHT, net of cash acquired of $4,526                                     |                                                                                         |                                                         |         |        |         |        |         |         |         |        | (9,724  | )     
|                                             |                                                                                      |                                                                                         |                                                         |          |        |         |        |          |        
|                                             |                                                                                      |                                                                                         | Net cash used in investing activities                   |          |        | (43,815 | )      |          |         | (28,795 | )      |         |        | (37,623 | )
|                                             |                                                                                      |                                                                                         |                                                         |          |        |         |        |          |        
|Cash flows from financing activities:        |                                                                                      |                                                                                         |                                                         |          |        |         |        |          |         |         |        |        
|                                             | Distribution to General Electric Company in connection with the
    Recapitalization |                                                                                         |                                                         | (350,000 | )      |         |        |         |         |         |        |        |       
|                                             | Net transfers from General Electric Company and affiliates                           |                                                                                         |                                                         | 67,939   |        |         |        |         |         |         |        |        |       
|                                             | Repayment of short-term borrowings, net                                              |                                                                                         |                                                         | (43,922  | )      |         |        |         |         |         |        |        |       
|                                             | Payment of capital lease obligation                                                  |                                                                                         |                                                         | (18,464  | )      |         |        |         |         |         |        |        |       
|                                             | Repayment of long-term debt                                                          |                                                                                         |                                                         | (438     | )      |         |        | (174,562 | )       |         |        |        |       
|                                             | Proceeds from long-term debt issuances                                               |                                                                                         |                                                         | 410,000  |        |         |        | 169,750  |         |         |        |        |       
|                                             | Borrowings under revolving credit facility                                           |                                                                                         |                                                         |         |        |         |        |         |         |         |        | 14,100  |       
|                                             | Repayments under revolving credit facility                                           |                                                                                         |                                                         |         |        |         |        |         |         |         |        | (14,100 | )     
|                                             | Capital contributions from General Electric Company                                  |                                                                                         |                                                         | 3,040    |        |         |        | 12,456   |         |         |        | 6,177   |       
|                                             | Payment of financing costs                                                           |                                                                                         |                                                         | (11,621  | )      |         |        | (12,577  | )       |         |        | (129    | )     
|                                             |                                                                                      |                                                                                         |                                                         |          |        |         |        |          |        
|                                             |                                                                                      |                                                                                         | Net cash provided by (used in) financing activities     |          |        | 56,534  |        |          |         | (4,933  | )      |         |        | 6,048   |  
|                                             |                                                                                      |                                                                                         |                                                         |          |        |         |        |          |        
|Effect of exchange rate changes on cash      |                                                                                      |                                                                                         | 813                                                     |          |        |         | 4,363  |          |         |         | 1,297  |        
|                                             |                                                                                      |                                                                                         |                                                         |          |        |         |        |          |        
|                                             |                                                                                      |                                                                                         | Increase (decrease) in cash and cash equivalents        |          |        | 22,700  |        |          |         | 9,397   |        |         |        | (22,242 | )
|Cash and cash equivalents, beginning of year |                                                                                      |                                                                                         | 14,633                                                  |          |        |         | 37,333 |          |         |         | 46,730 |        
|                                             |                                                                                      |                                                                                         |                                                         |          |        |         |        |          |        
|Cash and cash equivalents, end of year       |                                                                                      | $                                                                                       | 37,333                                                  |          |        | $       | 46,730 |          |         | $       | 24,488 |        
|                                             |                                                                                      |                                                                                         |                                                         |          |        |         |        |          |        









53



---



##### 



GXS CORPORATION AND SUBSIDIARIES


Notes to Consolidated Financial Statements


December 31, 2002, 2003 and 2004


(In thousands, except per share amounts)




|    |                                   
|--- | ----------------------------------
|(1) | Business and Basis of Presentation











54



---



##### 



GXS CORPORATION AND SUBSIDIARIES


Notes to Consolidated Financial
Statements  (Continued)












|    |                                           
|--- | ------------------------------------------
|(2) | Summary of Significant Accounting Policies



|    |              
|--- | -------------
|(a) | Consolidation





|    |                 
|--- | ----------------
|(b) | Foreign Currency



55



---



##### 



GXS CORPORATION AND SUBSIDIARIES


Notes to Consolidated Financial
Statements  (Continued)






|    |                          
|--- | -------------------------
|(c) | Cash and Cash Equivalents





|    |                    
|--- | -------------------
|(d) | Revenue Recognition





| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Transaction Processing  The Company earns
    recurring transaction processing fees from facilitating the
    exchange of business documents among its customers
    computer systems and those of their trading partners. Such
    revenues are based on a per transaction fee and are recognized
    in the period in which the related transactions are processed.
    Revenue on contracts with monthly or quarterly minimum
    transaction levels is recognized based on the greater of actual
    transactions or the specified contract minimum amounts.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| | Software Licensing  The Company earns revenue
    from the licensing of software applications that facilitate and
    automate the exchange of information among disparate business
    systems and applications. Such revenues are recognized when the
    license agreement is signed, the license fee is fixed and
    determinable, delivery has occurred, and collection is
    considered probable. Revenue from licensing software that
    requires significant customization and modification or where
    services are otherwise considered essential to the functionality
    of the software are recognized using the percentage of
    completion method, based on the costs incurred in relation to
    the total estimated costs of the contract. Revenue from hosted
    software applications are recognized ratably over the hosting
    period unless the customer has the contractual right to take
    possession of the software without significant penalty and it is
    feasible for the customer to use the software with its own
    hardware or contract with another party unrelated to the Company
    to host the software.
|
| | Professional Services and Software
    Maintenance  Professional services are generally
    conducted under time and material contracts and revenue is
    recognized as the related services are provided. Software
    maintenance revenue is deferred and recognized on a
    straight-line basis over the life of the related contract, which
    is typically one year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

Software Revenue Recognition Revenue
Arrangements with Multiple Deliverables




|    |                       
|--- | ----------------------
|(e) | Property and Equipment

Accounting for the Costs of


56



---



##### 



GXS CORPORATION AND SUBSIDIARIES


Notes to Consolidated Financial
Statements  (Continued)


Computer Software Developed or Obtained for Internal Use.




|    |                      
|--- | ---------------------
|(f) | Marketable Securities







|    |         
|--- | --------
|(g) | Goodwill

Goodwill and Other Intangible Assets




|    |                           
|--- | --------------------------
|(h) | Capitalized Software Costs

Accounting for the Costs of
Computer Software to be Sold, Leased, or Otherwise Marketed




|    |                                                                            
|--- | ---------------------------------------------------------------------------
|(i) | Impairment of Long-Lived Assets and Long-Lived Assets to
    be Disposed Of





|    |                   
|--- | ------------------
|(j) | Comprehensive Loss





|                                                  |  |      |        |   |      |   |        |  
|------------------------------------------------- |  | ---- | ------ | - | ---- | - | ------ | -
|                                                  |  | 2003 |        |   | 2004 |  
|                                                  |  |      |        |   |      |  
|Foreign currency translation adjustment           |  | $    | (5,505 | ) |      | $ | (5,791 | )
|Unrealized gains of available-for-sale securities |  |      |       |   |      |   | 193    |  
|                                                  |  |      |        |   |      |  
|                                                  |  | $    | (5,505 | ) |      | $ | (5,598 | )
|                                                  |  |      |        |   |      |  

57



---



##### 



GXS CORPORATION AND SUBSIDIARIES


Notes to Consolidated Financial
Statements  (Continued)




|    |                         
|--- | ------------------------
|(k) | Research and Development





|    |                  
|--- | -----------------
|(l) | Employee Benefits





| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Retirement Benefits  The principal pension
    plan benefits were provided under the GE Pension Plan, a defined
    benefit plan, which provided benefits to certain
    U.S. employees of the Company based on the greater of a
    formula recognizing career earnings or a formula recognizing
    length of service and final average earnings. Eligible employees
    also participated in the GE Savings and Security Program, a
    defined contribution plan. Under this plan, eligible employees
    could invest a portion of their earnings (generally up to 7%
    with GE matching 50% of the first 7% contributed, and an
    additional 10% without any employer matching) in various program
    funds.
|
| | Health and Life Benefits  The principal health
    and life plan benefits were covered under the GE Life,
    Disability and Medical plan, a health and welfare plan, which
    provided benefits to pay medical expenses, flexible spending
    accounts for otherwise unreimbursed expenses, short-term
    disability benefits and life and accidental death and
    dismemberment insurance benefits. Retirees shared in the cost of
    healthcare benefits.                                                                                                                                                                                                                                                      







|    |             
|--- | ------------
|(m) | Income Taxes







|    |                       
|--- | ----------------------
|(n) | Derivative Instruments

Accounting for Derivative Instruments and Hedging
Activities


58



---



##### 



GXS CORPORATION AND SUBSIDIARIES


Notes to Consolidated Financial
Statements  (Continued)






|    |                  
|--- | -----------------
|(o) | Stock Option Plan

Accounting for Stock Issued
to Employees Accounting for Stock-Based
Compensation




|    |                                    
|--- | -----------------------------------
|(p) | Fair Value of Financial Instruments





|    |                 
|--- | ----------------
|(q) | Use of Estimates





|    |                  
|--- | -----------------
|(r) | Reclassifications





|    |                                      
|--- | -------------------------------------
|(s) | Recently Adopted Accounting Standards

Share-Based Payment


59



---



##### 



GXS CORPORATION AND SUBSIDIARIES


Notes to Consolidated Financial
Statements  (Continued)






|    |                         
|--- | ------------------------
|(3) | Revenues and Receivables













|    |                                 
|--- | --------------------------------
|(4) | Other Related Party Transactions





60



---



##### 



GXS CORPORATION AND SUBSIDIARIES


Notes to Consolidated Financial
Statements  (Continued)








|    |            
|--- | -----------
|(5) | Investments



|                          |       |      |       |       |      |   |       |       | 
|------------------------- | ----- | ---- | ----- | ----- | ---- | - | ----- | ----- | 
|                          |       | 2003 |       |       | 2004 |  
|                          |       |      |       |       |      |  
|Equity method investments |       | $    | 608   |       |      | $ | 341   |      
|Marketable securities     |       |      |      |       |      |   | 1,560 |      
|Cost method investments   |       |      | 2,321 |       |      |   |      |      
|                          |       |      |       |       |      |  
|                          | Total |      | $     | 2,929 |      |   | $     | 1,901 | 
|                          |       |      |       |       |      |  







|    |                       
|--- | ----------------------
|(6) | Property and Equipment



|                                               |       |      |         |         |      |   |         |         | 
|---------------------------------------------- | ----- | ---- | ------- | ------- | ---- | - | ------- | ------- | 
|                                               |       | 2003 |         |         | 2004 |  
|                                               |       |      |         |         |      |  
|Computer equipment and furniture               |       | $    | 253,941 |         |      | $ | 235,905 |        
|Computer software                              |       |      | 167,392 |         |      |   | 176,341 |        
|Leasehold improvements                         |       |      | 16,641  |         |      |   | 15,523  |        
|                                               |       |      |         |         |      |  
|                                               |       |      | 437,974 |         |      |   | 427,769 |        
|Less accumulated depreciation and amortization |       |      | 305,273 |         |      |   | 326,113 |        
|                                               |       |      |         |         |      |  
|                                               | Total |      | $       | 132,701 |      |   | $       | 101,656 | 
|                                               |       |      |         |         |      |  

61



---



##### 



GXS CORPORATION AND SUBSIDIARIES


Notes to Consolidated Financial
Statements  (Continued)








|    |         
|--- | --------
|(7) | Goodwill



|                                |  |      |        |  |      |   |        |      |  |   |        | 
|------------------------------- |  | ---- | ------ |  | ---- | - | ------ | ---- |  | - | ------ | 
|                                |  | 2002 |        |  | 2003 |   |        | 2004 | 
|                                |  |      |        |  |      |   |        |      | 
|Beginning of the year           |  | $    | 11,096 |  |      | $ | 11,481 |      |  | $ | 11,929 | 
|Additions  HAHT Commerce, Inc. |  |      |       |  |      |   |       |      |  |   | 13,292 | 
|Foreign currency translation    |  |      | 385    |  |      |   | 448    |      |  |   | 539    | 
|                                |  |      |        |  |      |   |        |      | 
|End of the year                 |  | $    | 11,481 |  |      | $ | 11,929 |      |  | $ | 25,760 | 
|                                |  |      |        |  |      |   |        |      | 





|    |               
|--- | --------------
|(8) | Long-Term Debt



|                                                                                                |  |      |         |  |      |   |         | 
|----------------------------------------------------------------------------------------------- |  | ---- | ------- |  | ---- | - | ------- | 
|                                                                                                |  | 2003 |         |  | 2004 |  
|                                                                                                |  |      |         |  |      |  
|Term loan facility                                                                              |  | $    | 70,000  |  |      | $ | 70,000  | 
|Senior secured floating rate notes, net of debt discount of
    $4,480 and $3,511, respectively |  |      | 100,520 |  |      |   | 101,489 | 
|Senior subordinated reset notes                                                                 |  |      | 235,000 |  |      |   | 235,000 | 
|                                                                                                |  |      |         |  |      |  
|Long-term debt                                                                                  |  | $    | 405,520 |  |      | $ | 406,489 | 
|                                                                                                |  |      |         |  |      |  





| |                 
| | ----------------
| | Credit Facility:





62



---



##### 



GXS CORPORATION AND SUBSIDIARIES


Notes to Consolidated Financial
Statements  (Continued)














63



---



##### 



GXS CORPORATION AND SUBSIDIARIES


Notes to Consolidated Financial
Statements  (Continued)




| |                                    
| | -----------------------------------
| | Senior Secured Floating Rate Notes:









| |                                 
| | --------------------------------
| | Senior Subordinated Reset Notes:







64



---



##### 



GXS CORPORATION AND SUBSIDIARIES


Notes to Consolidated Financial
Statements  (Continued)














|    |                                       
|--- | --------------------------------------
|(9) | Accrued Expenses and Other Liabilities



|                                              |       |      |        |        |      |   |        |        | 
|--------------------------------------------- | ----- | ---- | ------ | ------ | ---- | - | ------ | ------ | 
|                                              |       | 2003 |        |        | 2004 |  
|                                              |       |      |        |        |      |  
|Employee compensation and benefits            |       | $    | 16,037 |        |      | $ | 13,685 |       
|Other taxes accrued                           |       |      | 3,183  |        |      |   | 2,770  |       
|Accrued interest and deferred financing costs |       |      | 14,123 |        |      |   | 21,073 |       
|Other                                         |       |      | 30,062 |        |      |   | 34,307 |       
|                                              |       |      |        |        |      |  
|                                              | Total |      | $      | 63,405 |      |   | $      | 71,835 | 
|                                              |       |      |        |        |      |  



|     |             
|---- | ------------
|(10) | Income Taxes



65



---



##### 



GXS CORPORATION AND SUBSIDIARIES


Notes to Consolidated Financial
Statements  (Continued)




|                       |         |      |        |        |      |   |         |         |   |   |        |       | 
|---------------------- | ------- | ---- | ------ | ------ | ---- | - | ------- | ------- | - | - | ------ | ----- | 
|                       |         | 2002 |        |        | 2003 |   |         | 2004    |  
|                       |         |      |        |        |      |   |         |         |  
|Current income taxes:  |         |      |        |        |      |   |         |         |   |   |        |      
|                       | Federal |      | $      | 4,711  |      |   | $       | (6,463  | ) |   | $      |      | 
|                       | State   |      |        | (390   | )    |   |         | (988    | ) |   |        | 400   | 
|                       | Foreign |      |        | 7,325  |      |   |         | 3,619   |   |   |        | 7,061 | 
|                       |         |      |        |        |      |   |         |         |  
|                       |         |      | 11,646 |        |      |   | (3,832  | )       |   |   | 7,461  |      
|                       |         |      |        |        |      |   |         |         |  
|Deferred income taxes: |         |      |        |        |      |   |         |         |   |   |        |      
|                       | Federal |      |        | (6,019 | )    |   |         | 205,872 |   |   |        |      | 
|                       | State   |      |        | 112    |      |   |         | 45,561  |   |   |        |      | 
|                       | Foreign |      |        | 4,119  |      |   |         | 11,989  |   |   |        | 3,235 | 
|                       |         |      |        |        |      |   |         |         |  
|                       |         |      | (1,788 | )      |      |   | 263,422 |         |   |   | 3,235  |      
|                       |         |      |        |        |      |   |         |         |  
|Total                  |         | $    | 9,858  |        |      | $ | 259,590 |         |   | $ | 10,696 |      
|                       |         |      |        |        |      |   |         |         |  



|                                                 |                                              |                                                                         |       |      |      |    |       |       |       |    |       |      |      |   
|------------------------------------------------ | -------------------------------------------- | ----------------------------------------------------------------------- | ----- | ---- | ---- | -- | ----- | ----- | ----- | -- | ----- | ---- | ---- | --
|                                                 |                                              | 2002                                                                    |       |      | 2003 |    |       | 2004  |      
|                                                 |                                              |                                                                         |       |      |      |    |       |       |      
|Statutory U.S. Federal income tax (benefit) rate |                                              |                                                                         | (35.0 | )%   |      |    | (35.0 | )%    |       |    | (35.0 | )%  
|                                                 | Increase (reduction) in rate resulting from: |                                                                         |       |      |      |    |       |       |       |    |       |      |     
|                                                 |                                              | State and local tax                                                     |       |      | (3.0 | )% |       |       | (5.7  | )% |       |      | (2.0 | )%
|                                                 |                                              | Foreign taxes, including results of examinations and carrybacks         |       |      | 11.1 | %  |       |       | 8.7   | %  |       |      | 2.6  | % 
|                                                 |                                              | U.S. residual tax on branch earnings                                    |       |      |      |    |       |       | 7.9   | %  |       |      | 2.7  | % 
|                                                 |                                              | Research and expenditure tax credits                                    |       |      | (1.3 | )% |       |       |      |    |       |      |     |   
|                                                 |                                              | Adjustments in deferred income tax as a result of change in
    control |       |      | 3.0  | %  |       |       | 20.7  | %  |       |      |     |   
|                                                 |                                              | U.S. income taxes on foreign earnings not previously taxed              |       |      | 28.0 | %  |       |       |      |    |       |      |     |   
|                                                 |                                              | Changes in valuation allowance                                          |       |      | 30.5 | %  |       |       | 594.6 | %  |       |      | 44.2 | % 
|                                                 |                                              | Other                                                                   |       |      |     |    |       |       | 3.0   | %  |       |      | 1.9  | % 
|                                                 |                                              |                                                                         |       |      |      |    |       |       |      
|                                                 | Income tax expense                           |                                                                         |       | 33.3 | %    |    |       | 594.2 | %     |    |       | 14.4 | %   
|                                                 |                                              |                                                                         |       |      |      |    |       |       |      





66



---



##### 



GXS CORPORATION AND SUBSIDIARIES


Notes to Consolidated Financial
Statements  (Continued)




|                          |                                                |                                |   |          |         |  |   |          |         | 
|------------------------- | ---------------------------------------------- | ------------------------------ | - | -------- | ------- |  | - | -------- | ------- | 
|                          |                                                | 2003                           |   |          | 2004    | 
|                          |                                                |                                |   |          |         | 
|Deferred tax assets:      |                                                |                                |   |          |         |  |   |         
|                          | Accrued and other liabilities                  |                                | $ | 20,807   |         |  | $ | 18,803   |        
|                          | Domestic net operating loss carryforwards      |                                |   | 23,020   |         |  |   | 76,533   |        
|                          | Foreign net operating loss carryforwards       |                                |   | 9,842    |         |  |   | 9,141    |        
|                          | Tax credit carryforwards                       |                                |   | 126      |         |  |   | 137      |        
|                          | Unrealized loss on investment                  |                                |   | 3,865    |         |  |   | 4,320    |        
|                          | Intangible assets                              |                                |   | 245,208  |         |  |   | 223,527  |        
|                          | Property and equipment                         |                                |   | 791      |         |  |   | 756      |        
|                          | Other                                          |                                |   | 4,937    |         |  |   | 4,623    |        
|                          |                                                |                                |   |          |         | 
|                          |                                                | Gross deferred tax assets      |   |          | 308,596 |  |   |          | 337,840 | 
|                          | Valuation allowance                            |                                |   | (271,970 | )       |  |   | (313,411 | )      
|                          |                                                |                                |   |          |         | 
|                          |                                                | Net deferred tax assets        |   |          | 36,626  |  |   |          | 24,429  | 
|                          |                                                |                                |   |          |         | 
|Deferred tax liabilities: |                                                |                                |   |          |         |  |   |         
|                          | Property and equipment                         |                                |   | 31,863   |         |  |   | 18,401   |        
|                          | Intangible assets                              |                                |   |         |         |  |   | 4,037    |        
|                          | Undistributed earnings of foreign subsidiaries |                                |   |         |         |  |   | 862      |        
|                          |                                                |                                |   |          |         | 
|                          |                                                | Gross deferred tax liabilities |   |          | 31,863  |  |   |          | 23,300  | 
|                          |                                                |                                |   |          |         | 
|                          |                                                | Net deferred tax assets        |   | $        | 4,763   |  |   | $        | 1,129   | 
|                          |                                                |                                |   |          |         | 





67



---



##### 



GXS CORPORATION AND SUBSIDIARIES


Notes to Consolidated Financial
Statements  (Continued)






|     |                            
|---- | ---------------------------
|(11) | Lease and Other Commitments



|           |  |   |        | 
|---------- |  | - | ------ | 
|2005       |  | $ | 15,340 | 
|2006       |  |   | 12,716 | 
|2007       |  |   | 10,171 | 
|2008       |  |   | 8,508  | 
|2009       |  |   | 7,922  | 
|Thereafter |  |   | 35,239 | 
|           |  |   |       
|           |  | $ | 89,896 | 
|           |  |   |       









|     |                                      
|---- | -------------------------------------
|(12) | Pension and Other Retirement Benefits





|     |                  
|---- | -----------------
|(13) | Stock Option Plan



68



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##### 



GXS CORPORATION AND SUBSIDIARIES


Notes to Consolidated Financial
Statements  (Continued)




|                                                            |  |  |        |  
|----------------------------------------------------------- |  |  | ------ | -
|Granted during 2002 and outstanding as of December 31, 2002 |  |  | 10,761 |  
|Granted                                                     |  |  | 2,564  |  
|Terminated                                                  |  |  | (1,043 | )
|                                                            |  |  |       
|Outstanding as of December 31, 2003                         |  |  | 12,282 |  
|Granted                                                     |  |  | 2,800  |  
|Terminated                                                  |  |  | (5,874 | )
|                                                            |  |  |       
|Outstanding as of December 31, 2004                         |  |  | 9,208  |  
|                                                            |  |  |       

1 36








|     |              
|---- | -------------
|(14) | Contingencies







|     |              
|---- | -------------
|(15) | Restructuring



69



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##### 



GXS CORPORATION AND SUBSIDIARIES


Notes to Consolidated Financial
Statements  (Continued)












|                                   |  |                                      |         |   |      |   |        |      |  |   |         |   |  |   |         |  
|---------------------------------- |  | ------------------------------------ | ------- | - | ---- | - | ------ | ---- |  | - | ------- | - |  | - | ------- | -
|                                   |  | Restructuring Activities  Severance |         |   |     
|                                   |  |                                      |         |   |     
|                                   |  | 2002                                 |         |   | 2003 |   |        | 2004 |  |   |        
|                                   |  | and Prior                            |         |   | Plan |   |        | Plan |  |   | Total   |  
|                                   |  |                                      |         |   |      |   |        |      |  |   |         |  
|Balance as of January 1, 2002      |  | $                                    | 28      |   |      | $ |       |      |  | $ |        |   |  | $ | 28      |  
|Restructuring expense              |  |                                      | 10,967  |   |      |   |       |      |  |   |        |   |  |   | 10,967  |  
|Payments and other adjustments     |  |                                      | (10,661 | ) |      |   |       |      |  |   |        |   |  |   | (10,661 | )
|                                   |  |                                      |         |   |      |   |        |      |  |   |         |  
|Balance as of December 31, 2002    |  |                                      | 334     |   |      |   |       |      |  |   |        |   |  |   | 334     |  
|Restructuring expense              |  |                                      |         |   |      |   | 13,573 |      |  |   |        |   |  |   | 13,573  |  
|Payments and other adjustments     |  |                                      | (334    | ) |      |   | (3,981 | )    |  |   |        |   |  |   | (4,315  | )
|                                   |  |                                      |         |   |      |   |        |      |  |   |         |  
|Balance as of December 31, 2003    |  |                                      |        |   |      |   | 9,592  |      |  |   |        |   |  |   | 9,592   |  
|Restructuring expense (adjustment) |  |                                      |         |   |      |   | (124   | )    |  |   | 20,482  |   |  |   | 20,358  |  
|Payments and other adjustments     |  |                                      |         |   |      |   | (9,151 | )    |  |   | (14,468 | ) |  |   | (23,619 | )
|                                   |  |                                      |         |   |      |   |        |      |  |   |         |  
|Balance as of December 31, 2004    |  | $                                    |        |   |      | $ | 317    |      |  | $ | 6,014   |   |  | $ | 6,331   |  
|                                   |  |                                      |         |   |      |   |        |      |  |   |         |  

70



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##### 



GXS CORPORATION AND SUBSIDIARIES


Notes to Consolidated Financial
Statements  (Continued)


|                                |  |                                       |        |   |      |   |        |      |  |   |       |  |  |   |        |  
|------------------------------- |  | ------------------------------------- | ------ | - | ---- | - | ------ | ---- |  | - | ----- |  |  | - | ------ | -
|                                |  | Restructuring Activities  Facilities |        |   |     
|                                |  |                                       |        |   |     
|                                |  | 2002                                  |        |   | 2003 |   |        | 2004 |  |   |      
|                                |  | and Prior                             |        |   | Plan |   |        | Plan |  |   | Total | 
|                                |  |                                       |        |   |      |   |        |      |  |   |       | 
|Balance as of January 1, 2002   |  | $                                     |       |   |      | $ |       |      |  | $ |      |  |  | $ |       |  
|Restructuring expense           |  |                                       | 2,824  |   |      |   |       |      |  |   |      |  |  |   | 2,824  |  
|Payments and other adjustments  |  |                                       | (367   | ) |      |   |       |      |  |   |      |  |  |   | (367   | )
|                                |  |                                       |        |   |      |   |        |      |  |   |       | 
|Balance as of December 31, 2002 |  |                                       | 2,457  |   |      |   |       |      |  |   |      |  |  |   | 2,457  |  
|Restructuring expense           |  |                                       |       |   |      |   | 12,650 |      |  |   |      |  |  |   | 12,650 |  
|Payments and other adjustments  |  |                                       | (2,457 | ) |      |   | (404   | )    |  |   |      |  |  |   | (2,861 | )
|                                |  |                                       |        |   |      |   |        |      |  |   |       | 
|Balance as of December 31, 2003 |  |                                       |       |   |      |   | 12,246 |      |  |   |      |  |  |   | 12,246 |  
|Restructuring expense           |  |                                       |       |   |      |   | 67     |      |  |   | 6,013 |  |  |   | 6,080  |  
|Payments and other adjustments  |  |                                       |       |   |      |   | (2,273 | )    |  |   | 457   |  |  |   | (1,816 | )
|                                |  |                                       |        |   |      |   |        |      |  |   |       | 
|Balance as of December 31, 2004 |  | $                                     |       |   |      | $ | 10,040 |      |  | $ | 6,470 |  |  | $ | 16,510 |  
|                                |  |                                       |        |   |      |   |        |      |  |   |       | 

|                                |  |                                  |        |   |      |   |      |      |  |       |   |  |  |   |        |  
|------------------------------- |  | -------------------------------- | ------ | - | ---- | - | ---- | ---- |  | ----- | - |  |  | - | ------ | -
|                                |  | Restructuring Activities  Other |        |  
|                                |  |                                  |        |  
|                                |  | 2002                             |        |   | 2003 |   |      | 2004 |  |      
|                                |  | and Prior                        |        |   | Plan |   |      | Plan |  | Total |  
|                                |  |                                  |        |   |      |   |      |      |  |       |  
|Balance as of January 1, 2002   |  | $                                |       |   |      | $ |     |      |  | $     |  |  |  | $ |       |  
|Restructuring expense           |  |                                  | 4,615  |   |      |   |     |      |  |       |  |  |  |   | 4,615  |  
|Payments and other adjustments  |  |                                  | (4,615 | ) |      |   |     |      |  |       |  |  |  |   | (4,615 | )
|                                |  |                                  |        |   |      |   |      |      |  |       |   | 
|Balance as of December 31, 2002 |  |                                  |       |   |      |   |     |      |  |       |  |  |  |   |       |  
|Restructuring expense           |  |                                  |       |   |      |   | 448  |      |  |       |  |  |  |   | 448    |  
|Payments and other adjustments  |  |                                  |       |   |      |   | (448 | )    |  |       |  |  |  |   | (448   | )
|                                |  |                                  |        |   |      |   |      |      |  |       |   | 
|Balance as of December 31, 2003 |  | $                                |       |   |      | $ |     |      |  | $     |  |  |  | $ |       |  
|                                |  |                                  |        |   |      |   |      |      |  |       |   | 





|     |                         
|---- | ------------------------
|(16) | Asset Impairment Charges





|     |             
|---- | ------------
|(17) | Acquisitions



71



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##### 



GXS CORPORATION AND SUBSIDIARIES


Notes to Consolidated Financial
Statements  (Continued)




|                   |  |   |       | 
|------------------ |  | - | ----- | 
|Current assets     |  | $ | 461   | 
|Non-current assets |  |   | 1,439 | 
|                   |  |   |      
|                   |  | $ | 1,900 | 
|                   |  |   |      





|                                                                       |  |   |        |  
|---------------------------------------------------------------------- |  | - | ------ | -
|Cash                                                                   |  | $ | 15,001 |  
|Estimated fair value of capital stock issued by GXS Holdings,
    Inc. |  |   | 15,000 |  
|                                                                       |  |   |       
|Total purchase price                                                   |  | $ | 30,001 |  
|                                                                       |  |   |       
|Cash                                                                   |  | $ | 4,526  |  
|Other current assets                                                   |  |   | 2,142  |  
|Property and equipment                                                 |  |   | 155    |  
|Estimated fair value of liabilities assumed                            |  |   | (3,216 | )
|Identifiable intangible assets                                         |  |   | 12,225 |  
|Goodwill                                                               |  |   | 13,292 |  
|Other assets                                                           |  |   | 877    |  
|                                                                       |  |   |       
|                                                                       |  | $ | 30,001 |  
|                                                                       |  |   |       





|         |  |      |          |   |      |   |         |  
|-------- |  | ---- | -------- | - | ---- | - | ------- | -
|         |  | 2003 |          |   | 2004 |  
|         |  |      |          |   |      |  
|Revenue  |  | $    | 377,043  |   |      | $ | 329,861 |  
|Net loss |  | $    | (313,298 | ) |      | $ | (85,150 | )

72



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##### 



GXS CORPORATION AND SUBSIDIARIES


Notes to Consolidated Financial
Statements  (Continued)




|     |                            
|---- | ---------------------------
|(18) | Other Income (Expense), net



|                                                |  |      |        |   |      |   |       |      |  |   |       |  
|----------------------------------------------- |  | ---- | ------ | - | ---- | - | ----- | ---- |  | - | ----- | -
|                                                |  | 2002 |        |   | 2003 |   |       | 2004 | 
|                                                |  |      |        |   |      |   |       |      | 
|Gains (losses) on foreign currency transactions |  | $    | (1,062 | ) |      | $ | 533   |      |  | $ | 1,518 |  
|Minority interest                               |  |      | 545    |   |      |   | 507   |      |  |   | 463   |  
|Investment banking fees                         |  |      |       |   |      |   |      |      |  |   | (750  | )
|Other, net                                      |  |      | 434    |   |      |   | 208   |      |  |   | 99    |  
|                                                |  |      |        |   |      |   |       |      | 
|                                                |  | $    | (83    | ) |      | $ | 1,248 |      |  | $ | 1,330 |  
|                                                |  |      |        |   |      |   |       |      | 



|     |                                                          
|---- | ---------------------------------------------------------
|(19) | Supplemental Condensed Consolidated Financial Information



73



---



##### 



GXS CORPORATION AND SUBSIDIARIES


Consolidating Balance Sheet


December 31, 2003


|                                                                       |                           |                           |          |        |            |      |         |            |         |   |              |         |         |              |          |          |          |   |          |        |         | 
|---------------------------------------------------------------------- | ------------------------- | ------------------------- | -------- | ------ | ---------- | ---- | ------- | ---------- | ------- | - | ------------ | ------- | ------- | ------------ | -------- | -------- | -------- | - | -------- | ------ | ------- | 
|                                                                       |                           |                           |          |        |            | Non- |         |            |         |   |             
|                                                                       |                           | Parent                    |          |        | Guarantors |      |         | Guarantors |         |   | Eliminations |         |         | Consolidated |         
|                                                                       |                           |                           |          |        |            |      |         |            |         |   |              |         |         |              |         
|                                                                       |                           | (In thousands)            |         
|ASSETS                                                                
|Current assets:                                                        |                           |                           |          |        |            |      |         |            |         |   |              |         |         |              |          |          |          |   |          |       
|                                                                       | Cash and cash equivalents |                           | $        |       |            |      | $       | 19,389     |         |   | $            | 27,341  |         |              | $        |         |          |   | $        | 46,730 |        
|                                                                       | Receivables               |                           |          |       |            |      |         | 33,963     |         |   |              | 28,365  |         |              |          |         |          |   |          | 62,328 |        
|                                                                       | Other current assets      |                           |          | 15     |            |      |         | 8,750      |         |   |              | 1,624   |         |              |          |         |          |   |          | 10,389 |        
|                                                                       | Advances to subsidiaries  |                           |          | 262    |            |      |         | 176,669    |         |   |              | 96,517  |         |              |          | (273,448 | )        |   |          |       |        
|                                                                       |                           |                           |          |        |            |      |         |            |         |   |              |         |         |              |         
|                                                                       |                           | Total current assets      |          |        | 277        |      |         |            | 238,771 |   |              |         | 153,847 |              |          |          | (273,448 | ) |          |        | 119,447 | 
|Investments in affiliates                                              |                           |                           |         |        |            |      | 2,403   |            |         |   | 526          |         |         |              |         |          |          |   | 2,929    |       
|Investments in subsidiaries                                            |                           |                           | 203,797  |        |            |      | 33,472  |            |         |   |             |         |         |              | (237,269 | )        |          |   |         |       
|Property and equipment, net                                            |                           |                           | 235      |        |            |      | 127,476 |            |         |   | 4,990        |         |         |              |         |          |          |   | 132,701  |       
|Goodwill, net                                                          |                           |                           |         |        |            |      | 6,953   |            |         |   | 4,976        |         |         |              |         |          |          |   | 11,929   |       
|Other noncurrent assets                                                |                           |                           | 10,659   |        |            |      | 4,204   |            |         |   | 5,431        |         |         |              | (11,750  | )        |          |   | 8,544    |       
|Deferred financing costs                                               |                           |                           | 15,886   |        |            |      |        |            |         |   |             |         |         |              |         |          |          |   | 15,886   |       
|                                                                       |                           |                           |          |        |            |      |         |            |         |   |              |         |         |              |         
|                                                                       |                           | $                         | 230,854  |        |            | $    | 413,279 |            |         | $ | 169,770      |         |         | $            | (522,467 | )        |          | $ | 291,436  |       
|                                                                       |                           |                           |          |        |            |      |         |            |         |   |              |         |         |              |         
|                                                                      
|LIABILITIES, MINORITY INTEREST, AND STOCKHOLDERS EQUITY
    (DEFICIT)
|Current liabilities:                                                   |                           |                           |          |        |            |      |         |            |         |   |              |         |         |              |          |          |          |   |          |       
|                                                                       | Trade payables            |                           | $        | 1,311  |            |      | $       | 7,495      |         |   | $            | 3,333   |         |              | $        |         |          |   | $        | 12,139 |        
|                                                                       | Other current liabilities |                           |          | 15,319 |            |      |         | 40,797     |         |   |              | 17,657  |         |              |          |         |          |   |          | 73,773 |        
|                                                                       | Advances from affiliates  |                           |          | 33,439 |            |      |         | 136,299    |         |   |              | 103,710 |         |              |          | (273,448 | )        |   |          |       |        
|                                                                       |                           |                           |          |        |            |      |         |            |         |   |              |         |         |              |         
|                                                                       |                           | Total current liabilities |          |        | 50,069     |      |         |            | 184,591 |   |              |         | 124,700 |              |          |          | (273,448 | ) |          |        | 85,912  | 
|Long-term debt                                                         |                           |                           | 405,520  |        |            |      |        |            |         |   |             |         |         |              |         |          |          |   | 405,520  |       
|Other liabilities                                                      |                           |                           |         |        |            |      | 24,891  |            |         |   | 10,788       |         |         |              | (11,750  | )        |          |   | 23,929   |       
|                                                                       |                           |                           |          |        |            |      |         |            |         |   |              |         |         |              |         
|                                                                       |                           | Total liabilities         |          |        | 455,589    |      |         |            | 209,482 |   |              |         | 135,488 |              |          |          | (285,198 | ) |          |        | 515,361 | 
|Minority interest                                                      |                           |                           |         |        |            |      |        |            |         |   | 810          |         |         |              |         |          |          |   | 810      |       
|Stockholders equity (deficit)                                         |                           |                           | (224,735 | )      |            |      | 203,797 |            |         |   | 33,472       |         |         |              | (237,269 | )        |          |   | (224,735 | )     
|                                                                       |                           |                           |          |        |            |      |         |            |         |   |              |         |         |              |         
|                                                                       |                           | $                         | 230,854  |        |            | $    | 413,279 |            |         | $ | 169,770      |         |         | $            | (522,467 | )        |          | $ | 291,436  |       
|                                                                       |                           |                           |          |        |            |      |         |            |         |   |              |         |         |              |         

74



---



##### 



GXS CORPORATION AND SUBSIDIARIES


Consolidating Balance Sheet


December 31, 2004


|                                                                       |                           |                           |          |        |            |      |         |            |         |   |              |         |         |              |          |          |          |   |          |        |         | 
|---------------------------------------------------------------------- | ------------------------- | ------------------------- | -------- | ------ | ---------- | ---- | ------- | ---------- | ------- | - | ------------ | ------- | ------- | ------------ | -------- | -------- | -------- | - | -------- | ------ | ------- | 
|                                                                       |                           |                           |          |        |            | Non- |         |            |         |   |             
|                                                                       |                           | Parent                    |          |        | Guarantors |      |         | Guarantors |         |   | Eliminations |         |         | Consolidated |         
|                                                                       |                           |                           |          |        |            |      |         |            |         |   |              |         |         |              |         
|                                                                       |                           | (In thousands)            |         
|ASSETS                                                                
|Current assets:                                                        |                           |                           |          |        |            |      |         |            |         |   |              |         |         |              |          |          |          |   |          |       
|                                                                       | Cash and cash equivalents |                           | $        |       |            |      | $       | 7,522      |         |   | $            | 16,966  |         |              | $        |         |          |   | $        | 24,488 |        
|                                                                       | Receivables               |                           |          |       |            |      |         | 25,281     |         |   |              | 33,600  |         |              |          |         |          |   |          | 58,881 |        
|                                                                       | Other current assets      |                           |          | 149    |            |      |         | 6,466      |         |   |              | 8,326   |         |              |          |         |          |   |          | 14,941 |        
|                                                                       | Advances to subsidiaries  |                           |          | 20,410 |            |      |         | 230,093    |         |   |              | 139,511 |         |              |          | (390,014 | )        |   |          |       |        
|                                                                       |                           |                           |          |        |            |      |         |            |         |   |              |         |         |              |         
|                                                                       |                           | Total current assets      |          |        | 20,559     |      |         |            | 269,362 |   |              |         | 198,403 |              |          |          | (390,014 | ) |          |        | 98,310  | 
|Investments in affiliates                                              |                           |                           |         |        |            |      | 1,560   |            |         |   | 341          |         |         |              |         |          |          |   | 1,901    |       
|Investments in subsidiaries                                            |                           |                           | 105,877  |        |            |      | (11,841 | )          |         |   |             |         |         |              | (94,036  | )        |          |   |         |       
|Property and equipment, net                                            |                           |                           | 235      |        |            |      | 98,098  |            |         |   | 3,323        |         |         |              |         |          |          |   | 101,656  |       
|Goodwill, net                                                          |                           |                           |         |        |            |      | 19,701  |            |         |   | 6,059        |         |         |              |         |          |          |   | 25,760   |       
|Other noncurrent assets                                                |                           |                           | 1,484    |        |            |      | 20,395  |            |         |   | 5,650        |         |         |              | (11,750  | )        |          |   | 15,779   |       
|Deferred financing costs                                               |                           |                           | 12,279   |        |            |      |        |            |         |   |             |         |         |              |         |          |          |   | 12,279   |       
|                                                                       |                           |                           |          |        |            |      |         |            |         |   |              |         |         |              |         
|                                                                       |                           | $                         | 140,434  |        |            | $    | 397,275 |            |         | $ | 213,776      |         |         | $            | (495,800 | )        |          | $ | 255,685  |       
|                                                                       |                           |                           |          |        |            |      |         |            |         |   |              |         |         |              |         
|                                                                      
|LIABILITIES, MINORITY INTEREST, AND STOCKHOLDERS EQUITY
    (DEFICIT)
|Current liabilities:                                                   |                           |                           |          |        |            |      |         |            |         |   |              |         |         |              |          |          |          |   |          |       
|                                                                       | Trade payables            |                           | $        | 1,311  |            |      | $       | 11,081     |         |   | $            | 3,095   |         |              | $        |         |          |   | $        | 15,487 |        
|                                                                       | Other current liabilities |                           |          | 21,094 |            |      |         | 39,167     |         |   |              | 31,453  |         |              |          |         |          |   |          | 91,714 |        
|                                                                       | Advances from affiliates  |                           |          |       |            |      |         | 212,090    |         |   |              | 177,924 |         |              |          | (390,014 | )        |   |          |       |        
|                                                                       |                           |                           |          |        |            |      |         |            |         |   |              |         |         |              |         
|                                                                       |                           | Total current liabilities |          |        | 22,405     |      |         |            | 262,338 |   |              |         | 212,472 |              |          |          | (390,014 | ) |          |        | 107,201 | 
|Long-term debt                                                         |                           |                           | 406,489  |        |            |      |        |            |         |   |             |         |         |              |         |          |          |   | 406,489  |       
|Other liabilities                                                      |                           |                           |         |        |            |      | 29,060  |            |         |   | 12,798       |         |         |              | (11,750  | )        |          |   | 30,108   |       
|                                                                       |                           |                           |          |        |            |      |         |            |         |   |              |         |         |              |         
|                                                                       |                           | Total liabilities         |          |        | 428,894    |      |         |            | 291,398 |   |              |         | 225,270 |              |          |          | (401,764 | ) |          |        | 543,798 | 
|Minority interest                                                      |                           |                           |         |        |            |      |        |            |         |   | 347          |         |         |              |         |          |          |   | 347      |       
|Stockholders equity (deficit)                                         |                           |                           | (288,460 | )      |            |      | 105,877 |            |         |   | (11,841      | )       |         |              | (94,036  | )        |          |   | (288,460 | )     
|                                                                       |                           |                           |          |        |            |      |         |            |         |   |              |         |         |              |         
|                                                                       |                           | $                         | 140,434  |        |            | $    | 397,275 |            |         | $ | 213,776      |         |         | $            | (495,800 | )        |          | $ | 255,685  |       
|                                                                       |                           |                           |          |        |            |      |         |            |         |   |              |         |         |              |         

75



---



##### 



GXS CORPORATION AND SUBSIDIARIES


Consolidating Statement of Operations and Comprehensive
Income (Loss)


Year ended December 31, 2002


|                                               |                                                              |                |         |         |            |      |         |            |   |   |              |        |  |              |         |        |  |   |         |         |  
|---------------------------------------------- | ------------------------------------------------------------ | -------------- | ------- | ------- | ---------- | ---- | ------- | ---------- | - | - | ------------ | ------ |  | ------------ | ------- | ------ |  | - | ------- | ------- | -
|                                               |                                                              |                |         |         |            | Non- |         |            |   |   |             
|                                               |                                                              | Parent         |         |         | Guarantors |      |         | Guarantors |   |   | Eliminations |        |  | Consolidated |        
|                                               |                                                              |                |         |         |            |      |         |            |   |   |              |        |  |              |        
|                                               |                                                              | (In thousands) |        
|Revenues                                       |                                                              | $              |        |         |            | $    | 349,903 |            |   | $ | 133,857      |        |  | $            | (74,306 | )      |  | $ | 409,454 |        
|Costs and operating expenses                   |                                                              |                | 1,109   |         |            |      | 318,827 |            |   |   | 114,184      |        |  |              | (74,306 | )      |  |   | 359,814 |        
|Restructuring and related charges              |                                                              |                |        |         |            |      | 10,965  |            |   |   | 7,441        |        |  |              |        |        |  |   | 18,406  |        
|Asset impairment charges                       |                                                              |                |        |         |            |      | 5,425   |            |   |   |             |        |  |              |        |        |  |   | 5,425   |        
|Corporate charge from General Electric Company |                                                              |                |        |         |            |      | 7,331   |            |   |   |             |        |  |              |        |        |  |   | 7,331   |        
|                                               |                                                              |                |         |         |            |      |         |            |   |   |              |        |  |              |        
|                                               | Operating income (loss)                                      |                |         | (1,109  | )          |      |         | 7,355      |   |   |              | 12,232 |  |              |         |       |  |   |         | 18,478  |  
|Other income (expense), net                    |                                                              |                | (28,123 | )       |            |      | (23,430 | )          |   |   | 3,476        |        |  |              |        |        |  |   | (48,077 | )      
|                                               |                                                              |                |         |         |            |      |         |            |   |   |              |        |  |              |        
|                                               | Income (loss) before income taxes                            |                |         | (29,232 | )          |      |         | (16,075    | ) |   |              | 15,708 |  |              |         |       |  |   |         | (29,599 | )
|Provision (benefit) for income taxes           |                                                              |                | (11,547 | )       |            |      | 10,157  |            |   |   | 11,248       |        |  |              |        |        |  |   | 9,858   |        
|                                               |                                                              |                |         |         |            |      |         |            |   |   |              |        |  |              |        
|                                               | Income (loss) before equity in income (loss) of subsidiaries |                |         | (17,685 | )          |      |         | (26,232    | ) |   |              | 4,460  |  |              |         |       |  |   |         | (39,457 | )
|Equity in income (loss) of subsidiaries        |                                                              |                | (21,772 | )       |            |      | 4,460   |            |   |   |             |        |  |              | 17,312  |        |  |   |        |        
|                                               |                                                              |                |         |         |            |      |         |            |   |   |              |        |  |              |        
|                                               | Net income (loss)                                            |                |         | (39,457 | )          |      |         | (21,772    | ) |   |              | 4,460  |  |              |         | 17,312 |  |   |         | (39,457 | )
|Foreign currency translation adjustments       |                                                              |                |        |         |            |      |        |            |   |   | 9,671        |        |  |              |        |        |  |   | 9,671   |        
|                                               |                                                              |                |         |         |            |      |         |            |   |   |              |        |  |              |        
|                                               | Comprehensive income (loss)                                  |                | $       | (39,457 | )          |      | $       | (21,772    | ) |   | $            | 14,131 |  |              | $       | 17,312 |  |   | $       | (29,786 | )
|                                               |                                                              |                |         |         |            |      |         |            |   |   |              |        |  |              |        

76



---



##### 



GXS CORPORATION AND SUBSIDIARIES


Consolidating Statement of Operations and Comprehensive
Income (Loss)


Year ended December 31, 2003


|                                         |                                                              |                |          |          |            |      |         |            |   |   |              |        |  |              |         |         |  |   |         |          |  
|---------------------------------------- | ------------------------------------------------------------ | -------------- | -------- | -------- | ---------- | ---- | ------- | ---------- | - | - | ------------ | ------ |  | ------------ | ------- | ------- |  | - | ------- | -------- | -
|                                         |                                                              |                |          |          |            | Non- |         |            |   |   |             
|                                         |                                                              | Parent         |          |          | Guarantors |      |         | Guarantors |   |   | Eliminations |        |  | Consolidated |        
|                                         |                                                              |                |          |          |            |      |         |            |   |   |              |        |  |              |        
|                                         |                                                              | (In thousands) |         
|Revenues                                 |                                                              | $              |         |          |            | $    | 314,439 |            |   | $ | 140,352      |        |  | $            | (91,322 | )       |  | $ | 363,469 |         
|Costs and operating expenses             |                                                              |                | 192      |          |            |      | 290,364 |            |   |   | 120,255      |        |  |              | (91,322 | )       |  |   | 319,489 |         
|Restructuring and related charges        |                                                              |                |         |          |            |      | 25,987  |            |   |   | 684          |        |  |              |        |         |  |   | 26,671  |         
|Asset impairment charges                 |                                                              |                |         |          |            |      | 6,500   |            |   |   |             |        |  |              |        |         |  |   | 6,500   |         
|                                         |                                                              |                |          |          |            |      |         |            |   |   |              |        |  |              |        
|                                         | Operating income (loss)                                      |                |          | (192     | )          |      |         | (8,412     | ) |   |              | 19,413 |  |              |         |        |  |   |         | 10,809   |  
|Other income (expense), net              |                                                              |                | (57,647  | )        |            |      | 4,939   |            |   |   | (1,788       | )      |  |              |        |         |  |   | (54,496 | )       
|                                         |                                                              |                |          |          |            |      |         |            |   |   |              |        |  |              |        
|                                         | Income (loss) before income taxes                            |                |          | (57,839  | )          |      |         | (3,473     | ) |   |              | 17,625 |  |              |         |        |  |   |         | (43,687  | )
|Provision (benefit) for income taxes     |                                                              |                | (1,485   | )        |            |      | 251,988 |            |   |   | 9,087        |        |  |              |        |         |  |   | 259,590 |         
|                                         |                                                              |                |          |          |            |      |         |            |   |   |              |        |  |              |        
|                                         | Income (loss) before equity in income (loss) of subsidiaries |                |          | (56,354  | )          |      |         | (255,461   | ) |   |              | 8,538  |  |              |         |        |  |   |         | (303,277 | )
|Equity in income (loss) of subsidiaries  |                                                              |                | (246,923 | )        |            |      | 8,538   |            |   |   |             |        |  |              | 238,385 |         |  |   |        |         
|                                         |                                                              |                |          |          |            |      |         |            |   |   |              |        |  |              |        
|                                         | Net income (loss)                                            |                |          | (303,277 | )          |      |         | (246,923   | ) |   |              | 8,538  |  |              |         | 238,385 |  |   |         | (303,277 | )
|Foreign currency translation adjustments |                                                              |                |         |          |            |      |        |            |   |   | 4,509        |        |  |              |        |         |  |   | 4,509   |         
|                                         |                                                              |                |          |          |            |      |         |            |   |   |              |        |  |              |        
|                                         | Comprehensive income (loss)                                  |                | $        | (303,277 | )          |      | $       | (246,923   | ) |   | $            | 13,047 |  |              | $       | 238,385 |  |   | $       | (298,768 | )
|                                         |                                                              |                |          |          |            |      |         |            |   |   |              |        |  |              |        

77



---



##### 



GXS CORPORATION AND SUBSIDIARIES


Consolidating Statement of Operations and Comprehensive
Income (Loss)


Year ended December 31, 2004


|                                                |                                                              |                |          |         |            |      |          |            |   |   |              |        |  |              |         |         |  |   |         |         |  
|----------------------------------------------- | ------------------------------------------------------------ | -------------- | -------- | ------- | ---------- | ---- | -------- | ---------- | - | - | ------------ | ------ |  | ------------ | ------- | ------- |  | - | ------- | ------- | -
|                                                |                                                              |                |          |         |            | Non- |          |            |   |   |             
|                                                |                                                              | Parent         |          |         | Guarantors |      |          | Guarantors |   |   | Eliminations |        |  | Consolidated |        
|                                                |                                                              |                |          |         |            |      |          |            |   |   |              |        |  |              |        
|                                                |                                                              | (In thousands) |         
|Revenues                                        |                                                              | $              |         |         |            | $    | 263,715  |            |   | $ | 162,452      |        |  | $            | (97,570 | )       |  | $ | 328,597 |        
|Costs and operating expenses                    |                                                              |                |         |         |            |      | 283,570  |            |   |   | 122,864      |        |  |              | (97,570 | )       |  |   | 308,864 |        
|Restructuring and related charges               |                                                              |                |         |         |            |      | 13,197   |            |   |   | 13,241       |        |  |              |        |         |  |   | 26,438  |        
|Asset impairment charges                        |                                                              |                |         |         |            |      | 6,509    |            |   |   |             |        |  |              |        |         |  |   | 6,509   |        
|                                                |                                                              |                |          |         |            |      |          |            |   |   |              |        |  |              |        
|                                                | Operating income (loss)                                      |                |          |        |            |      |          | (39,561    | ) |   |              | 26,347 |  |              |         |        |  |   |         | (13,214 | )
|Other income (expense), net                     |                                                              |                | 42,569   |         |            |      | (100,911 | )          |   |   | (2,628       | )      |  |              |        |         |  |   | (60,970 | )      
|                                                |                                                              |                |          |         |            |      |          |            |   |   |              |        |  |              |        
|                                                | Income (loss) before income taxes                            |                |          | 42,569  |            |      |          | (140,472   | ) |   |              | 23,719 |  |              |         |        |  |   |         | (74,184 | )
|Provision for income taxes                      |                                                              |                |         |         |            |      | 6,638    |            |   |   | 4,058        |        |  |              |        |         |  |   | 10,696  |        
|                                                |                                                              |                |          |         |            |      |          |            |   |   |              |        |  |              |        
|                                                | Income (loss) before equity in income (loss) of subsidiaries |                |          | 42,569  |            |      |          | (147,110   | ) |   |              | 19,661 |  |              |         |        |  |   |         | (84,880 | )
|Equity in income (loss) of subsidiaries         |                                                              |                | (127,449 | )       |            |      | 19,661   |            |   |   |             |        |  |              | 107,788 |         |  |   |        |        
|                                                |                                                              |                |          |         |            |      |          |            |   |   |              |        |  |              |        
|                                                | Net income (loss)                                            |                |          | (84,880 | )          |      |          | (127,449   | ) |   |              | 19,661 |  |              |         | 107,788 |  |   |         | (84,880 | )
|Unrealized gain on marketable equity securities |                                                              |                |         |         |            |      | 193      |            |   |   |             |        |  |              |        |         |  |   | 193     |        
|Foreign currency translation adjustments        |                                                              |                |         |         |            |      |         |            |   |   | (286         | )      |  |              |        |         |  |   | (286    | )      
|                                                |                                                              |                |          |         |            |      |          |            |   |   |              |        |  |              |        
|                                                | Comprehensive income (loss)                                  |                | $        | (84,880 | )          |      | $        | (127,256   | ) |   | $            | 19,375 |  |              | $       | 107,788 |  |   | $       | (84,973 | )
|                                                |                                                              |                |          |         |            |      |          |            |   |   |              |        |  |              |        

78



---



##### 



GXS CORPORATION AND SUBSIDIARIES


Consolidating Statement of Cash Flows


Year ended December 31, 2002


|                                             |                                                                                                        |                                                  |                                                     |          |            |         |        |            |         |         |              |         |         |              |   |        |         |   |        |          |        |         |  
|-------------------------------------------- | ------------------------------------------------------------------------------------------------------ | ------------------------------------------------ | --------------------------------------------------- | -------- | ---------- | ------- | ------ | ---------- | ------- | ------- | ------------ | ------- | ------- | ------------ | - | ------ | ------- | - | ------ | -------- | ------ | ------- | -
|                                             |                                                                                                        |                                                  |                                                     |          |            | Non-    |        |            |         |         |             
|                                             |                                                                                                        | Parent                                           |                                                     |          | Guarantors |         |        | Guarantors |         |         | Eliminations |         |         | Consolidated |  
|                                             |                                                                                                        |                                                  |                                                     |          |            |         |        |            |         |         |              |         |         |              |  
|                                             |                                                                                                        | (In thousands)                                   |                                                    
|Cash flows from operating activities:        |                                                                                                        |                                                  |                                                     |          |            |         |        |            |         |         |              |         |         |              |   |        |         |   |        |         
|                                             | Net income (loss)                                                                                      |                                                  | $                                                   | (39,457  | )          |         | $      | (21,772    | )       |         | $            | 4,460   |         |              | $ | 17,312 |         |   | $      | (39,457  | )     
|                                             | Adjustments to reconcile net income (loss) to net cash provided
    by (used in) operating activities: |                                                  |                                                     |          |            |         |        |            |         |         |              |         |         |              |   |        |         |   |        |          |       
|                                             |                                                                                                        | Depreciation and amortization                    |                                                     |          |           |         |        |            | 46,354  |         |              |         | 1,414   |              |   |        |        |   |        |          | 47,768 |        
|                                             |                                                                                                        | Asset impairment charge                          |                                                     |          |           |         |        |            | 5,425   |         |              |         |        |              |   |        |        |   |        |          | 5,425  |        
|                                             |                                                                                                        | Deferred income taxes                            |                                                     |          |           |         |        |            | 18,417  |         |              |         | (20,205 | )            |   |        |        |   |        |          | (1,788 | )      
|                                             |                                                                                                        | Minority interest                                |                                                     |          |           |         |        |            |        |         |              |         | (545    | )            |   |        |        |   |        |          | (545   | )      
|                                             |                                                                                                        | Equity in net (income) loss of subsidiaries      |                                                     |          | 21,772     |         |        |            | (4,460  | )       |              |         |        |              |   |        | (17,312 | ) |        |          |       |        
|                                             |                                                                                                        | Changes in operating assets and liabilities, net |                                                     |          | (11,212    | )       |        |            | (20,348 | )       |              |         | 29,325  |              |   |        |        |   |        |          | (2,235 | )      
|                                             |                                                                                                        |                                                  |                                                     |          |            |         |        |            |         |         |              |         |         |              |  
|                                             |                                                                                                        |                                                  | Net cash provided by (used in) operating activities |          |            | (28,897 | )      |            |         | 23,616  |              |         |         | 14,449       |   |        |         |  |        |          |        | 9,168   |  
|                                             |                                                                                                        |                                                  |                                                     |          |            |         |        |            |         |         |              |         |         |              |  
|Cash flows for investing activities:         |                                                                                                        |                                                  |                                                     |          |            |         |        |            |         |         |              |         |         |              |   |        |         |   |        |         
|                                             | Purchases of property and equipment                                                                    |                                                  |                                                     |         |            |         |        | (36,786    | )       |         |              | (1,029  | )       |              |   |       |         |   |        | (37,815  | )     
|                                             | Acquisition of minority interests in affiliates                                                        |                                                  |                                                     |         |            |         |        | (6,000     | )       |         |              |        |         |              |   |       |         |   |        | (6,000   | )     
|                                             |                                                                                                        |                                                  |                                                     |          |            |         |        |            |         |         |              |         |         |              |  
|                                             |                                                                                                        |                                                  | Net cash used in investing activities               |          |            |        |        |            |         | (42,786 | )            |         |         | (1,029       | ) |        |         |  |        |          |        | (43,815 | )
|                                             |                                                                                                        |                                                  |                                                     |          |            |         |        |            |         |         |              |         |         |              |  
|Cash flows from financing activities:        |                                                                                                        |                                                  |                                                     |          |            |         |        |            |         |         |              |         |         |              |   |        |         |   |        |         
|                                             | Distribution to General Electric Company in connection with
    recapitalization                       |                                                  |                                                     | (350,000 | )          |         |        |           |         |         |              |        |         |              |   |       |         |   |        | (350,000 | )     
|                                             | Net contributions from General Electric Company and affiliates                                         |                                                  |                                                     |         |            |         |        | 41,006     |         |         |              | 26,933  |         |              |   |       |         |   |        | 67,939   |       
|                                             | Advance (to) from subsidiaries                                                                         |                                                  |                                                     | (19,044  | )          |         |        | 10,435     |         |         |              | 8,609   |         |              |   |       |         |   |        |         |       
|                                             | Repayment of short-term borrowings, net                                                                |                                                  |                                                     |         |            |         |        |           |         |         |              | (43,922 | )       |              |   |       |         |   |        | (43,922  | )     
|                                             | Proceeds from issuance of long-term debt                                                               |                                                  |                                                     | 410,000  |            |         |        |           |         |         |              |        |         |              |   |       |         |   |        | 410,000  |       
|                                             | Payment of long-term debt                                                                              |                                                  |                                                     | (438     | )          |         |        |           |         |         |              |        |         |              |   |       |         |   |        | (438     | )     
|                                             | Payment of capital lease obligation                                                                    |                                                  |                                                     |         |            |         |        | (18,464    | )       |         |              |        |         |              |   |       |         |   |        | (18,464  | )     
|                                             | Payment of financing costs                                                                             |                                                  |                                                     | (11,621  | )          |         |        |           |         |         |              |        |         |              |   |       |         |   |        | (11,621  | )     
|                                             | Capital contribution from General Electric Company                                                     |                                                  |                                                     |         |            |         |        | 3,040      |         |         |              |        |         |              |   |       |         |   |        | 3,040    |       
|                                             |                                                                                                        |                                                  |                                                     |          |            |         |        |            |         |         |              |         |         |              |  
|                                             |                                                                                                        |                                                  | Net cash provided by (used in) financing activities |          |            | 28,897  |        |            |         | 36,017  |              |         |         | (8,380       | ) |        |         |  |        |          |        | 56,534  |  
|                                             |                                                                                                        |                                                  |                                                     |          |            |         |        |            |         |         |              |         |         |              |  
|Effect of exchange rate changes on cash      |                                                                                                        |                                                  |                                                    |          |            |         |       |            |         |         | 813          |         |         |              |  |        |         |   | 813    |         
|                                             |                                                                                                        |                                                  |                                                     |          |            |         |        |            |         |         |              |         |         |              |  
|                                             |                                                                                                        |                                                  | Increase in cash and cash equivalents               |          |            |        |        |            |         | 16,847  |              |         |         | 5,853        |   |        |         |  |        |          |        | 22,700  |  
|Cash and cash equivalents, beginning of year |                                                                                                        |                                                  |                                                    |          |            |         | 5,093  |            |         |         | 9,540        |         |         |              |  |        |         |   | 14,633 |         
|                                             |                                                                                                        |                                                  |                                                     |          |            |         |        |            |         |         |              |         |         |              |  
|Cash and cash equivalents, end of year       |                                                                                                        | $                                                |                                                    |          |            | $       | 21,940 |            |         | $       | 15,393       |         |         | $            |  |        |         | $ | 37,333 |         
|                                             |                                                                                                        |                                                  |                                                     |          |            |         |        |            |         |         |              |         |         |              |  

79



---



##### 



GXS CORPORATION AND SUBSIDIARIES


Consolidating Statement of Cash Flows


Year ended December 31, 2003


|                                             |                                                                                              |                                                            |                                                  |          |            |        |        |            |         |         |              |        |         |              |   |         |          |   |        |          |         |         |  
|-------------------------------------------- | -------------------------------------------------------------------------------------------- | ---------------------------------------------------------- | ------------------------------------------------ | -------- | ---------- | ------ | ------ | ---------- | ------- | ------- | ------------ | ------ | ------- | ------------ | - | ------- | -------- | - | ------ | -------- | ------- | ------- | -
|                                             |                                                                                              |                                                            |                                                  |          |            | Non-   |        |            |         |         |             
|                                             |                                                                                              | Parent                                                     |                                                  |          | Guarantors |        |        | Guarantors |         |         | Eliminations |        |         | Consolidated |  
|                                             |                                                                                              |                                                            |                                                  |          |            |        |        |            |         |         |              |        |         |              |  
|                                             |                                                                                              | (In thousands)                                             |                                                 
|Cash flows from operating activities:        |                                                                                              |                                                            |                                                  |          |            |        |        |            |         |         |              |        |         |              |   |         |          |   |        |         
|                                             | Net income (loss)                                                                            |                                                            | $                                                | (303,277 | )          |        | $      | (246,923   | )       |         | $            | 8,538  |         |              | $ | 238,385 |          |   | $      | (303,277 | )      
|                                             | Adjustments to reconcile net income (loss) to net cash provided
    by operating activities: |                                                            |                                                  |          |            |        |        |            |         |         |              |        |         |              |   |         |          |   |        |          |        
|                                             |                                                                                              | Depreciation and amortization                              |                                                  |          |           |        |        |            | 44,564  |         |              |        | 2,782   |              |   |         |         |   |        |          | 47,346  |        
|                                             |                                                                                              | Asset impairment charges                                   |                                                  |          |           |        |        |            | 6,500   |         |              |        |        |              |   |         |         |   |        |          | 6,500   |        
|                                             |                                                                                              | Deferred income taxes                                      |                                                  |          | 257,938    |        |        |            | (4,013  | )       |              |        | 9,497   |              |   |         |         |   |        |          | 263,422 |        
|                                             |                                                                                              | Gain on sale of assets                                     |                                                  |          |           |        |        |            | (700    | )       |              |        |        |              |   |         |         |   |        |          | (700    | )      
|                                             |                                                                                              | Write-off of deferred financing costs                      |                                                  |          | 5,548      |        |        |            |        |         |              |        |        |              |   |         |         |   |        |          | 5,548   |        
|                                             |                                                                                              | Amortization of deferred financing costs and debt discount |                                                  |          | 3,558      |        |        |            |        |         |              |        |        |              |   |         |         |   |        |          | 3,558   |        
|                                             |                                                                                              | Minority interest                                          |                                                  |          |           |        |        |            |        |         |              |        | (507    | )            |   |         |         |   |        |          | (507    | )      
|                                             |                                                                                              | Equity in net (income) loss of subsidiaries                |                                                  |          | 246,923    |        |        |            | (8,538  | )       |              |        |        |              |   |         | (238,385 | ) |        |          |        |        
|                                             |                                                                                              | Changes in operating assets and liabilities, net           |                                                  |          | (205,666   | )      |        |            | 233,203 |         |              |        | (10,665 | )            |   |         |         |   |        |          | 16,872  |        
|                                             |                                                                                              |                                                            |                                                  |          |            |        |        |            |         |         |              |        |         |              |  
|                                             |                                                                                              |                                                            | Net cash provided by operating activities        |          |            | 5,024  |        |            |         | 24,093  |              |        |         | 9,645        |   |         |          |  |        |          |         | 38,762  |  
|                                             |                                                                                              |                                                            |                                                  |          |            |        |        |            |         |         |              |        |         |              |  
|Cash flows for investing activities:         |                                                                                              |                                                            |                                                  |          |            |        |        |            |         |         |              |        |         |              |   |         |          |   |        |         
|                                             | Purchases of property and equipment                                                          |                                                            |                                                  | (91      | )          |        |        | (27,244    | )       |         |              | (2,060 | )       |              |   |        |          |   |        | (29,395  | )      
|                                             | Proceeds from sale of assets                                                                 |                                                            |                                                  |         |            |        |        | 600        |         |         |              |       |         |              |   |        |          |   |        | 600      |        
|                                             |                                                                                              |                                                            |                                                  |          |            |        |        |            |         |         |              |        |         |              |  
|                                             |                                                                                              |                                                            | Net cash used in investing activities            |          |            | (91    | )      |            |         | (26,644 | )            |        |         | (2,060       | ) |         |          |  |        |          |         | (28,795 | )
|                                             |                                                                                              |                                                            |                                                  |          |            |        |        |            |         |         |              |        |         |              |  
|Cash flows from financing activities:        |                                                                                              |                                                            |                                                  |          |            |        |        |            |         |         |              |        |         |              |   |         |          |   |        |         
|                                             | Net contributions from General Electric Company and affiliates                               |                                                            |                                                  | 12,456   |            |        |        |           |         |         |              |       |         |              |   |        |          |   |        | 12,456   |        
|                                             | Repayment of long-term debt                                                                  |                                                            |                                                  | (174,562 | )          |        |        |           |         |         |              |       |         |              |   |        |          |   |        | (174,562 | )      
|                                             | Proceeds from long-term debt issuances                                                       |                                                            |                                                  | 169,750  |            |        |        |           |         |         |              |       |         |              |   |        |          |   |        | 169,750  |        
|                                             | Payment of financing costs                                                                   |                                                            |                                                  | (12,577  | )          |        |        |           |         |         |              |       |         |              |   |        |          |   |        | (12,577  | )      
|                                             |                                                                                              |                                                            |                                                  |          |            |        |        |            |         |         |              |        |         |              |  
|                                             |                                                                                              |                                                            | Net cash used in financing activities            |          |            | (4,933 | )      |            |         |        |              |        |         |             |   |         |          |  |        |          |         | (4,933  | )
|                                             |                                                                                              |                                                            |                                                  |          |            |        |        |            |         |         |              |        |         |              |  
|Effect of exchange rate changes on cash      |                                                                                              |                                                            |                                                 |          |            |        |       |            |         |         | 4,363        |        |         |              |  |         |          |   | 4,363  |         
|                                             |                                                                                              |                                                            |                                                  |          |            |        |        |            |         |         |              |        |         |              |  
|                                             |                                                                                              |                                                            | Increase (decrease) in cash and cash equivalents |          |            |       |        |            |         | (2,551  | )            |        |         | 11,948       |   |         |          |  |        |          |         | 9,397   |  
|Cash and cash equivalents, beginning of year |                                                                                              |                                                            |                                                 |          |            |        | 21,940 |            |         |         | 15,393       |        |         |              |  |         |          |   | 37,333 |         
|                                             |                                                                                              |                                                            |                                                  |          |            |        |        |            |         |         |              |        |         |              |  
|Cash and cash equivalents, end of year       |                                                                                              | $                                                          |                                                 |          |            | $      | 19,389 |            |         | $       | 27,341       |        |         | $            |  |         |          | $ | 46,730 |         
|                                             |                                                                                              |                                                            |                                                  |          |            |        |        |            |         |         |              |        |         |              |  

80



---



##### 



GXS CORPORATION AND SUBSIDIARIES


Consolidating Statement of Cash Flows


Year ended December 31, 2004


|                                             |                                                                                                        |                                                            |                                                     |         |            |        |        |            |         |         |              |        |         |              |   |         |          |   |        |         |        |         |  
|-------------------------------------------- | ------------------------------------------------------------------------------------------------------ | ---------------------------------------------------------- | --------------------------------------------------- | ------- | ---------- | ------ | ------ | ---------- | ------- | ------- | ------------ | ------ | ------- | ------------ | - | ------- | -------- | - | ------ | ------- | ------ | ------- | -
|                                             |                                                                                                        |                                                            |                                                     |         |            | Non-   |        |            |         |         |             
|                                             |                                                                                                        | Parent                                                     |                                                     |         | Guarantors |        |        | Guarantors |         |         | Eliminations |        |         | Consolidated |  
|                                             |                                                                                                        |                                                            |                                                     |         |            |        |        |            |         |         |              |        |         |              |  
|                                             |                                                                                                        | (In thousands)                                             |                                                    
|Cash flows from operating activities:        |                                                                                                        |                                                            |                                                     |         |            |        |        |            |         |         |              |        |         |              |   |         |          |   |        |        
|                                             | Net income (loss)                                                                                      |                                                            | $                                                   | (84,880 | )          |        | $      | (127,449   | )       |         | $            | 19,661 |         |              | $ | 107,788 |          |   | $      | (84,880 | )     
|                                             | Adjustments to reconcile net income (loss) to net cash provided
    by (used in) operating activities: |                                                            |                                                     |         |            |        |        |            |         |         |              |        |         |              |   |         |          |   |        |         |       
|                                             |                                                                                                        | Depreciation and amortization                              |                                                     |         |           |        |        |            | 49,370  |         |              |        | 2,335   |              |   |         |         |   |        |         | 51,705 |        
|                                             |                                                                                                        | Asset impairment charges                                   |                                                     |         |           |        |        |            | 6,509   |         |              |        |        |              |   |         |         |   |        |         | 6,509  |        
|                                             |                                                                                                        | Deferred income taxes                                      |                                                     |         |           |        |        |            | 100     |         |              |        | 3,264   |              |   |         |         |   |        |         | 3,364  |        
|                                             |                                                                                                        | Amortization of deferred financing costs and debt discount |                                                     |         | 4,705      |        |        |            |        |         |              |        |        |              |   |         |         |   |        |         | 4,705  |        
|                                             |                                                                                                        | Minority interest                                          |                                                     |         |           |        |        |            |        |         |              |        | (463    | )            |   |         |         |   |        |         | (463   | )      
|                                             |                                                                                                        | Equity in net (income) loss of subsidiaries                |                                                     |         | 127,449    |        |        |            | (19,661 | )       |              |        |        |              |   |         | (107,788 | ) |        |         |       |        
|                                             |                                                                                                        | Changes in operating assets and liabilities, net           |                                                     |         | (53,322    | )      |        |            | 116,219 |         |              |        | (35,801 | )            |   |         |         |   |        |         | 27,096 |        
|                                             |                                                                                                        |                                                            |                                                     |         |            |        |        |            |         |         |              |        |         |              |  
|                                             |                                                                                                        |                                                            | Net cash provided by (used in) operating activities |         |            | (6,048 | )      |            |         | 25,088  |              |        |         | (11,004      | ) |         |          |  |        |         |        | 8,036   |  
|                                             |                                                                                                        |                                                            |                                                     |         |            |        |        |            |         |         |              |        |         |              |  
|Cash flows for investing activities:         |                                                                                                        |                                                            |                                                     |         |            |        |        |            |         |         |              |        |         |              |   |         |          |   |        |        
|                                             | Purchases of property and equipment                                                                    |                                                            |                                                     |        |            |        |        | (27,231    | )       |         |              | (668   | )       |              |   |        |          |   |        | (27,899 | )     
|                                             | Purchase of HAHT, net of $4,526 cash acquired                                                          |                                                            |                                                     |        |            |        |        | (9,724     | )       |         |              |       |         |              |   |        |          |   |        | (9,724  | )     
|                                             |                                                                                                        |                                                            |                                                     |         |            |        |        |            |         |         |              |        |         |              |  
|                                             |                                                                                                        |                                                            | Net cash used in investing activities               |         |            |       |        |            |         | (36,955 | )            |        |         | (668         | ) |         |          |  |        |         |        | (37,623 | )
|                                             |                                                                                                        |                                                            |                                                     |         |            |        |        |            |         |         |              |        |         |              |  
|Cash flows from financing activities:        |                                                                                                        |                                                            |                                                     |         |            |        |        |            |         |         |              |        |         |              |   |         |          |   |        |        
|                                             | Net contributions from General Electric Company and affiliates                                         |                                                            |                                                     | 6,177   |            |        |        |           |         |         |              |       |         |              |   |        |          |   |        | 6,177   |       
|                                             | Borrowings under revolving credit facility                                                             |                                                            |                                                     | 14,100  |            |        |        |           |         |         |              |       |         |              |   |        |          |   |        | 14,100  |       
|                                             | Repayments under revolving credit facility                                                             |                                                            |                                                     | (14,100 | )          |        |        |           |         |         |              |       |         |              |   |        |          |   |        | (14,100 | )     
|                                             | Payment of financing costs                                                                             |                                                            |                                                     | (129    | )          |        |        |           |         |         |              |       |         |              |   |        |          |   |        | (129    | )     
|                                             |                                                                                                        |                                                            |                                                     |         |            |        |        |            |         |         |              |        |         |              |  
|                                             |                                                                                                        |                                                            | Net cash provided by financing activities           |         |            | 6,048  |        |            |         |        |              |        |         |             |   |         |          |  |        |         |        | 6,048   |  
|                                             |                                                                                                        |                                                            |                                                     |         |            |        |        |            |         |         |              |        |         |              |  
|Effect of exchange rate changes on cash      |                                                                                                        |                                                            |                                                    |         |            |        |       |            |         |         | 1,297        |        |         |              |  |         |          |   | 1,297  |        
|                                             |                                                                                                        |                                                            |                                                     |         |            |        |        |            |         |         |              |        |         |              |  
|                                             |                                                                                                        |                                                            | Decrease in cash and cash equivalents               |         |            |       |        |            |         | (11,867 | )            |        |         | (10,375      | ) |         |          |  |        |         |        | (22,242 | )
|Cash and cash equivalents, beginning of year |                                                                                                        |                                                            |                                                    |         |            |        | 19,389 |            |         |         | 27,341       |        |         |              |  |         |          |   | 46,730 |        
|                                             |                                                                                                        |                                                            |                                                     |         |            |        |        |            |         |         |              |        |         |              |  
|Cash and cash equivalents, end of year       |                                                                                                        | $                                                          |                                                    |         |            | $      | 7,522  |            |         | $       | 16,966       |        |         | $            |  |         |          | $ | 24,488 |        
|                                             |                                                                                                        |                                                            |                                                     |         |            |        |        |            |         |         |              |        |         |              |  

81



---



##### 



Independent Auditors Report






















82



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##### 



Global eXchange Services Limited


(Formerly GE Information Services limited)


31 December 2004


Consolidated profit and loss account


for the year ended 31 December


|                                                                                                        |  |      |    |      |      |  |        |           |  |  |           |   |  |  |         |  
|------------------------------------------------------------------------------------------------------- |  | ---- | -- | ---- | ---- |  | ------ | --------- |  |  | --------- | - |  |  | ------- | -
|                                                                                                        |  |      |    | 2004 |      |  |        |           | 
|                                                                                                        |  | Note |    |      | £000 |  |        | 2003 £000 |  |  | 2002 £000 |  
|                                                                                                        |  |      |    |      |      |  |        |           |  |  |           |  
|Turnover                                                                                                |  |      | 3  |      |      |  | 29,251 |           |  |  | 32,852    |   |  |  | 37,475  |  
|Cost of sales                                                                                           |  |      |    |      |      |  | (6,589 | )         |  |  | (8,816    | ) |  |  | (10,665 | )
|                                                                                                        |  |      |    |      |      |  |        |           |  |  |           |  
|Gross profit                                                                                            |  |      |    |      |      |  | 22,662 |           |  |  | 24,036    |   |  |  | 26,810  |  
|Administrative expenses                                                                                 |  |      |    |      |      |  | (9,905 | )         |  |  | (15,571   | ) |  |  | (15,011 | )
|Other operating income                                                                                  |  |      |    |      |      |  | 430    |           |  |  | 642       |   |  |  | 691     |  
|                                                                                                        |  |      |    |      |      |  |        |           |  |  |           |  
|Operating profit                                                                                        |  |      |    |      |      |  | 13,187 |           |  |  | 9,107     |   |  |  | 12,490  |  
|Exceptional charge                                                                                      |  |      | 8  |      |      |  |       |           |  |  | (751      | ) |  |  |        |  
|Interest receivable and similar income                                                                  |  |      | 9  |      |      |  | 2,075  |           |  |  | 1,430     |   |  |  | 768     |  
|Interest payable and similar charges                                                                    |  |      | 10 |      |      |  |       |           |  |  |          |   |  |  |        |  
|                                                                                                        |  |      |    |      |      |  |        |           |  |  |           |  
|Profit on ordinary activities before taxation                                                           |  |      | 4  |      |      |  | 15,262 |           |  |  | 9,786     |   |  |  | 13,258  |  
|Tax on profit on ordinary activities                                                                    |  |      | 11 |      |      |  | (4,649 | )         |  |  | (2,944    | ) |  |  | (4,374  | )
|                                                                                                        |  |      |    |      |      |  |        |           |  |  |           |  
|Profit on ordinary activities after taxation                                                            |  |      |    |      |      |  | 10,613 |           |  |  | 6,842     |   |  |  | 8,884   |  
|Dividends paid and proposed on preferred shares (net of capital
    contribution of £1,212,000 in 2003) |  |      | 12 |      |      |  | (282   | )         |  |  | (999      | ) |  |  | 702     |  
|                                                                                                        |  |      |    |      |      |  |        |           |  |  |           |  
|Retained profit for the financial year                                                                  |  |      | 20 |      |      |  | 10,331 |           |  |  | 5,843     |   |  |  | 9,586   |  
|Retained profit brought forward                                                                         |  |      |    |      |      |  | 21,518 |           |  |  | 15,675    |   |  |  | 6,089   |  
|                                                                                                        |  |      |    |      |      |  |        |           |  |  |           |  
|Retained profit carried forward                                                                         |  |      | 20 |      |      |  | 31,849 |           |  |  | 21,518    |   |  |  | 15,675  |  
|                                                                                                        |  |      |    |      |      |  |        |           |  |  |           |  









83



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##### 



Global eXchange Services Limited


(Formerly GE Information Services limited)


31 December 2004


Consolidated balance sheet


at 31 December


|                                                      |            |      |    |    |           |      |         |      |      |  |        |        |  |      |        |   |  |  |        |        | 
|----------------------------------------------------- | ---------- | ---- | -- | -- | --------- | ---- | ------- | ---- | ---- |  | ------ | ------ |  | ---- | ------ | - |  |  | ------ | ------ | 
|                                                      |            |      |    |    |           | 2004 |         |      | 2003 |  |        | 2003   | 
|                                                      |            | Note |    |    | 2004 £000 |      |         | £000 |      |  | £000   |        |  | £000 |       
|                                                      |            |      |    |    |           |      |         |      |      |  |        |        |  |      |       
|Fixed assets                                          |            |      |    |    |           |      |         |      |      |  |        |        |  |      |        |   |  |  |        |       
|Intangible assets                                     |            |      | 13 |    |           |      |         |      |      |  | 1      |        |  |      |        |   |  |  | 355    |       
|Tangible assets                                       |            |      | 14 |    |           |      |         |      |      |  | 274    |        |  |      |        |   |  |  | 703    |       
|                                                      |            |      |    |    |           |      |         |      |      |  |        |        |  |      |       
|                                                      |            |      |    |    |           |      |         |      |      |  | 275    |        |  |      |        |   |  |  | 1,058  |       
|Current assets                                        |            |      |    |    |           |      |         |      |      |  |        |        |  |      |        |   |  |  |        |       
|Debtors: amounts falling due within one year          |            |      | 15 |    |           |      | 13,911  |      |      |  |        |        |  |      | 14,643 |   |  |  |        |       
|Debtors: amounts falling due after more than one year |            |      | 15 |    |           |      | 49,833  |      |      |  |        |        |  |      | 34,090 |   |  |  |        |       
|Cash at bank and in hand                              |            |      |    |    |           |      | 1,639   |      |      |  |        |        |  |      | 3,230  |   |  |  |        |       
|                                                      |            |      |    |    |           |      |         |      |      |  |        |        |  |      |       
|                                                      |            |      |    |    |           |      | 65,383  |      |      |  |        |        |  |      | 51,963 |   |  |  |        |       
|Creditors:amounts falling due within one year         |            |      | 16 |    |           |      | (11,694 | )    |      |  |        |        |  |      | (9,649 | ) |  |  |        |       
|                                                      |            |      |    |    |           |      |         |      |      |  |        |        |  |      |       
|Net current assets                                    |            |      |    |    |           |      |         |      |      |  | 53,689 |        |  |      |        |   |  |  | 42,314 |       
|                                                      |            |      |    |    |           |      |         |      |      |  |        |        |  |      |       
|Total assets less current liabilities                 |            |      |    |    |           |      |         |      |      |  | 53,964 |        |  |      |        |   |  |  | 43,372 |       
|Provisions for liabilities and charges                |            |      | 17 |    |           |      |         |      |      |  | (1,115 | )      |  |      |        |   |  |  | (854   | )     
|                                                      |            |      |    |    |           |      |         |      |      |  |        |        |  |      |       
|Net assets                                            |            |      |    |    |           |      |         |      |      |  | 52,849 |        |  |      |        |   |  |  | 42,518 |       
|                                                      |            |      |    |    |           |      |         |      |      |  |        |        |  |      |       
|Capital and reserves                                  |            |      |    |    |           |      |         |      |      |  |        |        |  |      |        |   |  |  |        |       
|Called up share capital                               |            |      | 19 |    |           |      |         |      |      |  | 21,000 |        |  |      |        |   |  |  | 21,000 |       
|Profit and loss account                               |            |      |    |    |           |      |         |      |      |  | 31,849 |        |  |      |        |   |  |  | 21,518 |       
|                                                      |            |      |    |    |           |      |         |      |      |  |        |        |  |      |       
|Shareholders funds                                   |            |      |    |    |           |      |         |      |      |  |        |        |  |      |        |   |  |  |        |       
|                                                      | Equity     |      |    |    |           |      |         |      |      |  |        | 33,849 |  |      |        |   |  |  |        | 23,518 | 
|                                                      | Non-equity |      |    | 19 |           |      |         |      |      |  |        | 19,000 |  |      |        |   |  |  |        | 19,000 | 
|                                                      |            |      |    |    |           |      |         |      |      |  |        |        |  |      |       
|                                                      |            |      |    |    |           |      |         |      |      |  | 52,849 |        |  |      |        |   |  |  | 42,518 |       
|                                                      |            |      |    |    |           |      |         |      |      |  |        |        |  |      |       

84



---



##### 



Global eXchange Services Limited


(Formerly GE Information Services limited)


31 December 2004


Notes


(forming part of the financial statements)




|  |                    
|- | -------------------
|1 | Accounting policies



a)     Basis of
preparation




b)     Goodwill




c)     Other intangible fixed
assets and amortisation




d)     Fixed assets and
depreciation




i)     Plant and machinery




|                    |  |  |     | 
|------------------- |  |  | --- | 
|Year of acquisition |  |  | 7%  | 
|First year          |  |  | 25% | 
|Second year         |  |  | 22% | 
|Third year          |  |  | 18% | 
|Fourth year         |  |  | 16% | 
|Fifth year          |  |  | 12% | 



ii)     Land and buildings






e)     Cash flow statement




85



---



##### 



Global eXchange Services Limited


Notes  (Continued)




f)     Transactions with related
parties




g)     Foreign currencies




h)     Leases






i)     Post-retirement
benefits






j)     Reclassifications




k)     Taxation






86



---



##### 



Global eXchange Services Limited


Notes  (Continued)


l)     Turnover




Transaction Processing


Software Licensing 


Professional Services and Software
Maintenance




Royalty Income


m)     US management
charges




n)     Basis of
consolidation






|  |                                                                                                    
|- | ---------------------------------------------------------------------------------------------------
|2 | Ultimate parent company and parent undertaking of larger
    group of which the company is a member



87



---



##### 



Global eXchange Services Limited


Notes  (Continued)








|  |                                                                
|- | ---------------------------------------------------------------
|3 | Analysis of turnover on ordinary activities before
    taxation

|                                  |  |      |        |  |      |  |        |      |  |  |        | 
|--------------------------------- |  | ---- | ------ |  | ---- |  | ------ | ---- |  |  | ------ | 
|                                  |  | 2004 |        |  | 2003 |  |        | 2002 | 
|                                  |  | £000 |        |  | £000 |  |        | £000 | 
|                                  |  |      |        |  |      |  |        |      | 
|By geographical market            |  |      |        |  |      |  |        |      |  |  |        | 
|United Kingdom  to third parties |  |      | 28,075 |  |      |  | 31,425 |      |  |  | 31,564 | 
|Rest of Europe  to third parties |  |      | 281    |  |      |  | 586    |      |  |  | 565    | 
|Other  to third parties          |  |      | 403    |  |      |  | 131    |      |  |  |       | 
|Other  to group undertakings     |  |      | 492    |  |      |  | 710    |      |  |  | 5,346  | 
|                                  |  |      |        |  |      |  |        |      | 
|                                  |  |      | 29,251 |  |      |  | 32,852 |      |  |  | 37,475 | 
|                                  |  |      |        |  |      |  |        |      | 



|  |                                              
|- | ---------------------------------------------
|4 | Profit on ordinary activities before taxation

|                                                                                        |                               |      |     |     |      |  |      |       |  |  |     |       | 
|--------------------------------------------------------------------------------------- | ----------------------------- | ---- | --- | --- | ---- |  | ---- | ----- |  |  | --- | ----- | 
|                                                                                        |                               | 2004 |     |     | 2003 |  |      | 2002  | 
|                                                                                        |                               | £000 |     |     | £000 |  |      | £000  | 
|                                                                                        |                               |      |     |     |      |  |      |       | 
|Profit on ordinary activities before taxation is stated after
    charging/(crediting): |                               |      |     |     |      |  |      |       |  |  |     |      
|Auditors remuneration:                                                                 |                               |      |     |     |      |  |      |       |  |  |     |      
|                                                                                        |  audit                       |      |     | 104 |      |  |      | 148   |  |  |     | 35    | 
|                                                                                        |  other services              |      |     | 61  |      |  |      | 176   |  |  |     | 69    | 
|Depreciation and amounts written off:                                                   |                               |      |     |     |      |  |      |       |  |  |     |      
|                                                                                        |  owned tangible fixed assets |      |     | 212 |      |  |      | 310   |  |  |     | 448   | 
|                                                                                        |  goodwill                    |      |     |    |      |  |      | 1,363 |  |  |     | 1,486 | 
|                                                                                        |  other intangible assets     |      |     | 167 |      |  |      | 249   |  |  |     | 293   | 
|Loss on sale of tangible fixed assets                                                   |                               |      | 319 |     |      |  | 1    |       |  |  | 52  |      
|Foreign exchange losses/(gains)                                                         |                               |      | 567 |     |      |  | (225 | )     |  |  | 172 |      
|Operating lease rentals:                                                                |                               |      |     |     |      |  |      |       |  |  |     |      
|                                                                                        |  plant and machinery         |      |     | 31  |      |  |      | 76    |  |  |     | 73    | 
|                                                                                        |  land and buildings          |      |     |    |      |  |      | 1,038 |  |  |     | 1,062 | 
|                                                                                        |                               |      |     |     |      |  |      |       | 

88



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Global eXchange Services Limited


Notes  (Continued)




|  |                          
|- | -------------------------
|5 | Remuneration of directors

|                                         |  |      |     |  |      |  |     |      |  |  |     | 
|---------------------------------------- |  | ---- | --- |  | ---- |  | --- | ---- |  |  | --- | 
|                                         |  | 2004 |     |  | 2003 |  |     | 2002 | 
|                                         |  | £000 |     |  | £000 |  |     | £000 | 
|                                         |  |      |     |  |      |  |     |      | 
|Directors emoluments                    |  |      | 476 |  |      |  | 644 |      |  |  | 638 | 
|                                         |  |      |     |  |      |  |     |      | 
|                                         |  |      | 476 |  |      |  | 644 |      |  |  | 638 | 
|Company contributions to pension schemes |  |      | 30  |  |      |  | 39  |      |  |  | 21  | 
|Compensation for loss of office          |  |      |    |  |      |  |    |      |  |  | 192 | 
|                                         |  |      |     |  |      |  |     |      | 
|                                         |  |      | 506 |  |      |  | 683 |      |  |  | 851 | 
|                                         |  |      |     |  |      |  |     |      | 

(2003: £290,000; 2002: £428,000).


|                                                                                 |  |                     |   |  |      |  |   |      |  |  |   | 
|-------------------------------------------------------------------------------- |  | ------------------- | - |  | ---- |  | - | ---- |  |  | - | 
|                                                                                 |  | Number of Directors |  
|                                                                                 |  |                     |  
|                                                                                 |  | 2004                |   |  | 2003 |  |   | 2002 | 
|                                                                                 |  |                     |   |  |      |  |   |      | 
|Retirement benefits are accruing to the following number of
    directors under: |  |                     |   |  |      |  |   |      |  |  |   | 
|Money purchase schemes                                                           |  |                     | 3 |  |      |  | 4 |      |  |  |  | 
|Defined benefit schemes                                                          |  |                     |  |  |      |  |  |      |  |  | 4 | 



|  |                        
|- | -----------------------
|6 | Staff numbers and costs



|                        |  |                     |     |  |      |  |     |      |  |  |     | 
|----------------------- |  | ------------------- | --- |  | ---- |  | --- | ---- |  |  | --- | 
|                        |  | Number of Employees |    
|                        |  |                     |    
|                        |  | 2004                |     |  | 2003 |  |     | 2002 | 
|                        |  |                     |     |  |      |  |     |      | 
|Sales and sales support |  |                     | 76  |  |      |  | 86  |      |  |  | 46  | 
|Technical development   |  |                     | 14  |  |      |  | 21  |      |  |  | 49  | 
|Administration          |  |                     | 23  |  |      |  | 28  |      |  |  | 44  | 
|                        |  |                     |     |  |      |  |     |      | 
|                        |  |                     | 113 |  |      |  | 135 |      |  |  | 139 | 
|                        |  |                     |     |  |      |  |     |      | 



|                                                                                      |  |      |       |  |      |  |       |      |  |  |       | 
|------------------------------------------------------------------------------------- |  | ---- | ----- |  | ---- |  | ----- | ---- |  |  | ----- | 
|                                                                                      |  | 2004 |       |  | 2003 |  |       | 2002 | 
|                                                                                      |  | £000 |       |  | £000 |  |       | £000 | 
|                                                                                      |  |      |       |  |      |  |       |      | 
|Wages and salaries                                                                    |  |      | 6,065 |  |      |  | 6,457 |      |  |  | 7,925 | 
|Social security costs                                                                 |  |      | 661   |  |      |  | 687   |      |  |  | 1,102 | 
|Other pension costs                                                                   |  |      | 593   |  |      |  | 713   |      |  |  | 431   | 
|Additional pension payment to GE Pension Schemes (see
    note 8, Exceptional charge) |  |      |      |  |      |  | 751   |      |  |  |      | 
|                                                                                      |  |      |       |  |      |  |       |      | 
|                                                                                      |  |      | 7,319 |  |      |  | 8,608 |      |  |  | 9,458 | 
|                                                                                      |  |      |       |  |      |  |       |      | 

89



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Global eXchange Services Limited


Notes  (Continued)




|  |                 
|- | ----------------
|7 | Redundancy Costs

|                     |  |      |     |  |      |  |     |      |  |  |       | 
|-------------------- |  | ---- | --- |  | ---- |  | --- | ---- |  |  | ----- | 
|                     |  | 2004 |     |  | 2003 |  |     | 2002 | 
|                     |  | £000 |     |  | £000 |  |     | £000 | 
|                     |  |      |     |  |      |  |     |      | 
|Paid during the year |  |      | 656 |  |      |  | 310 |      |  |  | 1,307 | 
|Accrued              |  |      |    |  |      |  |    |      |  |  | 79    | 
|                     |  |      |     |  |      |  |     |      | 
|                     |  |      | 656 |  |      |  | 310 |      |  |  | 1,386 | 
|                     |  |      |     |  |      |  |     |      | 



|  |                    
|- | -------------------
|8 | Exceptional Charges

|                |  |      |   |  |      |  |     |      |  |  |   | 
|--------------- |  | ---- | - |  | ---- |  | --- | ---- |  |  | - | 
|                |  | 2004 |   |  | 2003 |  |     | 2002 | 
|                |  | £000 |   |  | £000 |  |     | £000 | 
|                |  |      |   |  |      |  |     |      | 
|Pensions Charge |  |      |  |  |      |  | 751 |      |  |  |  | 
|                |  |      |   |  |      |  |     |      | 









|  |                                       
|- | --------------------------------------
|9 | Interest receivable and similar income

|                                   |  |      |       |  |      |  |       |      |  |  |     | 
|---------------------------------- |  | ---- | ----- |  | ---- |  | ----- | ---- |  |  | --- | 
|                                   |  | 2004 |       |  | 2003 |  |       | 2002 | 
|                                   |  | £000 |       |  | £000 |  |       | £000 | 
|                                   |  |      |       |  |      |  |       |      | 
|Receivable from group undertakings |  |      | 2,032 |  |      |  | 1,391 |      |  |  | 539 | 
|Other interest receivable          |  |      | 43    |  |      |  | 39    |      |  |  | 229 | 
|                                   |  |      |       |  |      |  |       |      | 
|                                   |  |      | 2,075 |  |      |  | 1,430 |      |  |  | 768 | 
|                                   |  |      |       |  |      |  |       |      | 



|   |                                     
|-- | ------------------------------------
|10 | Interest payable and similar charges

|                       |  |      |   |  |      |  |   |      |  |  |   | 
|---------------------- |  | ---- | - |  | ---- |  | - | ---- |  |  | - | 
|                       |  | 2004 |   |  | 2003 |  |   | 2002 | 
|                       |  | £000 |   |  | £000 |  |   | £000 | 
|                       |  |      |   |  |      |  |   |      | 
|Other interest payable |  |      |   |  |      |  |  |      |  |  |  | 
|                       |  |      |   |  |      |  |   |      | 
|                       |  |      |  |  |      |  |  |      |  |  |  | 
|                       |  |      |   |  |      |  |   |      | 

90



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Global eXchange Services Limited


Notes  (Continued)




|   |         
|-- | --------
|11 | Taxation



|                                           |  |      |       |   |      |  |       |      |  |  |       |      |  |      |       |   |      |  |       |  |  |  |       | 
|------------------------------------------ |  | ---- | ----- | - | ---- |  | ----- | ---- |  |  | ----- | ---- |  | ---- | ----- | - | ---- |  | ----- |  |  |  | ----- | 
|                                           |  | 2004 |       |   |      |  | 2003  |      |  |  |       | 2002 |  |      |      
|                                           |  | £000 |       |   | £000 |  |       | £000 |  |  | £000  |      |  | £000 |       |   | £000 | 
|                                           |  |      |       |   |      |  |       |      |  |  |       |      |  |      |       |   |      | 
|UK corporation tax                         |  |      |       |   |      |  |       |      |  |  |       |      |  |      |       |   |      |  |       |  |  |  |       | 
|Current tax on income for the period       |  |      | 4,442 |   |      |  |       |      |  |  | 2,951 |      |  |      |       |   |      |  | 4,295 |  |  |  |       | 
|Adjustments in respect of prior periods    |  |      | 95    |   |      |  |       |      |  |  |      |      |  |      |       |   |      |  |      |  |  |  |       | 
|                                           |  |      |       |   |      |  |       |      |  |  |       |      |  |      |       |   |      | 
|                                           |  |      |       |   |      |  | 4,537 |      |  |  |       |      |  |      | 2,951 |   |      |  |       |  |  |  | 4,295 | 
|                                           |  |      |       |   |      |  |       |      |  |  |       |      |  |      |       |   |      | 
|Total current tax                          |  |      |       |   |      |  | 4,537 |      |  |  |       |      |  |      | 2,951 |   |      |  |       |  |  |  | 4,295 | 
|Deferred tax (see note 18)                 |  |      |       |   |      |  |       |      |  |  |       |      |  |      |       |   |      |  |       |  |  |  |       | 
|Origination/reversal of timing differences |  |      | 246   |   |      |  |       |      |  |  | (7    | )    |  |      |       |   |      |  | 79    |  |  |  |       | 
|Adjustments in respect of prior periods    |  |      | (134  | ) |      |  |       |      |  |  |      |      |  |      |       |   |      |  |      |  |  |  |       | 
|                                           |  |      |       |   |      |  |       |      |  |  |       |      |  |      |       |   |      | 
|Total deferred tax                         |  |      |       |   |      |  | 112   |      |  |  |       |      |  |      | (7    | ) |      |  |       |  |  |  | 79    | 
|                                           |  |      |       |   |      |  |       |      |  |  |       |      |  |      |       |   |      | 
|Tax on profit on ordinary activities       |  |      |       |   |      |  | 4,649 |      |  |  |       |      |  |      | 2,944 |   |      |  |       |  |  |  | 4,374 | 
|                                           |  |      |       |   |      |  |       |      |  |  |       |      |  |      |       |   |      | 

Factors affecting the tax charge for the current period




|                                                         |  |      |        |   |      |  |       |      |  |  |        |  
|-------------------------------------------------------- |  | ---- | ------ | - | ---- |  | ----- | ---- |  |  | ------ | -
|                                                         |  | 2004 |        |   | 2003 |  |       | 2002 | 
|                                                         |  | £000 |        |   | £000 |  |       | £000 | 
|                                                         |  |      |        |   |      |  |       |      | 
|Current tax reconciliation                               |  |      |        |   |      |  |       |      |  |  |        |  
|Profit on ordinary activities before tax                 |  |      | 15,262 |   |      |  | 9,786 |      |  |  | 13,258 |  
|                                                         |  |      |        |   |      |  |       |      | 
|Current tax at 30%                                       |  |      | 4,579  |   |      |  | 2,936 |      |  |  | 3,977  |  
|Effects of:                                              |  |      |        |   |      |  |       |      |  |  |        |  
|Expenses not deductible for tax purposes                 |  |      | 109    |   |      |  | 11    |      |  |  | 20     |  
|Timing differences                                       |  |      | (201   | ) |      |  | 56    |      |  |  | (71    | )
|Depreciation for period in excess of capital allowances  |  |      | (45    | ) |      |  | 384   |      |  |  | 438    |  
|Non-taxable income                                       |  |      |       |   |      |  |      |      |  |  | (69    | )
|Utilisation of tax losses from other group companies     |  |      |       |   |      |  | (436  | )    |  |  |       |  
|Adjustments to tax charge in respect of previous periods |  |      | 95     |   |      |  |      |      |  |  |       |  
|                                                         |  |      |        |   |      |  |       |      | 
|Total current tax charge (see above)                     |  |      | 4,537  |   |      |  | 2,951 |      |  |  | 4,295  |  
|                                                         |  |      |        |   |      |  |       |      | 



91



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Global eXchange Services Limited


Notes  (Continued)




|   |                                   
|-- | ----------------------------------
|12 | Dividends and other appropriations

|                   |                           |      |     |     |      |  |     |      |  |  |      |        |  
|------------------ | ------------------------- | ---- | --- | --- | ---- |  | --- | ---- |  |  | ---- | ------ | -
|                   |                           | 2004 |     |     | 2003 |  |     | 2002 | 
|                   |                           | £000 |     |     | £000 |  |     | £000 | 
|                   |                           |      |     |     |      |  |     |      | 
|Non-equity shares: |                           |      |     |     |      |  |     |      |  |  |      |       
|                   | Final dividend proposed   |      |     | 282 |      |  |     | 999  |  |  |      | 510    |  
|                   | Capital contribution made |      |     |    |      |  |     |     |  |  |      | (1,212 | )
|                   |                           |      |     |     |      |  |     |      | 
|                   |                           |      | 282 |     |      |  | 999 |      |  |  | (702 | )     
|                   |                           |      |     |     |      |  |     |      | 

(2003: £999,000; 2002: £510,000)






|   |                        
|-- | -----------------------
|13 | Intangible fixed assets

|                     |  |            |       |   |          |  |        |       |  |  |        |  
|-------------------- |  | ---------- | ----- | - | -------- |  | ------ | ----- |  |  | ------ | -
|                     |  | Other      |       |   |          |  |       
|                     |  | Intangible |       |   |          |  |       
|                     |  | Assets     |       |   | Goodwill |  |        | Total | 
|                     |  | £000       |       |   | £000     |  |        | £000  | 
|                     |  |            |       |   |          |  |        |       | 
|Cost                 |  |            |       |   |          |  |        |       |  |  |        |  
|At beginning of year |  |            | 1,346 |   |          |  | 16,055 |       |  |  | 17,401 |  
|Additions            |  |            | 1     |   |          |  |       |       |  |  | 1      |  
|Retirements          |  |            | (434  | ) |          |  |       |       |  |  | (434   | )
|                     |  |            |       |   |          |  |        |       | 
|At end of year       |  |            | 913   |   |          |  | 16,055 |       |  |  | 16,968 |  
|                     |  |            |       |   |          |  |        |       | 
|Amortisation         |  |            |       |   |          |  |        |       |  |  |        |  
|At beginning of year |  |            | 991   |   |          |  | 16,055 |       |  |  | 17,046 |  
|Charged in year      |  |            | 167   |   |          |  |        |       |  |  | 167    |  
|Retirements          |  |            | (246  | ) |          |  |        |       |  |  | (246   | )
|                     |  |            |       |   |          |  |        |       | 
|At end of year       |  |            | 912   |   |          |  | 16,055 |       |  |  | 16,967 |  
|                     |  |            |       |   |          |  |        |       | 
|Net book value       |  |            |       |   |          |  |        |       |  |  |        |  
|At 31 December 2004  |  |            | 1     |   |          |  |       |       |  |  | 1      |  
|                     |  |            |       |   |          |  |        |       | 
|At 31 December 2003  |  |            | 355   |   |          |  |       |       |  |  | 355    |  
|                     |  |            |       |   |          |  |        |       | 

92



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Global eXchange Services Limited


Notes  (Continued)




|   |                      
|-- | ---------------------
|14 | Tangible fixed assets

|                     |  |                 |        |   |           |  |       |       |  |  |        |  
|-------------------- |  | --------------- | ------ | - | --------- |  | ----- | ----- |  |  | ------ | -
|                     |  | Short Leasehold |        |   | Plant and |  |       |      
|                     |  | Land and        |        |   | Machinery |  |       | Total | 
|                     |  | Buildings £000  |        |   | £000      |  |       | £000  | 
|                     |  |                 |        |   |           |  |       |       | 
|Cost                 |  |                 |        |   |           |  |       |       |  |  |        |  
|At beginning of year |  |                 | 1,426  |   |           |  | 1,826 |       |  |  | 3,252  |  
|Additions            |  |                 | 34     |   |           |  | 68    |       |  |  | 102    |  
|Disposals            |  |                 | (1,114 | ) |           |  | (29   | )     |  |  | (1,143 | )
|                     |  |                 |        |   |           |  |       |       | 
|At end of year       |  |                 | 346    |   |           |  | 1,865 |       |  |  | 2,211  |  
|                     |  |                 |        |   |           |  |       |       | 
|Depreciation         |  |                 |        |   |           |  |       |       |  |  |        |  
|At beginning of year |  |                 | 998    |   |           |  | 1,551 |       |  |  | 2,549  |  
|Charge for year      |  |                 | 43     |   |           |  | 169   |       |  |  | 212    |  
|On disposals         |  |                 | (809   | ) |           |  | (15   | )     |  |  | (824   | )
|                     |  |                 |        |   |           |  |       |       | 
|At end of year       |  |                 | 232    |   |           |  | 1,705 |       |  |  | 1,937  |  
|                     |  |                 |        |   |           |  |       |       | 
|Net book value       |  |                 |        |   |           |  |       |       |  |  |        |  
|At 31 December 2004  |  |                 | 114    |   |           |  | 160   |       |  |  | 274    |  
|                     |  |                 |        |   |           |  |       |       | 
|At 31 December 2003  |  |                 | 428    |   |           |  | 275   |       |  |  | 703    |  
|                     |  |                 |        |   |           |  |       |       | 

(2003: £nil; 2002:
£nil).




|   |        
|-- | -------
|15 | Debtors

|                                      |  |      |        |  |      |  |        | 
|------------------------------------- |  | ---- | ------ |  | ---- |  | ------ | 
|                                      |  | 2004 |        |  | 2003 | 
|                                      |  | £000 |        |  | £000 | 
|                                      |  |      |        |  |      | 
|Amounts due within one year:          |  |      |        |  |      |  |        | 
|Trade debtors                         |  |      | 8,366  |  |      |  | 6,068  | 
|Amounts owed by group undertakings    |  |      | 3,810  |  |      |  | 7,865  | 
|Corporation tax                       |  |      | 1,072  |  |      |  |       | 
|Other debtors                         |  |      |       |  |      |  | 111    | 
|Prepayments and accrued income        |  |      | 663    |  |      |  | 599    | 
|                                      |  |      |        |  |      | 
|                                      |  |      | 13,911 |  |      |  | 14,643 | 
|                                      |  |      |        |  |      | 
|Amounts due after more than one year: |  |      |        |  |      |  |        | 
|Deferred tax asset (see note 18)      |  |      | 509    |  |      |  | 622    | 
|Amounts owed by group undertakings    |  |      | 49,324 |  |      |  | 33,468 | 
|                                      |  |      |        |  |      | 
|                                      |  |      | 49,833 |  |      |  | 34,090 | 
|                                      |  |      |        |  |      | 

93



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##### 



Global eXchange Services Limited


Notes  (Continued)




|   |                                               
|-- | ----------------------------------------------
|16 | Creditors: amounts falling due within one year

|                                   |  |      |        |  |      |  |       | 
|---------------------------------- |  | ---- | ------ |  | ---- |  | ----- | 
|                                   |  | 2004 |        |  | 2003 | 
|                                   |  | £000 |        |  | £000 | 
|                                   |  |      |        |  |      | 
|Trade creditors                    |  |      | 115    |  |      |  | 103   | 
|Amounts owed to group undertakings |  |      | 5,169  |  |      |  | 5,994 | 
|Corporation tax                    |  |      |       |  |      |  | 275   | 
|Other taxes and social security    |  |      | 720    |  |      |  |      | 
|Accruals and deferred income       |  |      | 5,047  |  |      |  | 2,612 | 
|Other creditors                    |  |      | 643    |  |      |  | 665   | 
|                                   |  |      |        |  |      | 
|                                   |  |      | 11,694 |  |      |  | 9,649 | 
|                                   |  |      |        |  |      | 



|   |                                       
|-- | --------------------------------------
|17 | Provisions for liabilities and charges

|                                                  |  |                  |      |   |         |  |      |            |  |  |       |   |  |  |       |  
|------------------------------------------------- |  | ---------------- | ---- | - | ------- |  | ---- | ---------- |  |  | ----- | - |  |  | ----- | -
|                                                  |  | Dilapidations to |      |   |         |  |      |            | 
|                                                  |  | Properties as    |      |   |         |  |      |            | 
|                                                  |  | Required by      |      |   | Onerous |  |      | Other      |  |  |      
|                                                  |  | Rental           |      |   | Lease   |  |      | Provisions |  |  | Total |  
|                                                  |  | Agreements £000  |      |   | £000    |  |      | £000       |  |  | £000  |  
|                                                  |  |                  |      |   |         |  |      |            |  |  |       |  
|At beginning of year                              |  |                  | 487  |   |         |  | 295  |            |  |  | 72    |   |  |  | 854   |  
|Charge/credit to the profit and loss for the year |  |                  | (100 | ) |         |  | (115 | )          |  |  | (50   | ) |  |  | (265  | )
|Additional amounts provided                       |  |                  | 28   |   |         |  | 498  |            |  |  |      |   |  |  | 526   |  
|                                                  |  |                  |      |   |         |  |      |            |  |  |       |  
|At end of year                                    |  |                  | 415  |   |         |  | 678  |            |  |  | 22    |   |  |  | 1,115 |  
|                                                  |  |                  |      |   |         |  |      |            |  |  |       |  







|   |             
|-- | ------------
|18 | Deferred tax



|                                                                                        |  |      |     |  |      |  |     | 
|--------------------------------------------------------------------------------------- |  | ---- | --- |  | ---- |  | --- | 
|                                                                                        |  | 2004 |     |  | 2003 | 
|                                                                                        |  | £000 |     |  | £000 | 
|                                                                                        |  |      |     |  |      | 
|Difference between accumulated depreciation and amortisation and
    capital allowances |  |      | 431 |  |      |  | 447 | 
|Other timing differences                                                                |  |      | 78  |  |      |  | 175 | 
|                                                                                        |  |      |     |  |      | 
|Deferred tax asset (see note 15)                                                        |  |      | 509 |  |      |  | 622 | 
|                                                                                        |  |      |     |  |      | 

94



---



##### 



Global eXchange Services Limited


Notes  (Continued)




|   |                        
|-- | -----------------------
|19 | Called up share capital

|                                                                                               |  |           |         |  |           |  |         | 
|---------------------------------------------------------------------------------------------- |  | --------- | ------- |  | --------- |  | ------- | 
|                                                                                               |  | 2004 £000 |         |  | 2003 £000 | 
|                                                                                               |  |           |         |  |           | 
|Authorised                                                                                     |  |           |         |  |           |  |         | 
|Equity: 5,000,000 Ordinary shares of £1 each                                                   |  |           | 5,000   |  |           |  | 5,000   | 
|Non equity: 6,666,660 Floating rate cumulative redeemable
    Preference shares of £28.50 each |  |           | 190,000 |  |           |  | 190,000 | 
|                                                                                               |  |           |         |  |           | 
|                                                                                               |  |           | 195,000 |  |           |  | 195,000 | 
|                                                                                               |  |           |         |  |           | 
|Allotted, called up and fully paid                                                             |  |           |         |  |           |  |         | 
|Equity: 2,000,000 Ordinary shares of £1 each                                                   |  |           | 2,000   |  |           |  | 2,000   | 
|Non equity: 666,666 Floating rate cumulative redeemable
    preference shares of £28.50 each   |  |           | 19,000  |  |           |  | 19,000  | 
|                                                                                               |  |           |         |  |           | 
|                                                                                               |  |           | 21,000  |  |           |  | 21,000  | 
|                                                                                               |  |           |         |  |           | 







|   |                                                   
|-- | --------------------------------------------------
|20 | Reconciliation of movements in shareholders funds

|                             |  |                 |        |  |                 |  |        |               |  |  |        | 
|---------------------------- |  | --------------- | ------ |  | --------------- |  | ------ | ------------- |  |  | ------ | 
|                             |  | Called-up Share |        |  | Profit and Loss |  |        | Shareholders | 
|                             |  | Capital         |        |  | Account         |  |        | Funds         | 
|                             |  | £000            |        |  | £000            |  |        | £000          | 
|                             |  |                 |        |  |                 |  |        |               | 
|1 January 2004               |  |                 | 21,000 |  |                 |  | 21,518 |               |  |  | 42,518 | 
|Retained profit for the year |  |                 |       |  |                 |  | 10,331 |               |  |  | 10,331 | 
|                             |  |                 |        |  |                 |  |        |               | 
|31 December 2004             |  |                 | 21,000 |  |                 |  | 31,849 |               |  |  | 52,849 | 
|                             |  |                 |        |  |                 |  |        |               | 



|                                |  |        |        |  |            |  |        |       |  |  |        |  |  |            |        |  |       |  |        |  |  |  |        | 
|------------------------------- |  | ------ | ------ |  | ---------- |  | ------ | ----- |  |  | ------ |  |  | ---------- | ------ |  | ----- |  | ------ |  |  |  | ------ | 
|                                |  | 2004   |        |  | 2003       | 
|                                |  |        |        |  |            | 
|                                |  | Equity |        |  | Non-Equity |  |        | Total |  |  | Equity |  |  | Non-Equity |        |  | Total | 
|                                |  | £000   |        |  | £000       |  |        | £000  |  |  | £000   |  |  | £000       |        |  | £000  | 
|                                |  |        |        |  |            |  |        |       |  |  |        |  |  |            |        |  |       | 
|Ordinary shares of £1.00 each   |  |        | 33,849 |  |            |  |       |       |  |  | 33,849 |  |  |            | 23,518 |  |       |  |       |  |  |  | 23,518 | 
|Preferred shares of £28.50 each |  |        |       |  |            |  | 19,000 |       |  |  | 19,000 |  |  |            |       |  |       |  | 19,000 |  |  |  | 19,000 | 
|                                |  |        |        |  |            |  |        |       |  |  |        |  |  |            |        |  |       | 
|                                |  |        | 33,849 |  |            |  | 19,000 |       |  |  | 52,849 |  |  |            | 23,518 |  |       |  | 19,000 |  |  |  | 42,518 | 
|                                |  |        |        |  |            |  |        |       |  |  |        |  |  |            |        |  |       | 



|   |         
|-- | --------
|21 | Reserves

|                             |  |                  |        | 
|---------------------------- |  | ---------------- | ------ | 
|                             |  | Profit           |       
|                             |  | and Loss Account |       
|                             |  | £000             |       
|                             |  |                  |       
|1 January 2004               |  |                  | 21,518 | 
|Retained profit for the year |  |                  | 10,331 | 
|                             |  |                  |       
|31 December 2004             |  |                  | 31,849 | 
|                             |  |                  |       

95



---



##### 



Global eXchange Services Limited


Notes  (Continued)




|   |                 
|-- | ----------------
|22 | Operating leases



|                 |  |       |     |           |           |  |    |       |  |  |           |  |  |           |     |  |       |  |     |  |  |  |     | 
|---------------- |  | ----- | --- | --------- | --------- |  | -- | ----- |  |  | --------- |  |  | --------- | --- |  | ----- |  | --- |  |  |  | --- | 
|                 |  | 2004  |     |           | 2003      | 
|                 |  |       |     |           |           | 
|                 |  |       |     | Plant and |           |  |    |       |  |  | Plant and |  |  |          
|                 |  | Other |     |           | Machinery |  |    | Total |  |  | Other     |  |  | Machinery |     |  | Total | 
|                 |  | £000  |     |           | £000      |  |    | £000  |  |  | £000      |  |  | £000      |     |  | £000  | 
|                 |  |       |     |           |           |  |    |       |  |  |           |  |  |           |     |  |       | 
|Expiring within: |  |       |     |           |           |  |    |       |  |  |           |  |  |           |     |  |       |  |     |  |  |  |     | 
|1 year           |  |       |    |           |           |  | 38 |       |  |  | 38        |  |  |           | 52  |  |       |  | 11  |  |  |  | 63  | 
|2-5 years        |  |       |    |           |           |  | 32 |       |  |  | 32        |  |  |           |    |  |       |  | 89  |  |  |  | 89  | 
|Over 5 years     |  |       | 672 |           |           |  |   |       |  |  | 672       |  |  |           | 712 |  |       |  |    |  |  |  | 712 | 
|                 |  |       |     |           |           |  |    |       |  |  |           |  |  |           |     |  |       | 
|                 |  |       | 672 |           |           |  | 70 |       |  |  | 742       |  |  |           | 764 |  |       |  | 100 |  |  |  | 864 | 
|                 |  |       |     |           |           |  |    |       |  |  |           |  |  |           |     |  |       | 



|   |               
|-- | --------------
|23 | Pension scheme

a)     Defined Benefit Pension
Schemes










b     Defined Contribution Pension
Scheme


(2003:£196,000).






|   |                                                                                                              
|-- | -------------------------------------------------------------------------------------------------------------
|24 | Significant differences between United Kingdom and United
    States generally accepted accounting principles



96



---



##### 



Global eXchange Services Limited


Notes  (Continued)




a)     Goodwill


SFAS No 142 Goodwill and other
intangible assets








b)     Preference shares and
dividends


Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity










c)     Contract Termination Costs


Provisions, contingent liabilities and
assets


97



---



##### 



Global eXchange Services Limited


Notes  (Continued)


Accounting for Costs Associated
with Exit or Disposal Activities


d)     Additional capital
contributions


Pensions






Income Taxes






98



---



##### 



Global eXchange Services Limited


Notes  (Continued)


Reconciliation




Net Income


|                                     |              |              |   |                        |      |  |        |      |  |  |       |      |   |  |        |   | 
|------------------------------------ | ------------ | ------------ | - | ---------------------- | ---- |  | ------ | ---- |  |  | ----- | ---- | - |  | ------ | - | 
|                                     |              |              |   | Year Ended 31 December |     
|                                     |              |              |   |                        |     
|                                     |              | Reference in |   |                        | 2004 |  |        | 2003 |  |  | 2002  |     
|                                     |              | Note 24      |   |                        | £000 |  |        | £000 |  |  | £000  |     
|                                     |              |              |   |                        |      |  |        |      |  |  |       |     
|Net Income as reported under UK GAAP |              |              |   |                        |      |  | 10,331 |      |  |  | 5,843 |      |   |  | 9,586  |  
|Significant US GAAP adjustments      |              |              |   |                        |      |  |        |      |  |  |       |      |   |  |        |  
| Amortisation of goodwill           |              |              | a |                        |      |  |       |      |  |  | 1,363 |      |   |  | 1,486  |  
| Preference share dividends         |              |              | b |                        |      |  |       |      |  |  | 999   |      |   |  | (702   | )
| Contract termination costs         |              |              | c |                        |      |  | 90     |      |  |  |      |      |   |  |       |  
| Additional capital contribution:   |              |              | d |                        |      |  |        |      |  |  |       |      |   |  |        |  
|                                     | Pension      |              |   |                        |      |  |        |     |  |  |       | (751 | ) |  |        |  | 
|                                     | Income taxes |              |   |                        |      |  |        |     |  |  |       | (436 | ) |  |        |  | 
|Income tax effect of adjustments     |              |              |   |                        |      |  | (27    | )    |  |  |      |      |   |  |       |  
|                                     |              |              |   |                        |      |  |        |      |  |  |       |     
|Net Income under US GAAP             |              |              |   |                        |      |  | 10,394 |      |  |  | 7,018 |      |   |  | 10,370 |  
|                                     |              |              |   |                        |      |  |        |      |  |  |       |     



Shareholders Equity


|                                               |  |              |   |                   |           |  |         |           |  |  |         |  
|---------------------------------------------- |  | ------------ | - | ----------------- | --------- |  | ------- | --------- |  |  | ------- | -
|                                               |  |              |   | As at 31 December |          
|                                               |  | Reference in |   |                   |           | 
|                                               |  | Note 24      |   |                   | 2004 £000 |  |         | 2003 £000 | 
|                                               |  |              |   |                   |           |  |         |           | 
|Shareholders Equity as reported under UK GAAP |  |              |   |                   |           |  | 52,849  |           |  |  | 42,518  |  
|Significant US GAAP adjustments                |  |              |   |                   |           |  |         |           |  |  |         |  
| Amortisation of goodwill                     |  |              | A |                   |           |  | 2,849   |           |  |  | 2,849   |  
| Redeemable Preference Shares                 |  |              | B |                   |           |  | (19,000 | )         |  |  | (19,000 | )
| Contract termination costs                   |  |              | C |                   |           |  | 63      |           |  |  |        |  
|                                               |  |              |   |                   |           |  |         |           | 
|Shareholders Equity under US GAAP             |  |              |   |                   |           |  | 36,761  |           |  |  | 26,367  |  
|                                               |  |              |   |                   |           |  |         |           | 

e)     SFAS No 95
Statement of cash flows


99



---



##### 



Global eXchange Services Limited


Notes  (Continued)




Cash flow statement  US GAAP


|                                                                                      |                                                                          |      |        |        |      |  |        |           |   |  |        |         |  
|------------------------------------------------------------------------------------- | ------------------------------------------------------------------------ | ---- | ------ | ------ | ---- |  | ------ | --------- | - |  | ------ | ------- | -
|                                                                                      |                                                                          | 2004 |        |        | 2003 |  |        |          
|                                                                                      |                                                                          | £000 |        |        | £000 |  |        | 2002 £000 |  
|                                                                                      |                                                                          |      |        |        |      |  |        |           |  
|Cash flows from operating activities                                                  |                                                                          |      |        |        |      |  |        |           |   |  |        |        
|Net income (Profit after tax under US GAAP):                                          |                                                                          |      | 10,394 |        |      |  | 7,018  |           |   |  | 10,370 |        
|Adjustments to reconcile net income to net cash provided by
    operating activities: |                                                                          |      |        |        |      |  |        |           |   |  |        |        
|                                                                                      | Depreciation and amortisation                                            |      |        | 379    |      |  |        | 559       |   |  |        | 741     |  
|                                                                                      | Provision for losses on debtors                                          |      |        | (67    | )    |  |        | (65       | ) |  |        | 249     |  
|                                                                                      | Loss on disposal of fixed assets                                         |      |        | 319    |      |  |        | 1         |   |  |        | 52      |  
|Change in assets and liabilities:                                                     |                                                                          |      |        |        |      |  |        |           |   |  |        |        
|                                                                                      | (Increase)/ decrease in debtors                                          |      |        | (1,817 | )    |  |        | 869       |   |  |        | 12,683  |  
|                                                                                      | (Decrease)/ increase in creditors                                        |      |        | (2,785 | )    |  |        | 2,977     |   |  |        | (913    | )
|                                                                                      | Increase/ (decrease) in corporation tax creditor                         |      |        | 1,936  |      |  |        | 412       |   |  |        | 1,741   |  
|                                                                                      | Decrease/ (increase) in deferred tax debtor                              |      |        | 113    |      |  |        | (7        | ) |  |        | 79      |  
|                                                                                      | Increase/ (decrease) in other provisions for liabilities and
    charges |      |        | 171    |      |  |        | 381       |   |  |        | (78     | )
|                                                                                      |                                                                          |      |        |        |      |  |        |           |  
|Net cash provided by operating activities                                             |                                                                          |      | 8,643  |        |      |  | 12,145 |           |   |  | 24,924 |        
|Cash flows from investing activities:                                                 |                                                                          |      |        |        |      |  |        |           |   |  |        |        
|                                                                                      | Capital expenditure                                                      |      |        | (103   | )    |  |        | (122      | ) |  |        | (305    | )
|Cash flows from financing activities                                                  |                                                                          |      |        |        |      |  |        |           |   |  |        |        
|                                                                                      | Dividends paid                                                           |      |        | (1,082 | )    |  |        |          |   |  |        | (2,661  | )
|                                                                                      | Loans to group undertakings                                              |      |        | (9,049 | )    |  |        | (9,468    | ) |  |        | (24,539 | )
|                                                                                      | Capital contribution received                                            |      |        |       |      |  |        |          |   |  |        | 1,212   |  
|                                                                                      |                                                                          |      |        |        |      |  |        |           |  
|Net (decrease)/ increase in cash and cash equivalents under US
    GAAP               |                                                                          |      | (1,591 | )      |      |  | 2,555  |           |   |  | (1,369 | )      
|Cash and cash equivalents under US GAAP at the beginning of the
    year              |                                                                          |      | 3,230  |        |      |  | 675    |           |   |  | 2,044  |        
|                                                                                      |                                                                          |      |        |        |      |  |        |           |  
|Cash and cash equivalents under US GAAP at the end of the year                        |                                                                          |      | 1,639  |        |      |  | 3,230  |           |   |  | 675    |        
|                                                                                      |                                                                          |      |        |        |      |  |        |           |  

Supplemental disclosures of cash flow information


|                                       |              |      |  |       |      |  |  |       |  |  |  |       | 
|-------------------------------------- | ------------ | ---- |  | ----- | ---- |  |  | ----- |  |  |  | ----- | 
|                                       |              | 2004 |  |       | 2003 |  |  | 2002  | 
|                                       |              | £000 |  |       | £000 |  |  | £000  | 
|                                       |              |      |  |       |      |  |  |       | 
|Net cash received during the year for: |              |      |  |       |      |  |  |       |  |  |  |      
|                                       | Interest     |      |  | 36    |      |  |  | 64    |  |  |  | 421   | 
|                                       | Income taxes |      |  | 598   |      |  |  | 412   |  |  |  | 309   | 
|Cash paid during the period for:       |              |      |  |       |      |  |  |       |  |  |  |      
|                                       | Income taxes |      |  | 3,222 |      |  |  | 2,372 |  |  |  | 1,865 | 

Supplemental schedule of non-cash investing and financing
activities




100



---



##### 



Global eXchange Services Limited


Notes  (Continued)




Disclosure of accounting policy




f)     Debtors falling due after
more than one year








g)     Income tax


SFAS No 109 Accounting for Income
Taxes,




h)     Exceptional charge






|   |                   
|-- | ------------------
|25 | Companies Act 1985



101



---



##### 





|        |                                                                                         
|------- | ----------------------------------------------------------------------------------------
|Item 9. | Changes in and Disagreements with Accountants on Accounting
    and Financial Disclosure





|         |                        
|-------- | -----------------------
|Item 9A. | Controls and Procedures



Item 9B.     Other
Information




102



---



##### 



PART III


Item 10.     Directors and
Executive Officers


MANAGEMENT




|                |  |     |    |  |          |                                                                             
|--------------- |  | --- | -- |  | -------- | ----------------------------------------------------------------------------
|Name            |  | Age |    |  | Position
|                |  |     |    |  |         
|David Stanton   |  |     | 42 |  |          | Chairman of the Board of Directors                                          
|Gary Greenfield |  |     | 50 |  |          | Chief Executive Officer, President and Director                             
|Rowland Archer  |  |     | 51 |  |          | Senior Vice President of Engineering and Chief Technology Officer           
|Ross Curtis     |  |     | 51 |  |          | Senior Vice President of Global Sales                                       
|Bruce Hunter    |  |     | 56 |  |          | Senior Vice President, General Counsel and Secretary                        
|Robert Kamba    |  |     | 54 |  |          | Senior Vice President of Global Operations and Chief Information
    Officer
|Robert Patrick  |  |     | 33 |  |          | Senior Vice President and Chief Marketing Officer                           
|Louis Salamone  |  |     | 58 |  |          | Senior Vice President, Chief Financial Officer and Treasurer                
|Steven Scala    |  |     | 44 |  |          | Senior Vice President of Corporate Development                              
|Tasos Tsolakis  |  |     | 48 |  |          | Senior Vice President of Global Professional and Customer
    Services      
|David Golob     |  |     | 37 |  |          | Director                                                                    
|Venkat Mohan    |  |     | 52 |  |          | Director                                                                    
|Brian Ruder     |  |     | 32 |  |          | Director                                                                    
|Carl Wilson     |  |     | 58 |  |          | Director                                                                    



David Stanton


Gary Greenfield


Rowland Archer


103



---



##### 



Ross Curtis


Bruce Hunter


Robert Kamba


Robert Patrick


Louis Salamone


Steven Scala


Tasos Tsolakis


104



---



##### 



David Golob


Venkat Mohan


Brian Ruder


Carl Wilson


Board Committees




Audit Committee.




105



---



##### 



Executive Committee.


Compensation Committee.




| |   |                                                                                                                                                                                                                                                                                                                                                 
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | reviewing and recommending to our board of directors the
    adoption or amendment of the various compensation and benefit
    plans and programs maintained for our officers and other key
    employees, including any stock option or incentive compensation
    plans and approving the terms and conditions of awards under
    such plans;
|
| |  | reviewing and approving certain compensation and benefit
    arrangements for senior management;                                                                                                                                                                                                                                                
|
| |  | reviewing and approving compensation for individuals holding the
    offices of Senior Vice President and above; and                                                                                                                                                                                                                            
|
| |  | reviewing and recommending to the board of directors for
    approval the compensation for our Chief Executive Officer.                                                                                                                                                                                                                         



Audit Committee Financial Expert




Code of Ethics




Item 11.     Executive
Compensation


Director Compensation




106



---



##### 



Compensation of Executive Officers




Summary Compensation Table


|                                      |  |                     |      |        |        |  |            |         |  |                        |         |     |              |         |   |              |     |  |         |  |  |  |         |     
|------------------------------------- |  | ------------------- | ---- | ------ | ------ |  | ---------- | ------- |  | ---------------------- | ------- | --- | ------------ | ------- | - | ------------ | --- |  | ------- |  |  |  | ------- | ----
|                                      |  |                     |      |        |        |  |            |         |  | Long-term compensation |        
|                                      |  |                     |      |        |       
|                                      |  | Annual Compensation |      |        | Awards |  |            | Payouts | 
|                                      |  |                     |      |        |        |  |            |         | 
|                                      |  |                     |      | Other  |        |  | Securities |         |  |                       
|                                      |  |                     |      | Annual |        |  | Underlying |         |  | All Other              |        
|                                      |  |                     |      | Salary |        |  | Bonus      |         |  | Compensation           |         |     | Options/SARS |         |   | Compensation |    
|Name and Principal Position(1)        |  | Year                |      |        | ($)    |  |            | ($)     |  |                        | ($)     |     |              | (#) (2) |   |              | ($) | 
|                                      |  |                     |      |        |        |  |            |         |  |                        |         |     |              |         |   |              |     | 
|Gary Greenfield(7)(14)                |  |                     | 2004 |        |        |  | 1,200,002  |         |  |                        |        |     |              |         |  |              |     |  | 605,098 |  |  |  |         |     
|Chief Executive Officer,              |  |                     | 2003 |        |        |  | 87,692     |         |  |                        |        |     |              |         |  |              |     |  | 588,938 |  |  |  | 6,185   | (3) 
|President and Director                |  |                     |      |        |        |  |            |         |  |                        |         |     |              |         |   |              |     |  |         |  |  |  |         |     
|Ross Curtis(15)                       |  |                     | 2004 |        |        |  | 348,882    |         |  |                        | 250,000 |     |              |         |  |              |     |  |        |  |  |  |        |     
|Senior Vice President                 |  |                     | 2003 |        |        |  | 342,172    |         |  |                        | 250,000 |     |              |         |  |              |     |  | 750,000 |  |  |  | 12,000  | (3) 
|of Global Sales                       |  |                     |      |        |        |  |            |         |  |                        |         |     |              |         |   |              |     |  |         |  |  |  |         |     
|Bruce Hunter                          |  |                     | 2004 |        |        |  | 224,281    |         |  |                        | 160,493 |     |              |         |  |              |     |  |        |  |  |  |        |     
|Senior Vice President                 |  |                     | 2003 |        |        |  | 224,281    |         |  |                        | 112,500 |     |              |         |  |              |     |  |        |  |  |  | 23,411  | (3) 
|and General Counsel                   |  |                     | 2002 |        |        |  | 199,873    |         |  |                        | 215,000 | (8) |              |         |  |              |     |  | 284,091 |  |  |  | 389,620 | (4) 
|Steven Scala                          |  |                     | 2004 |        |        |  | 269,131    |         |  |                        | 89,163  |     |              |         |  |              |     |  |        |  |  |  |        |     
|Senior Vice President                 |  |                     | 2003 |        |        |  | 220,828    |         |  |                        | 90,000  |     |              |         |  |              |     |  |        |  |  |  | 12,000  | (3) 
|of Corporate Development              |  |                     | 2002 |        |        |  | 162,748    |         |  |                        | 38,500  | (8) |              |         |  |              |     |  | 568,182 |  |  |  | 257,000 | (16)
|Tasos Tsolakis                        |  |                     | 2004 |        |        |  | 299,041    |         |  |                        | 142,660 |     |              |         |  |              |     |  |        |  |  |  |        |     
|Senior Vice President                 |  |                     | 2003 |        |        |  | 299,041    |         |  |                        | 100,000 |     |              |         |  |              |     |  |        |  |  |  | 23,511  | (3) 
|Global Professional                   |  |                     | 2002 |        |        |  | 268,365    |         |  |                        | 155,000 | (8) |              |         |  |              |     |  | 568,182 |  |  |  | 395,933 | (6) 
|and Customer Services                 |  |                     |      |        |        |  |            |         |  |                        |         |     |              |         |   |              |     |  |         |  |  |  |         |     
|James Macioce(12)                     |  |                     | 2004 |        |        |  | 135,578    |         |  |                        | 112,500 |     |              |         |  |              |     |  |        |  |  |  | 393,750 | (9) 
|Former Senior Vice President          |  |                     | 2003 |        |        |  | 224,281    |         |  |                        | 112,500 |     |              |         |  |              |     |  |        |  |  |  | 23,334  | (3) 
|of Global Transaction Services        |  |                     | 2002 |        |        |  | 206,286    |         |  |                        | 210,000 | (8) |              |         |  |              |     |  | 568,182 |  |  |  | 395,933 | (5) 
|John Soenksen(13)                     |  |                     | 2004 |        |        |  | 172,959    |         |  |                        |        |     |              |         |  |              |     |  |        |  |  |  | 375,000 | (10)
|Former Senior Vice President,         |  |                     | 2003 |        |        |  | 100,965    |         |  |                        | 115,000 |     |              |         |  |              |     |  | 700,000 |  |  |  | 50,717  | (11)
|Chief Financial Officer and Treasurer |  |                     |      |        |        |  |            |         |  |                        |         |     |              |         |   |              |     |  |         |  |  |  |         |     






|    |                                                                                                                                                                                                                                 
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The positions reflected in the table are the positions presently
    held with us by the named executive officers and held at our
    principal operating subsidiary, Global eXchange Services, Inc.                            
|   
|(2) | Represents options granted under the GXS Stock Incentive Plan.
    For more information about this plan, see Stock Incentive
    Plan.                                                                                        
|   
|(3) | Represents the amount contributed by us to retirement savings
    plan.                                                                                                                                                         
|   
|(4) | Consists of $8,035 (the amount contributed by us to retirement
    savings plan); $377,000 (retention bonus paid by General
    Electric in 2002,); and $4,585 (earnings on deferred
    compensation paid by General Electric).
|   
|(5) | Consists of $8,035 (the amount contributed by us to retirement
    savings plan); and $387,000 (retention bonus paid by General
    Electric).                                                                                  
|   
|(6) | Consists of $8,380 (the amount contributed by us to retirement
    savings plan); $390,000 (retention bonus paid by General
    Electric); and $898 (earnings on deferred compensation paid by
    General Electric).           
|   
|(7) | Mr. Greenfield commenced his employment with us in December
    2003.                                                                                                                                                           
|   
|(8) | 25% of the bonus was paid by us and 75% was paid by General
    Electric.                                                                                                                                                       
|   
|(9) | Consists of $393,750 severance paid in July 2004.                                                                                                                                                                               



|     |                                                                                                                                                   
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------
|(10) | Consists of $375,000 severance paid in August 2004.                                                                                               
|    
|(11) | Consists $44,659 of relocation expenses paid to
    Mr. Soenksen in 2003 and $6,058 (the amount contributed by
    us to retirement savings plan).
|    
|(12) | Mr. Macioce resigned from his position effective June 2004.                                                                                       
|    
|(13) | Mr. Soenksen was not an executive officer prior to 2003 and
    resigned from his position effective August 2004.                                 
|    
|(14) | Mr. Greenfield was not an executive officer prior to 2003.                                                                                        
|    
|(15) | Mr. Curtis was not an executive officer prior to 2003.                                                                                            
|    
|(16) | Consists of $257,000 retention bonus paid by General Electric                                                                                     

107



---



##### 





Option Grants in Last Fiscal Year


|                |  |                   |         |                      |                   |  |      |              |  |                  |             |  |  |        |            |  |         |  |        |  |  |  |         | 
|--------------- |  | ----------------- | ------- | -------------------- | ----------------- |  | ---- | ------------ |  | ---------------- | ----------- |  |  | ------ | ---------- |  | ------- |  | ------ |  |  |  | ------- | 
|                |  |                   |         | Potential Realizable |                  
|                |  | Individual Grants |         |                      | Value Rates Of At | 
|                |  |                   |         |                      | Assumed Annual    | 
|                |  | Number Of         |         |                      | Percent Of        |  |      |              |  | Stock Price      |            
|                |  | Securities        |         |                      | Total Options     |  |      |              |  | Appreciation For |            
|                |  | Underlying        |         |                      | Granted To        |  |      |              |  | Option Term (2)  |            
|                |  | Option Granted    |         |                      | Employees In      |  |      | Exercise     |  |                  | Expiration  |  |  |        |           
|Name            |  | (#)               |         |                      | Fiscal Year       |  |      | Price ($/Sh) |  |                  | Date        |  |  | 5% ($) |            |  | 10% ($) | 
|                |  |                   |         |                      |                   |  |      |              |  |                  |             |  |  |        |            |  |         | 
|Gary Greenfield |  |                   | 97,377  | (1)                  |                   |  | 3.4  | %            |  |                  | .50 / share |  |  |        | 6/29/2014  |  |         |  | 32,000 |  |  |  | 85,000  | 
|Gary Greenfield |  |                   | 97,377  | (1)                  |                   |  | 3.4  | %            |  |                  | .50 / share |  |  |        | 7/30/2014  |  |         |  | 32,000 |  |  |  | 85,000  | 
|Gary Greenfield |  |                   | 97,377  | (1)                  |                   |  | 3.4  | %            |  |                  | .50 / share |  |  |        | 8/30/2014  |  |         |  | 32,000 |  |  |  | 85,000  | 
|Gary Greenfield |  |                   | 97,377  | (1)                  |                   |  | 3.4  | %            |  |                  | .50 / share |  |  |        | 10/24/2014 |  |         |  | 32,000 |  |  |  | 85,000  | 
|Gary Greenfield |  |                   | 194,754 | (1)                  |                   |  | 6.8  | %            |  |                  | .50 / share |  |  |        | 12/14/2014 |  |         |  | 64,000 |  |  |  | 171,000 | 
|Gary Greenfield |  |                   | 6,635   | (2)                  |                   |  | 31.8 | %            |  |                  | 100 / share |  |  |        | 7/30/2014  |  |         |  | 2,000  |  |  |  | 6,000   | 
|Gary Greenfield |  |                   | 3,472   | (2)                  |                   |  | 16.7 | %            |  |                  | 100 / share |  |  |        | 8/30/2014  |  |         |  | 1,000  |  |  |  | 3,000   | 
|Gary Greenfield |  |                   | 3,472   | (2)                  |                   |  | 16.7 | %            |  |                  | 100 / share |  |  |        | 10/24/2014 |  |         |  | 1,000  |  |  |  | 3,000   | 
|Gary Greenfield |  |                   | 7,257   | (2)                  |                   |  | 34.8 | %            |  |                  | 100 / share |  |  |        | 12/14/2014 |  |         |  | 2,000  |  |  |  | 6,000   | 
|Ross Curtis     |  |                   |        |                      |                   |  |      |              |  |                  |             |  |  |        |            |  |         |  |        |  |  |  |         | 
|Bruce Hunter    |  |                   |        |                      |                   |  |      |              |  |                  |             |  |  |        |            |  |         |  |        |  |  |  |         | 
|Tasos Tsolakis  |  |                   |        |                      |                   |  |      |              |  |                  |             |  |  |        |            |  |         |  |        |  |  |  |         | 
|Steven Scala    |  |                   |        |                      |                   |  |      |              |  |                  |             |  |  |        |            |  |         |  |        |  |  |  |         | 
|James Macioce   |  |                   |        |                      |                   |  |      |              |  |                  |             |  |  |        |            |  |         |  |        |  |  |  |         | 
|John Soenksen   |  |                   |        |                      |                   |  |      |              |  |                  |             |  |  |        |            |  |         |  |        |  |  |  |         | 






|    |                                                                                                                                                                                                                                                                                                                                                                                        
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The options represent the right to buy shares of GXS Holdings
    common stock.                                                                                                                                                                                                                                                                                                        
|   
|(2) | The options represent the right to buy shares of GXS Holdings
    preferred stock.                                                                                                                                                                                                                                                                                                     
|   
|(3) | There is no assurance that the actual stock price appreciation
    over the option term will be at the assumed 5% or 10% annual
    rate of compound stock price appreciation or at any other
    defined levels. Unless the market price of the common stock
    appreciates over the option term no value will be realized from
    the option grants made to the executive officers.

108



---



##### 



Aggregated Option Exercises in Last Fiscal Year and Fiscal
Year End Option Values


|                |  |             |   |  |          |                        |                   |             |                      |                         |               |  |  |             |         |  |               |  |   |  |  |  |   | 
|--------------- |  | ----------- | - |  | -------- | ---------------------- | ----------------- | ----------- | -------------------- | ----------------------- | ------------- |  |  | ----------- | ------- |  | ------------- |  | - |  |  |  | - | 
|                |  |             |   |  |          | Number of Securities   |                   |             |                     
|                |  |             |   |  |          | Underlying Unexercised |                   |             | Value of Unexercised |                        
|                |  |             |   |  |          | Options at             |                   |             | In-The-Money Options |                        
|                |  | Shares      |   |  |          |                        | December 31, 2004 |             |                      | at December 31, 2004(1) |              
|                |  | Acquired on |   |  | Value    |                        |                   |             |                      |                         |               | 
|                |  | Exercise    |   |  | Realized |                        |                   | Exercisable |                      |                         | Unexercisable |  |  | Exercisable |         |  | Unexercisable | 
|Name            |  | (#)         |   |  | ($)      |                        |                   | (#)         |                      |                         | (#)           |  |  | ($)         |         |  | ($)           | 
|                |  |             |   |  |          |                        |                   |             |                      |                         |               |  |  |             |         |  |               | 
|Gary Greenfield |  |             |  |  |          |                        |                  |             |                      |                         | 1,153,171     |  |  |             |        |  |               |  |  |  |  |  |  | 
|Gary Greenfield |  |             |  |  |          |                        |                  |             |                      |                         | 44,050        |  |  |             |        |  |               |  |  |  |  |  |  | 
|Ross Curtis     |  |             |  |  |          |                        |                  |             |                      |                         | 215,625       |  |  |             | 534,375 |  |               |  |  |  |  |  |  | 
|Bruce Hunter    |  |             |  |  |          |                        |                  |             |                      |                         | 98,248        |  |  |             | 185,843 |  |               |  |  |  |  |  |  | 
|Tasos Tsolakis  |  |             |  |  |          |                        |                  |             |                      |                         | 196,496       |  |  |             | 371,686 |  |               |  |  |  |  |  |  | 
|Steven Scala    |  |             |  |  |          |                        |                  |             |                      |                         | 196,496       |  |  |             | 371,686 |  |               |  |  |  |  |  |  | 
|James Macioce   |  |             |  |  |          |                        |                  |             |                      |                         |              |  |  |             |        |  |               |  |  |  |  |  |  | 
|John Soenksen   |  |             |  |  |          |                        |                  |             |                      |                         |              |  |  |             |        |  |               |  |  |  |  |  |  | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Represents the total gain that would be realized if all
    exercisable options were exercised. There is no public market
    for our common stock as of the date of this annual report, and
    there was no public market for our common stock as of
    December 31, 2004. Accordingly, these values have been
    calculated on the basis of an assumed fair market value of $0.50
    per share, which is equal to the exercise price of all options
    listed above.



General Electric Option Exercises and Fiscal Year End
Values


|                |  |             |        |  |          |                        |                   |             |                      |                         |               |  |  |             |       |  |               |  |           |  |  |  |         | 
|--------------- |  | ----------- | ------ |  | -------- | ---------------------- | ----------------- | ----------- | -------------------- | ----------------------- | ------------- |  |  | ----------- | ----- |  | ------------- |  | --------- |  |  |  | ------- | 
|                |  |             |        |  |          | Number of Securities   |                   |             |                     
|                |  |             |        |  |          | Underlying Unexercised |                   |             | Value of Unexercised |                        
|                |  |             |        |  |          | Options at             |                   |             | In-The-Money Options |                        
|                |  | Shares      |        |  |          |                        | December 31, 2004 |             |                      | at December 31, 2004(1) |              
|                |  | Acquired on |        |  | Value    |                        |                   |             |                      |                         |               | 
|                |  | Exercise    |        |  | Realized |                        |                   | Exercisable |                      |                         | Unexercisable |  |  | Exercisable |       |  | Unexercisable | 
|Name            |  | (#)         |        |  | ($)      |                        |                   | (#)         |                      |                         | (#)           |  |  | ($)         |       |  | ($)           | 
|                |  |             |        |  |          |                        |                   |             |                      |                         |               |  |  |             |       |  |               | 
|Gary Greenfield |  |             |       |  |          |                        |                  |             |                      |                         |              |  |  |             |      |  |               |  |          |  |  |  |        | 
|Ross Curtis     |  |             |       |  |          |                        |                  |             |                      |                         |              |  |  |             |      |  |               |  |          |  |  |  |        | 
|Bruce Hunter    |  |             | 24,000 |  |          |                        | 814,416           |             |                      |                         | 82,500        |  |  |             | 7,500 |  |               |  | 1,306,096 |  |  |  | 270,375 | 
|Tasos Tsolakis  |  |             |       |  |          |                        |                  |             |                      |                         | 33,750        |  |  |             | 3,750 |  |               |  | 56,526    |  |  |  | 135,188 | 
|Steven Scala    |  |             |       |  |          |                        |                  |             |                      |                         | 24,750        |  |  |             | 3,750 |  |               |  | 19,825    |  |  |  | 135,188 | 
|James Macioce   |  |             | 12,000 |  |          |                        | 347,400           |             |                      |                         | 39,375        |  |  |             | 1,875 |  |               |  | 539,401   |  |  |  | 67,594  | 
|John Soenksen   |  |             |       |  |          |                        |                  |             |                      |                         |              |  |  |             |      |  |               |  |          |  |  |  |        | 






|    |                                                                                                                                                                         
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Represents the total gain that would be realized if all
    exercisable options were exercised. Market value for the common
    stock was $36.05 as of December 31, 2004

Employment Agreements




109



---



##### 











| |   |                     
| | - | --------------------
| |  | a lump sum equal to:



| |   |                                                    
| | - | ---------------------------------------------------
| |  | earned but unpaid salary and accrued benefits; plus
|
| |  | an amount equal to:                                



| |   |                                                                                                                          
| | - | -------------------------------------------------------------------------------------------------------------------------
| |  | a pro-rata portion of the executives most recent annual
    bonus based on the month of the executives termination; and
|
| |  | a severance payment equal to the officers then-current
    annual salary and most recent bonus; and                     



| |   |                                                                                                                                                                    
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | accelerated vesting of the portion of the officers options
    that would have become vested within the twelve-month period
    following the date of termination.





| |   |                                                                                                                                                                        
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | a lump sum equal to earned but unpaid salary and accrued
    benefits; and                                                                                             
|
| |  | a severance payment equal to one hundred percent or fifty
    percent, depending on the officer, of the officers
    then-current annual salary and most recent bonus.



Stock Incentive Plan






110



---



##### 











401(k) Plan




111



---



##### 





|         |                                                                                                   
|-------- | --------------------------------------------------------------------------------------------------
|Item 12. | Security Ownership of Certain Beneficial Owners and
    Management and Related Stockholder Matters





| |   |                                                                                                                                          
| | - | -----------------------------------------------------------------------------------------------------------------------------------------
| |  | The stockholders we know to be beneficial owners of more than
    five percent of the outstanding shares of GXS Holding voting
    stock;
|
| |  | Each of our directors and executive officers; and                                                                                        
|
| |  | All of our directors and executive officers as a group.                                                                                  



|                                                             |                                                                               |                  |           |  |            |  |                  |              |  |  |            |  |  |  |      |   | 
|------------------------------------------------------------ | ----------------------------------------------------------------------------- | ---------------- | --------- |  | ---------- |  | ---------------- | ------------ |  |  | ---------- |  |  |  | ---- | - | 
|                                                             |                                                                               | Number of Shares |           |  |            |  |                  |              | 
|                                                             |                                                                               | of Series A      |           |  |            |  | Number of Shares |              |  | 
|                                                             |                                                                               | Preferred Stock  |           |  |            |  | of Common Stock  |              |  | 
|                                                             |                                                                               | Beneficially     |           |  | Percent of |  |                  | Beneficially |  |  | Percent of | 
|Name                                                         |                                                                               | Owned            |           |  | Class      |  |                  | Owned        |  |  | Class      | 
|                                                             |                                                                               |                  |           |  |            |  |                  |              |  |  |            | 
|Five Percent Stockholders                                    |                                                                               |                  |           |  |            |  |                  |              |  |  |            |  |  |  |      |  
|Francisco Partners GP, LLC(1)                                |                                                                               |                  | 3,691,033 |  |            |  | 89.2             | %            |  |  | 92,275,825 |  |  |  | 89.2 | %
|                                                             | 2882 Sand Hill Road
    Suite 280
    Menlo Park, CA 94025                    |                  |           |  |            |  |                  |              |  |  |            |  |  |  |      |   | 
|GE Investments, Inc.(2)                                      |                                                                               |                  | 400,000   |  |            |  | 9.7              | %            |  |  | 10,000,000 |  |  |  | 9.7  | %
|                                                             | C/o General Electric Company
    3135 Easton Turnpike
    Fairfield, CT 06431 |                  |           |  |            |  |                  |              |  |  |            |  |  |  |      |   | 
|Directors and Executive Officers                             |                                                                               |                  |           |  |            |  |                  |              |  |  |            |  |  |  |      |  
|David Stanton(1)                                             |                                                                               |                  |          |  |            |  |                 |              |  |  |           |  |  |  |     |  
|Gary Greenfield(4)                                           |                                                                               |                  | 44,711    |  |            |  | 1.1              | %            |  |  | 1,742,528  |  |  |  | 1.7  | %
|Rowland Archer                                               |                                                                               |                  |          |  |            |  |                 |              |  |  | 36,563     |  |  |  | *    |  
|Ross Curtis(4)                                               |                                                                               |                  |          |  |            |  |                 |              |  |  | 271,875    |  |  |  | *    |  
|Bruce Hunter(4)                                              |                                                                               |                  |          |  |            |  |                 |              |  |  | 108,310    |  |  |  | *    |  
|Robert Kamba                                                 |                                                                               |                  |          |  |            |  |                 |              |  |  |           |  |  |  |     |  
|Robert Patrick(4)                                            |                                                                               |                  |          |  |            |  |                 |              |  |  | 127,841    |  |  |  | *    |  
|Louis Salamone, Jr.                                          |                                                                               |                  |          |  |            |  |                 |              |  |  |           |  |  |  |     |  
|Steven Scala (4)                                             |                                                                               |                  |          |  |            |  |                 |              |  |  | 216,619    |  |  |  | *    |  
|Tasos Tsolakis(4)                                            |                                                                               |                  |          |  |            |  |                 |              |  |  | 216,619    |  |  |  | *    |  
|David Golob(1)                                               |                                                                               |                  |          |  |            |  |                 |              |  |  |           |  |  |  |     |  
|Venkat Mohan(3)                                              |                                                                               |                  |          |  |            |  |                 |              |  |  | 10,625     |  |  |  | *    |  
|Brian Ruder                                                  |                                                                               |                  |          |  |            |  |                 |              |  |  |           |  |  |  |     |  
|Carl Wilson                                                  |                                                                               |                  |          |  |            |  |                 |              |  |  | 11,250     |  |  |  | *    |  
|All directors and executive officers as a group (15) persons |                                                                               |                  | 44,711    |  |            |  | 1.1              | %            |  |  | 2,742,230  |  |  |  | 2.6  | %

112



---



##### 








|  |             
|- | ------------
|* | Less than 1%



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Francisco Partners GP, LLC indirectly holds all of its voting
    stock through Global Acquisition Company LLC, Global Acquisition
    Holding Company and Global Acquisition Company. As the managing
    member of Global Acquisition Company LLC, Francisco Partners GP,
    LLC exercises voting and dispositive power over the shares of
    GXS Holdings voting stock held by Global Acquisition Company.
    David Stanton and David Golob are members of the management
    committee of Francisco Partners GP, LLC and, as a result, may be
    deemed to have or share beneficial ownership of the GXS Holdings
    voting stock held by these entities. Messrs. Stanton and
    Golob disclaim beneficial ownership of all such shares of GXS
    Holding voting stock. Share disclosed in the table do not
    include 4,476 shares of preferred stock and 111,916 shares of
    common stock that Global Acquisition Company may acquire in
    connection with our acquisition on June 3, 2003 of assets
    of Celarix, Inc. These shares are being held in escrow pending
    resolution of items related to the acquisition. The shares
    disclosed in the table include 91,033 shares of preferred stock
    and 2,275,825 shares of common stock issued in connection with
    our acquisition of HAHT Commerce, Inc. on February 13, 2004
    that Global Acquisition Company acquired upon completion of
    exchange procedures related to the HAHT acquisition, but do not
    include 42,225 shares of preferred stock and 1,055,625 shares of
    common stock that Global Acquisition Company may acquire in
    connection with the HAHT acquisition, but are currently held in
    escrow pending the resolution of items related to the HAHT
    acquisition.
|   
|(2) | GE Investments is an indirect, wholly owned subsidiary of
    General Electric.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   
|(3) | Mr. Mohan is a Venture Partner at Norwest Venture Partners,
    which is a co-investor with Francisco Partners GP, LLC in Global
    Acquisition Company LLC.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   
|(4) | The number of common shares shown in the table reflects stock
    options vested under the GXS Holdings stock incentive plan for
    directors and executive officers of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

113



---



##### 



Item 13.     Certain
Relationships and Related Transactions


Transactions with Francisco Partners
















| |   |                                                    
| | - | ---------------------------------------------------
| |  | a tax matters agreement;                           
|
| |  | a services agreement;                              
|
| |  | an intellectual property agreement and license; and

114



---



##### 





| |   |                          
| | - | -------------------------
| |  | a stockholders agreement.



Recapitalization Agreement




Intellectual Property Agreement and License




, tm tm




Tax Matters Agreement and Related Tax Matters




115



---



##### 









Stockholders Agreement






| |   |                                                                                                                                                                                                                                                                                                                                                   
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | GE Investments has the right to require GXS Holdings to offer to
    it the right to purchase its pro rata share of any capital stock
    or other equity-linked securities that GXS Holdings proposes to
    offer to any person, subject to a limited number of exceptions,
    so that GE Investments can maintain its percentage shareholding;
|
| |  | GE Investments has the right to participate, on a pro rata
    basis, in any transfer of GXS Holdings capital stock by
    Global Acquisition Company, subject to a limited number of
    exceptions, or in any other liquidity event at the same price
    and on the same terms and conditions as Global Acquisition
    Company;              

116



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##### 





| |   |                                                                                                                                                                                                                                                                                                                                                                                                                
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Global Acquisition Company has the right to cause GE Investments
    to participate, on a pro rata basis, in any significant transfer
    or sale of GXS Holdings capital stock by Global
    Acquisition Company at the same price and on the same terms and
    conditions as Global Acquisition Company;                                                                                                   
|
| |  | GE Investments has the right, at any time after the first
    anniversary of the closing of the recapitalization, to transfer
    all or any part of its shares, subject to a limited number of
    exceptions, in a private sale although GE Investments will be
    required to first offer the shares to Global Acquisition Company;                                                                        
|
| |  | GE Investments and Global Acquisition Company have the right to
    make certain transfers of their respective shares, such as
    transfers to affiliates, de minimustransfers, pledges or
    similar encumbrances;                                                                                                                                                                                          
|
| |  | GE Investments has the right to one demand registration of any
    shares of GXS Holdings capital stock that it then holds
    after one year following the initial public offering of GXS
    Holdings capital stock, if GXS Holdings is then eligible
    to use Form S-3 to register the shares and if GE
    Investments owns at least 5% of GXS Holdings outstanding
    capital stock at the time; and
|
| |  | GE Investments has unlimited piggy-back registration
    rights, after the initial public offering of GXS Holdings
    capital stock, to include any shares of GXS Holdings
    capital stock that it then holds in registrations that GXS
    Holdings effects for its own account.                                                                                                                       



Senior Subordinated Reset Notes




Other Related Party Arrangements






117



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##### 









Item 14.     Principal
Accountanting Fees and Services




|                   |                              |      |       |       |      |   |       |       | 
|------------------ | ---------------------------- | ---- | ----- | ----- | ---- | - | ----- | ----- | 
|                   |                              | 2003 |       |       | 2004 |  
|                   |                              |      |       |       |      |  
|Audit Fees(1)      |                              | $    | 1,700 |       |      | $ | 1,075 |      
|Audit Related Fees |                              |      |      |       |      |   | 444   |      
|                   |                              |      |       |       |      |  
|                   | Audit and audit related fees |      |       | 1,700 |      |   |       | 1,519 | 
|Tax Fees(2)        |                              |      | 380   |       |      |   | 545   |      
|                   |                              |      |       |       |      |  
|                   |                              | $    | 2,080 |       |      | $ | 2,064 |      
|                   |                              |      |       |       |      |  






|    |                                                                                                         
|--- | --------------------------------------------------------------------------------------------------------
|(1) | Includes statuatory audits and services related to offering
    memorandums and registration statements.
|   
|(2) | Tax fees include fees for tax consultation services.                                                    



118



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##### 





|         |                                           
|-------- | ------------------------------------------
|Item 15. | Exhibits and Financial Statement Schedules

|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |      |     | 
|------ |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | --- | 
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  | Page |    
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |      |    
|(a)(1) |  | Financial Statements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |      |     | 
|       |  | Report of Independent Registered Public Accounting Firm                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |      | 48  | 
|       |  | Consolidated Balance Sheets as of December 31, 2003 and 2004                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |      | 49  | 
|       |  | Consolidated Statements of Operations for the Years Ended
    December 31, 2002, 2003 and 2004                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  |      | 50  | 
|       |  | Consolidated Statements of Comprehensive Loss for the Years
    Ended December 31, 2002, 2003 and 2004                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  |      | 51  | 
|       |  | Consolidated Statements of Stockholders Equity for the
    Years Ended December 31, 2002, 2003 and 2004                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |      | 52  | 
|       |  | Consolidated Statements of Cash Flows for the Years Ended
    December 31, 2002, 2003 and 2004                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  |      | 53  | 
|       |  | Notes to Consolidated Financial Statements for the Years Ended
    December 31, 2002, 2003 and 2004                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  |      | 54  | 
|      
|(a)(2) |  | Other Required Financial Statements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  |      |     | 
|       |  | The capital stock of the Companys subsidiaries is pledged
    to secure the Registrants debt obligations. Pursuant to
    Rule 3-16 of Regulation S-X, the registrant is required to
    provide stand-alone financial statements for any subsidiary, on
    a consolidated basis, for which the value of the pledge exceeds
    20% of the face value of the registered security. The Company
    has determined that only the pledges of Global eXchange
    Services, Inc. and Global eXchange Services U.K. Limited meet
    this criteria. The Consolidated Acquisition UK Limited Financial
    Statements for Global eXchange Services, Inc. are virtually
    identical to those of the Registrant and, therefore, have not
    been separately prepared. Financial Statements of Global
    Exchange Services U.K. Limited are provided herein: The
    following financial statements, together with the report thereon
    of independent auditors, are included in this Report: |  |      |     | 
|       |  | Independent Auditors Report                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |      | 82  | 
|       |  | Consolidated Profit and Loss Account for the Years Ended
    December 31, 2004, 2003 and 2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  |      | 83  | 
|       |  | Consolidated Balance Sheets as of December 31, 2004 and 2003                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |      | 84  | 
|       |  | Notes to Consolidated Financial Statements for the Years Ended
    December 31, 2004, 2003 and 2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  |      | 85  | 
|      
|(a)(3) |  | Financial Schedules                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  |      |     | 
|(a)(4) |  | Consolidated Financial Statement Schedule of Valuation and
    Qualifying Accounts                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |      | 123 | 

119



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##### 





|   |                 
|-- | ----------------
|B. | List of Exhibits

|        |    |             |  |                                                                                                                                                                                                                                                                                                                          
|------- | -- | ----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|        | 3  | .1(1)       |  | Certificate of Incorporation filed with the Secretary of State
    of Delaware on September 9, 2002.                                                                                                                                                                                                                     
|        | 3  | .2(1)       |  | By-laws of GXS Corporation.                                                                                                                                                                                                                                                                                              
|        | 4  | .1(1)       |  | Indenture, dated as of September 27, 2002 between
    GXS Corporation, the subsidiary guarantors and Wells Fargo
    Bank Minnesota, National Association, as trustee.                                                                                                                                                   
|        | 4  | .2(1)       |  | Registration Rights Agreement dated as of September 27,
    2002 between GXS Corporation, the subsidiary guarantors and
    General Electric Capital Company.                                                                                                                                                            
|        | 4  | .3(1)       |  | Form of Note (included in Exhibit 4.1).                                                                                                                                                                                                                                                                                  
|        | 4  | .4(1)       |  | Form of Guarantee (including in Exhibit 4.1).                                                                                                                                                                                                                                                                            
|        | 4  | .5(1)       |  | Indenture, dated as of March 21, 2003 between
    GXS Corporation, the subsidiary guarantors and Wells Fargo
    Bank Minnesota, National Association, as trustee.                                                                                                                                                       
|        | 4  | .6(1)       |  | Registration Rights Agreement dated as of March 21, 2003
    between GXS Corporation, the subsidiary guarantors and
    Credit Suisse First Boston.                                                                                                                                                                      
|        | 4  | .7(1)       |  | Form of Note (included in Exhibit 4.5).                                                                                                                                                                                                                                                                                  
|        | 4  | .8(1)       |  | Form of Guarantee (included in Exhibit 4.5).                                                                                                                                                                                                                                                                             
|        | 4  | .9(1)       |  | Intercreditor Agreement, dated as of March 21, 2003, among
    Foothill Capital Corporation, Wells Fargo Bank Minnesota,
    National Association, GXS Holdings, Inc., GXS Corporation,
    Global eXchange Services, Inc., Global eXchange Services
    Holdings, Inc., GXS International, Inc. and TPN Register, L.L.C.
|        | 10 | .1(1)       |  | Employment Agreement, dated as of September 28, 2002, by
    and among Global eXchange Services, Inc., GXS Holdings, Inc. and
    Harvey F. Seegers.                                                                                                                                                                     
|        | 10 | .2(1)       |  | Employment Agreement, dated as of September 30, 2002, by
    and among Global eXchange Services, Inc., GXS Holdings, Inc. and
    James Macioce.                                                                                                                                                                         
|        | 10 | .3(1)       |  | Employment Agreement, dated as of September 30, 2002, by
    and among Global eXchange Services, Inc., GXS Holdings, Inc. and
    Bruce E. Hunter.                                                                                                                                                                       
|        | 10 | .4(1)       |  | Employment Agreement, dated as of September 30, 2002, by
    and among Global eXchange Services, Inc., GXS Holdings, Inc. and
    Mike Humenik.                                                                                                                                                                          
|        | 10 | .5(1)       |  | Employment Agreement, dated as of September 30, 2002, by
    and among Global eXchange Services, Inc., GXS Holdings, Inc. and
    Steven Scala.                                                                                                                                                                          
|        | 10 | .6(1)       |  | Employment Agreement, dated as of September 30, 2002, by
    and among Global eXchange Services, Inc., GXS Holdings, Inc. and
    Jeff McCroskey.                                                                                                                                                                        
|        | 10 | .7(1)       |  | Employment Agreement, dated as of September 30, 2002, by
    and among Global eXchange Services, Inc., GXS Holdings, Inc. and
    Anastasios Tsolakis.                                                                                                                                                                   
|        | 10 | .8(1)       |  | Employment Agreement, dated as of September 30, 2002, by
    and among Global eXchange Services, Inc., GXS Holdings, Inc. and
    Mandy Edwards.                                                                                                                                                                         
|        | 10 | .9(1)       |  | Employment Agreement, dated as of January 6, 2003, by and
    among Global eXchange Services, Inc., GXS Holdings, Inc. and
    Ross Curtis.                                                                                                                                                                              
|        | 10 | .10(1)      |  | GXS Holdings, Inc. Stock Incentive Plan.                                                                                                                                                                                                                                                                                 
|        | 10 | .11(1)      |  | GXS Investment and Savings Plan.                                                                                                                                                                                                                                                                                         
|        | 10 | .12(1)      |  | Loan and Security Agreement, dated as of March 21, 2003, by
    and among GXS Corporation, GXS Holdings, Inc., the
    financial institutions party thereto and Foothill Capital
    Corporation.                                                                                                                        
|        | 10 | .13(1)      |  | General Continuing Guaranty, dated as of March 21, 2003, by
    GXS Holdings, Inc. and the guarantors.                                                                                                                                                                                                                   
|        | 10 | .14(1)      |  | Open-End Mortgage, Security Agreement, Assignment of Rents and
    Leases and Fixture Filing (Ohio), dated as of March 21,
    2003, made by Global eXchange Services, Inc. in favor of Wells
    Fargo Bank Minnesota, National Association.                                                                            

120



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##### 



|        |    |        |             |                                                                                                                                                                                                                                           
|------- | -- | ------ | ----------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |        |            
|Number  |    |        | Description
|        |    |        |            
|        | 10 | .15(1) |             | Open-End Mortgage, Security Agreement, Assignment of Rents and
    Leases and Fixture Filing, dated as of March 21, 2003, made
    by GXS Holdings, Inc., GXS Corporation and the guarantors
    in favor of Foothill Capital Corporation.
|        | 10 | .16(1) |             | Recapitalization Agreement, dated as of June 21, 2002, by
    and among General Electric Company, GE Investments, Inc. and
    Global Acquisition Company.                                                                                
|        | 10 | .17(1) |             | Services Agreement, dated as of September 27, 2002, by and
    among General Electric Company, GXS Holdings, Inc., Global
    Acquisition Company and GE Capital Financial, Inc.                                                          
|        | 10 | .18(1) |             | Intellectual Property Agreement and License, dated as of
    September 27, 2002, by and among, General Electric Company,
    GXS Corporation and Global Acquisition Company                                                               
|        | 10 | .19(1) |             | GE Monogram License, dated as of September 27, 2002, by and
    between Monogram Licensing, Inc. and GXS Corporation.                                                                                                                     
|        | 10 | .20(1) |             | Tax Matters Agreement, dated as of June 21, 2002, by and
    among General Electric Company, GE Investments, Inc. and Global
    Acquisition Company.                                                                                     
|        | 10 | .21(1) |             | Asset Purchase Agreement, dated as of June 3, 2003, by and
    between GXS Holdings, Inc. and Celarix, Inc.                                                                                                                               
|        | 10 | .22(2) |             | Employment Agreement, dated August 4, 2003, by and among
    Global eXchange Services, Inc., GXS Holdings, Inc. and John
    Soenksen.                                                                                                    
|        | 10 | .23(3) |             | Agreement and Plan of Merger, dated as of January 14, 2004,
    by and among HAHT Commerce, Inc., GXS January, Inc., GXS
    Holdings, Inc. and certain stockholders of HAHT Commerce, Inc.                                               
|        | 10 | .24(4) |             | Employment Agreement, dated November 4, 2003, by and among
    Global eXchange Services, Inc., GXS Holdings, Inc. and Robert
    Patrick.                                                                                                 
|        | 10 | .25(4) |             | Employment Agreement, dated December 1, 2003, by and among
    Global eXchange Services, Inc., GXS Holdings, Inc. and Gary
    Greenfield.                                                                                                
|        | 10 | .26(4) |             | Agreement, dated December 5, 2003, by and among Global
    eXchange Services, Inc., GXS Holdings, Inc. and Carl Wilson.                                                                                                                   
|        | 10 | .27(4) |             | Agreement, dated January 16, 2004, by and among Global
    eXchange Services, Inc., GXS Holdings, Inc. and Venkat Mohan.                                                                                                                  
|        | 10 | .28(4) |             | Employment Agreement, dated January 20, 2004, by and among
    Global eXchange Services, Inc., GXS Holdings, Inc. and Rowland
    Archer.                                                                                                 
|        | 10 | .29(4) |             | First Amendment to Loan and Security Agreement, dated as of
    December 31, 2003, by and among GXS Corporation, GXS
    Holdings, Inc., the financial institutions party thereto and
    Foothill Capital Corporation.                   
|        | 10 | .30(4) |             | Second Amendment to Loan and Security Agreement, dated as of
    March 29, 2004, by and among GXS Corporation, GXS
    Holdings, Inc., the financial institutions party thereto and
    Foothill Capital Corporation.                     
|        | 10 | .31(4) |             | Separation Agreement dated as of December 1, 2003, by and
    among Global eXchange Services, Inc., GXS Holdings, Inc. and
    Harvey F. Seegers.                                                                                         
|        | 10 | .32(5) |             | Third Amendment to Loan and Security Agreement, dated as of
    June 4, 2004, by and among GXS Corporation, GXS
    Holdings, Inc., the financial institutions party thereto and
    Wells Fargo Foothill.                                
|        | 10 | .33(5) |             | Separation Agreement, dated as of May 21, 2004, by and
    among Global eXchange Services, Inc., GXS Holdings, Inc., and
    James Macioce.                                                                                               
|        | 10 | .34(5) |             | Separation Agreement, dated as of July 15, 2004, by and
    among Global eXchange Services, Inc., GXS Holdings, Inc., and
    John Soenksen.                                                                                              
|        | 10 | .35(5) |             | Employment Agreement dated July 7, 2004, by and among
    Global eXchange Services, Inc., GXS Holdings, Inc., and Robert
    Kamba.                                                                                                       
|        | 10 | .36(5) |             | Amendment to GXS Investment and Savings Plan.                                                                                                                                                                                             

121



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##### 



|        |     |        |             |                                                                                                                                                                                                              
|------- | --- | ------ | ----------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |     |        |            
|Number  |     |        | Description
|        |     |        |            
|        | 10  | .37(5) |             | Amendment to Employment Agreement dated as of August 9,
    2004, by and among Global eXchange Services, Inc., GXS Holdings,
    Inc., and Ross Curtis.                                                      
|        | 10  | .38(5) |             | Fourth Amendment to Loan and Security Agreement, dated as of
    August 3, 2004, by and among GXS Corporation, GXS
    Holdings, Inc., the financial institutions party thereto and
    Wells Fargo Foothill.
|        | 10  | .39(6) |             | Employment Agreement dated August 26, 2004, by and among
    Global eXchange Services, Inc., GXS Holdings, Inc., and Louis
    Salamone, Jr.                                                                 
|        | 10  | .40(6) |             | Employment Services Agreement, dated as of November 1,
    2004, by and between GXS Corporation and G International,
    Inc.                                                                                
|        | 14  | (4)    |             | Code of Ethics                                                                                                                                                                                               
|        | 21  | (1)    |             | Subsidiaries of GXS Corporation.                                                                                                                                                                             
|        | *31 | .1     |             | Form of Rule 13a-14(a)/15d-14(a) Certification of Chief
    Executive Officer                                                                                                                                
|        | *31 | .2     |             | Form of Rule 13a-14(a)/15d-14(a) Certification of Chief
    Financial Officer                                                                                                                                






|    |                                                                                                                                                                              
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|*   | Filed herewith                                                                                                                                                               
|   
|(1) | Incorporated by reference to GXS Corporations
    Registration Statement on Form S-4, Commission File
    No. 333-106143, filed on June 16, 2003.                           
|   
|(2) | Incorporated by reference to Amendment No. 2 to
    GXS Corporations Registration Statement on
    Form S-4, Commission File No. 333-106143, filed on
    September 5, 2003.
|   
|(3) | Incorporated by reference to GXS Corporations Current
    Report on Form 8-K, Commission File No. 333-106143,
    filed on January 15, 2004.                                
|   
|(4) | Incorporated by reference to Exhibit 10.24 to
    GXS Corporations Annual Report on Form 10-K,
    Commission File No. 333-106143, filed on March 30,
    2004.             
|   
|(5) | Incorporated by reference to Exhibit 10.32 to
    GXS Corporations Quarterly Report on Form 10-Q,
    Commission File No. 333-106143, filed on August 13,
    2004.         
|   
|(6) | Incorporated by reference to Exhibit 10.40 to
    GXS Corporations Quarterly Report on Form 10-Q,
    Commission File No. 333-106143, filed on November 12,
    2004.       

122



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##### 



GXS CORPORATION AND SUBSIDIARIES


SCHEDULE II


VALUATION AND QUALIFYING ACCOUNTS


(In thousands)


|                                      |  |              |       |     |                 |   |        |                |  |   |            |     |            |             |         |      |  |   |       | 
|------------------------------------- |  | ------------ | ----- | --- | --------------- | - | ------ | -------------- |  | - | ---------- | --- | ---------- | ----------- | ------- | ---- |  | - | ----- | 
|                                      |  |              |       | (1) |                 |   |        |                |  |   |           
|                                      |  | Balance at   |       |     | Charged to      |   |        | (2)            |  |   |            |     |           
|                                      |  | beginning of |       |     | costs, expenses |   |        | Charged to     |  |   |            |     | Balance at |            
|                                      |  | year         |       |     | and income      |   |        | other accounts |  |   | Deductions |     |            | end of year |        
|                                      |  |              |       |     |                 |   |        |                |  |   |            |     |            |             |        
|For the year ended December 31, 2004: |  |              |       |     |                 |   |        |                |  |   |            |     |            |             |         |      |  |   |       | 
|Allowance for doubtful accounts       |  | $            | 2,538 |     |                 | $ | 105    |                |  | $ | 56         | (B) |            | $           | (203    | )(A) |  | $ | 2,496 | 
|Allowance for sales credits           |  | $            | 8,807 |     |                 | $ | 14,256 |                |  | $ | 53         | (B) |            | $           | (14,851 | )(C) |  | $ | 8,245 | 
|For the year ended December 31, 2003: |  |              |       |     |                 |   |        |                |  |   |            |     |            |             |         |      |  |   |       | 
|Allowance for doubtful accounts       |  | $            | 4,292 |     |                 | $ | (881   | )              |  | $ | 121        | (B) |            | $           | (994    | )(A) |  | $ | 2,538 | 
|Allowance for sales credits           |  | $            | 5,273 |     |                 | $ | 9,508  |                |  | $ | 214        | (B) |            | $           | (6,188  | )(C) |  | $ | 8,807 | 
|For the year ended December 31, 2002: |  |              |       |     |                 |   |        |                |  |   |            |     |            |             |         |      |  |   |       | 
|Allowance for doubtful accounts       |  | $            | 4,849 |     |                 | $ | 1,762  |                |  | $ | 125        | (B) |            | $           | (2,444  | )(A) |  | $ | 4,292 | 
|Allowance for sales credits           |  | $            | 7,137 |     |                 | $ | 14,229 |                |  | $ | 81         | (B) |            | $           | (16,174 | )(C) |  | $ | 5,273 | 






|   |                                                                                      
|-- | -------------------------------------------------------------------------------------
|A. | Doubtful accounts written off, less recoveries on accounts
    previously written off



|   |                                        
|-- | ---------------------------------------
|B. | Related to foreign exchange fluctuation



|   |                                                    
|-- | ---------------------------------------------------
|C. | Gross value of all sales credits issued during year

123



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##### 



SIGNATURES






| |                
| | ---------------
| | GXS Corporation



| |     |                    
| | --- | -------------------
| | By: | /s/ Gary Greenfield

| |                                      
| | -------------------------------------
| |                                      
| | Gary Greenfield                      
| | Chief Executive Officer and President





|                                               |  |                                                                                                |  |                |  | 
|---------------------------------------------- |  | ---------------------------------------------------------------------------------------------- |  | -------------- |  | 
|Signature                                      |  | Title                                                                                          |  | Date          
|                                               |  |                                                                                                |  |               
|                                              
|/s/ Gary GreenfieldGary
    Greenfield         |  | President, Chief Executive Officer and Director (Principal
    Executive Officer)              |  | March 31, 2005
|                                              
|/s/ Louis Salamone, Jr.Louis
    Salamone, Jr. |  | Senior Vice President, Chief Financial Officer and Treasurer
    (Principal Financial Officer) |  | March 31, 2005
|                                              
|/s/ John DuvallJohn
    Duvall                 |  | Vice President and Controller (Principal Accounting Officer)                                   |  | March 31, 2005
|                                              
|/s/ David StantonDavid
    Stanton             |  | Director                                                                                       |  | March 31, 2005
|                                              
|/s/ David GolobDavid
    Golob                 |  | Director                                                                                       |  | March 31, 2005
|                                              
|/s/ Venkat MohanVenkat
    Mohan               |  | Director                                                                                       |  | March 31, 2005
|                                              
|/s/ Brian RuderBrian
    Ruder                 |  | Director                                                                                       |  | March 31, 2005
|                                              
|/s/ Carl WilsonCarl
    Wilson                 |  | Director                                                                                       |  | March 31, 2005

124



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##### 



EXHIBIT INDEX


|        |      |  |             |                                                                              
|------- | ---- |  | ----------- | -----------------------------------------------------------------------------
|Exhibit |      |  |            
|Number  |      |  | Description
|        |      |  |            
|        | 31.1 |  |             | Form of Rule 13a-14(a)/15d-14(a) Certification of Chief
    Executive Officer
|        | 31.2 |  |             | Form of Rule 13a-14(a)/15d-14(a) Certification of Chief
    Financial Officer

125