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

Commission file number 333-106143

GXS CORPORATION

(Exact name of registrant as specified in its charter)

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

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

Indicate by a check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K     o

Indicate by a check mark whether the registrant is an accelerated filer (as determined in Exchange Act Rule 12b-2).     Yes o          No þ

As of March 31, 2005, the Registrant had 100 outstanding shares of common stock, significantly all of which was held by affiliates of the Registrant.

DOCUMENTS INCORPORATED BY REFERENCE

None

TABLE OF CONTENTS

The following annual report contains information about GXS Corporation. You should read this entire report, including the information set forth in the “Factors That Could Affect Future Results” section of “Management’s Discussion and Analysis of Financial Condition and Results of Operations” beginning on page 34. In this report, “we,” “our” and “us” refers to GXS Corporation and its subsidiaries, unless the context otherwise requires.

While most of the information provided in this annual report is historical, some of the comments made are forward-looking statements. These statements are based on current expectations, estimates, forecasts and projections about the industry in which we operate, along with management’s beliefs and assumptions. They are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. These statements are typically identified by words such as “believe,” “anticipate,” “expect,” “plan,” intend,” “estimate,” “may,” “will” and similar expressions. As you read and consider the information in this report, you should understand that these statements may differ materially from actual outcomes and results. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Factors that Could Affect Future Results — Special Note Regarding Forward-Looking Statements.”

Item 1.     Business

Overview

We are a leading provider of on-demand supply chain management solutions to over 30,000 customers worldwide, including over 50% of the Fortune 500 corporations. We provide mission-critical solutions that connect our customers, large and small, continuously to their supply chain partners around the world. Our solutions perform an extensive range of critical supply chain management functions, including the exchange of information relating to trade orders, invoicing and payment instructions, synchronization of product and price information, optimization of inventory levels and demand forecasting. Our customers use our solutions to automate complex supply chain relationships with their networks of business partners, and to reduce the cost and complexity of supply chain operations. We operate a highly reliable, secure global network services platform that connects trading partners 24 hours a day, 7 days a week in approximately 25 countries around the world. We have been pioneers in on-demand supply chain management solutions for 20 years, and have been a leading provider in the technology industry since the late 1960s.

We were incorporated as a Delaware corporation in 2002 to hold the GXS business in connection with the recapitalization pursuant to which Francisco Partners, L.P. became our majority stockholder.

Recent Acquisitions

G International. On November 1, 2004, our indirect parent, Francisco Partners, through a majority-owned acquisition vehicle, acquired G International Inc., a business established to own and operate International Business Machine Corporation’s Electronic Data Interchange and Business Exchange Services businesses. In January 2005 we entered into a letter agreement to acquire the sole stockholder of G International. The consideration to be paid by us for G International will be adjusted from $135.0 million based on the indebtedness and working capital of G International, as well as the expenses incurred by G International and its affiliates in connection with the transaction. The form of consideration will be mutually agreed upon by the parties.

The acquisition of G International is subject to satisfaction of several conditions, including:

We believe that the acquisition of G International will:

HAHT Commerce. On February 13, 2004, we completed the acquisition of HAHT Commerce, Inc. We acquired all of the capital stock of HAHT Commerce through a merger of an indirect wholly owned subsidiary with HAHT Commerce for consideration of approximately $30.0 million, consisting of $15.0 million in cash plus common and preferred shares of GXS Holdings valued at approximately $15.0 million. HAHT Commerce is a provider of on-demand supply chain management applications that automate, integrate and optimize order management, product information management, channel management, business intelligence and customer services between manufacturers, their channel partners and business customers.

Celarix. On June 3, 2003, we acquired substantially all of the assets of Celarix, Inc. related to its logistics integration and visibility solutions business for an aggregate value of approximately $2.0 million in preferred and common shares of GXS Holdings, Inc. and assumed liabilities. The solutions acquired from Celarix help organizations to connect to logistics trading partners and retrieve, use and share shipment status information throughout their supply chains.

We intend to continue to selectively pursue acquisitions of companies with complementary products and technologies to enhance our ability to provide comprehensive solutions to our customers and to expand our business.

Our Industry

We operate in the on-demand supply chain management services industry. On-demand supply chain management describes the systems used for communicating information related to the exchange of goods and services among trading partners. Electronic data interchange, or EDI, which originated in the 1980s and permits the electronic exchange of documents across disparate computing platforms, applications and communications protocols, is the cornerstone of this industry. As the industry continues to evolve, it is moving from EDI into new integration services technology.

We believe that the industry landscape is rapidly evolving in a way that provides many opportunities for us. Traditional Value-Added Network, or VAN, providers are leveraging their connected communities by injecting new technology to provide a higher level of process automation. Businesses are seeking intermediaries to help streamline business processes dependant on highly automated trading partner relationships, such as inventory management, invoicing and payment, order collaboration, and price and promotion management.

Integration service providers such as our company are developing technology to help customers reduce the complexity of process automation with trading partners. Reducing complexity drives significant customer savings. Today, integration service providers deliver a broad range of capabilities in addition to traditional EDI, including data exchange and communications, trading partner management, and integration and application services that help businesses automate and optimize the sharing of data and business processes with their business partners. Businesses enlist the assistance of an integration service provider to speed the enablement of global trading partners, offload difficult integration functions, reduce overall costs of business to business operations, and gain faster access to new community solutions. Supply chain system management is complex. We estimate that 20% of all orders are filled imperfectly and up to 60% of all invoices have errors. In addition, setting up these systems requires significant initial capital investment as well as annual maintenance and higher labor costs. By outsourcing these functions through an integration service provider, a customer can achieve scale with limited network and technological investment while reducing errors and improving overall data quality.

The evolution and globalization of supply networks places increasing demand on on-demand supply chain management services vendors. Technology vendors increasingly need to have a global presence and must offer high-availability, near real-time trading networks. To assure security and reliability, vendors need to have a credible track record, scale and experience to compete for customer accounts. Those with large installed

trading partner bases and infrastructure will have a natural advantage in assisting customers to evolve their supply network technologies.

Within our industry, we believe that there are five main categories of services, including:

As an industry leader, we believe that we are well-positioned to address each of these areas. Beyond our basic transact services for traditional and Internet-based data exchange, our value-added monitoring, synchronize and collaborate solutions allow customers to effectively optimize and manage critical chain functions, including supply and demand planning, order management, customer service, shipment visibility, electronic invoicing, warranty verification, product management, order collaboration and inventory visibility, in a cost-effective and efficient manner.

Our Business Model

We employ a “hub and spoke” model for our on-demand supply chain management services. This model entails offering on-demand supply chain management solutions to large industry-leading companies, or hubs, and their community of trading partners, or spokes.

Hubs. Companies in this category tend to be global, multi-divisional, decentralized organizations with complex computing environments and sophisticated enterprise applications software. These large companies often recommend or require their trading partners to implement integration services as the primary method of communicating commercial information and business documents. Often these integration service initiatives

coincide with a variety of extended enterprise and industry-specific initiatives to automate electronic trading of partner communications, including quick response, just-in-time manufacturing, vendor-managed inventory and efficient consumer response. Hub companies, as part of their integration service initiatives, will typically recommend a specific integration service provider and software to their trading partners. Hub companies also typically rely on the integration service provider to implement integration services with the hub’s trading partners, creating an opportunity for the integration service provider to establish customer relationships with the hub companies’ trading partners. An example of a hub company would be a large apparel retailer that utilizes some form of integration service to communicate with hundreds of apparel manufacturers.

Spokes. Companies in this category tend to be small to medium-size organizations that often seek to implement integration services in order to conduct business with one or more large trading partners. Many of these customers do not have a significant investment in technology, with some having as little as a personal computer with a dial-up connection. Spoke companies typically seek to implement integration services quickly with minimal effort and expense. An example of a spoke company would be a small consumer products manufacturer that is required to communicate through some type of integration service by a retailer selling the manufacturer’s products. After implementing integration services at the request of a hub, some spokes become hubs by utilizing integration services to communicate with their community of trading partners.

We believe that our ability to automate the exchange of essential business information between trading partners with dissimilar processes and applications adds value at each step of the supply chain. In a typical implementation, we will:

Under our business model, a trading partner is a mailbox on our network infrastructure used to facilitate transactions with other mailboxes on our network infrastructure or with mailboxes on another interconnected network infrastructure. One trading partner does not necessarily equal one customer, as a single customer may have multiple mailboxes. Our 20 largest hubs have between 500 and 4,500 trading partners each. A trading community is a collection of trading partners communicating via their respective mailboxes around a hub.

Our Business Strategy

Our goal is to grow profitably by providing transaction management infrastructure products and services with high returns on investment for our customers while remaining at the forefront of our industry. To achieve this objective, we intend to:

Our Product Solutions

As business-to-business e-commerce becomes increasingly strategic, the complexity of integrating and collaborating with business partners is growing exponentially. Over the past decade, businesses invested heavily in internally focused business systems. Today, businesses are extending their enterprise investments by strategically sharing processes with partners to gain competitive advantage. Through the automation of an

entire value chain, companies are streamlining cross-enterprise processes, such as price and promotions, global shipping, and electronic payments, resulting in greater agility, responsiveness and profitability.

The integration of supply chains across diverse businesses can be very complex. The variety of protocols and standards used to communicate continue to increase. Data structures and data transformation are becoming more sophisticated. Globalization is introducing new trading partners from regions around the world that suffer from a lack of experience and slow adoption of e-commerce processes.

To unlock the potential of business-to-business e-commerce and build a successful global extended enterprise, businesses need a partner with innovative adaptive solutions, broad skills and capabilities, and global reach. Our capabilities, solutions and reach allow businesses to effectively build and manage their extended enterprise and automate their entire supply chains. With over 35 years of experience, we are a proven leader of on-demand business-to-business e-commerce solutions that simplify and enhance business process integration and collaboration.

Fewer and fewer companies manage the entire manufacturing process from raw materials to finished product. Instead, the manufacturing process is distributed across the supply chain with different manufacturers owning the raw materials, component, assembly, and finished product aspects of the process. As a result, an increasing number of business processes are becoming cross-enterprise, including product design, development, manufacturing, and post-sales service and support. Even planning functions such as promotions, forecasting, and marketing are becoming increasingly collaborative. Our on-demand services streamline these cross-enterprise business processes by simplifying the ability to market, plan, order, manufacture, transport, settle and service across corporate boundaries. With on-demand services, businesses get maximum flexibility and economies of scale from a high-performance hosted solution.

We provide a comprehensive suite of offerings for customers seeking high-performance, cost-effective on-demand supply chain management solutions. We deliver our solutions globally on our next-generation integration services platform, the GXS Trading Grid^sm. Through the Trading Grid^sm, we provide an integrated suite of data communications and exchange, trading partner management, integration, data synchronization and application services. Our global solution portfolio for these services consist of our core product solutions, or Transact Solutions, and our value-added Monitor, Synchronize and Collaborate solutions.

Transact Solutions

Our core product solutions, or Transact Solutions, enable businesses to conduct electronic commerce with any supply chain partner in the world by enabling the electronic exchange of a high volume of business documents among our customers’ computer systems and those of their trading partners. Through our Transact Solutions, buyers and suppliers can exchange purchase orders, as well as the associated shipment notices, invoices, and payment instructions. Additionally, sales activity, sales forecasts, and inventory positions can be exchanged electronically. Revenues generated by our Transact Solutions are largely recurring in nature and contribute the majority of our revenues. Revenues from Transact Solutions were 61.0%, 64.0% and 63.6% of our total revenue for the years ended December 31, 2002, 2003 and 2004, respectively.

EDI is the predominant standard by which Transact Solutions are performed. EDI supplements or replaces traditional document transport media, including postal, fax, telephone and email systems. We provide Transact Solutions through our Trading Grid^sm in approximately 25 countries around the world. These Transact Solutions allow a trading partner to use the communications protocol of its choice. We add value by providing protocol conversion, security, authentication, audit and other transaction processing services, allowing customers to implement complex and secure electronic trading systems with little infrastructure or technology investment. The Trading Grid^sm processes both traditional EDI documents and documents developed using newer technologies such as Extensible Mark-up Language (XML). By using the Trading Grid^sm’s messaging services, customers are able to reduce the costs associated with managing business and technology variables associated with the exchange of data among a large number of trading partners that use

disparate applications and communications protocols. Today, we brand our core Transact Solutions within the Trading Grid^sm as follows:

Revenues derived from our Transact Solutions are primarily generated through recurring transaction processing fees. For most transactions, we charge a transaction processing fee to both the sending and the receiving party. During 2003, we initiated a concerted effort to move customers on month-to-month contracts for Transact Solutions toward multi-year contracts in exchange for pricing incentives. As a result of these efforts, approximately 60% of our top 2,000 customers are now committed to contracts with an average term of 31 months.

Our Transact Solutions also include integration software, which enables enterprises and small businesses to access the core messaging services. Our integration software enables customers to self-manage the exchange of information among disparate business systems and applications within and among enterprises by integrating internal applications, translating data to the required format (such as EDI or XML) and transporting that data through the Trading Grid^sm or directly to the receiving trading partner. Our integration software products include:

Monitor Solutions

Once e-commerce transactions are automated, it is critical for businesses to monitor and measure transactions with supply chain partners. Our Monitor Solutions allow for end-to-end visibility of business documents by monitoring supply and demand signals for quick response. Once the day-to-day supply chain process is automated, companies run the risk of not identifying problems with orders or shipments. Our monitor solutions allow businesses to monitor information flows in e-commerce transactions for critical supply (shipment delay) and demand (sales spike) signals. Near real-time monitoring of these events enables supply chain participants to take proactive measures to avoid out-of-stock situations or excess inventory positions.

Our Monitor Solutions include:

In late 2005, we anticipate introducing a third Monitor Solution called Inventory Visibility. This product will facilitate web-based inventory tracking for the exchange of point-of-sale and inventory position data.

Synchronize Solutions

Our Synchronize Solutions help customers accomplish product item validation and synchronization via a comprehensive suite of hosted services and application software. Our Synchronize Solutions enable multiple supply chain partners to exchange information about their products. The inability to effectively manage the growing volume of product data is a challenge for many leading retailers. Product data can include descriptions, dimensions, packaging configuration, and country of origin. Inconsistent and inaccurate product data creates significant disruptions and inefficiencies throughout a retailer’s internal systems and supply chain operations, and can lead to errors with orders, out-of-stock conditions and invoice discrepancies. Accurate product data, however, can significantly reduce inefficiencies and enhance the customer experience. The key for retailers in achieving and maintaining accurate and consistent data is to establish one streamlined process to synchronize product catalog information with their suppliers. As a result, data synchronization solutions can accelerate the introduction of new products; minimize impacts of product discontinuations; and optimize sales of existing products.

Data synchronization is quickly gaining acceptance in the consumer products and retail sectors because it allows a company to store, manage and exchange a wide variety of product information. Product information can include marketing descriptions, dimensions, transportation requirements, price or recycling instructions. It can also include other documents such as photographic images of the products or marketing materials. Although our Synchronize Solutions are currently used mainly by the consumer products and retail sectors, these solutions are equally applicable to other industries, including the automotive industry, and we expect the use of data synchronization to become more widespread in the future.

Our current Synchronize Solutions include:

In the near future, we expect our Synchronize Solutions to also permit price and promotion information to be stored, managed and exchanged.

Collaborate Solutions

Our Collaborate Solutions enable supply chain partners to work closely together to improve efficiencies or increase sales through joint forecasting, marketing and product development. Trading partner collaboration can include:

We primarily provide our Collaborate Solutions through strategic and technology partnerships. Our Collaborate Solutions partnerships currently include Tradebeam and iSupply, through which we offer a web-based solution for automotive original equipment manufacturers and their suppliers, and 7th Online, through which we offer a collaborative application used in the apparel and department store sector to perform seasonal assortment planning.

Advantage Services

Our Advantage Services provide a suite of community, professional, and managed services that help our customers maximize the benefits from on-demand supply chain management. These services complement our product solutions with people-based services to support the automation process, from consulting and design to implementation and integration to technical support. These services include business to business community management and outsourcing services. We maintain expertise and skills in the mapping, translation and technical support for communities of all sizes. Education, implementation, testing and ongoing technical support for our customers’ trading communities ensures that our customers’ trading partners can actively communicate and share information with each other. Advantage Services consist of three families of services: Professional Services, Community Link and Business Process Outsourcing.

Professional Services

We provide up-front consultation for our customers on how to design an effective business-to-business supply chain management program. We also advise on technical architecture design, modeling business processes and demonstrating a return on investment for new initiatives. Once the consulting and design process is complete, our professional services group helps to implement the solution on the customer’s premises. As necessary, we can customize the solution to integrate directly with our customer’s front and back office systems.

Community Link Services

After implementation at the hub, we then provide services to enable the trading partner community. These services include trading partner education, implementation and testing, as well as on-going technical support for the entire enabled trading community. Together with our distributors, we offer 24-hour, 7-day-a-week technical support in 20 different languages via the Web and telephone.

Business Process Outsourcing

Customers that prefer not to manage the day-to-day operations of their supply chain management programs can outsource those processes to us. Our Business Process Outsourcing services use our global data center footprint to offer outsourcing for customers of the management, execution and operation activities associated with on-demand electronic supply chain management. By outsourcing to us, customers minimize their up-front investment in software, hardware and other resources necessary to automate their information exchange processes. We provide a comprehensive outsourcing solution that includes data center operations, application hosting, mapping and translation, technical support, and our Community Link services.

Legacy Solutions

Our Legacy Solutions principally consist of applications and products developed for specific customers for use on our computing platforms and telecommunications network. For example, we offer a customized application for cash management systems used by banks that runs on our proprietary Mark III® platform. The application was originally written in the 1980s and continues to be used today. In addition to these customized applications and products, our managed network solutions enable customers to outsource the management and operations of network communications. Our managed network solutions include telecommunications management, monitoring and problem resolution, as well as the provision and installation of modems, routers and software that enable us to manage the customer’s infrastructure remotely. We do not consider our Legacy Solutions to be core to our business. Accordingly, we expect revenues from our Legacy Solutions, including our custom messaging and network solutions, or CMNS, to continue to decline as a percentage of our total revenues as we continue to de-emphasize and discontinue such services and emphasize our Transact, Monitor, Synchronize and Collaborate Solutions. We currently have approximately 4,300 customers for our CMNS, many of which also use our other products and services.

Customers

We serve a community with more than 100,000 trading relationships in a broad range of industries, including automotive, consumer products, high-technology, manufacturing and retail. Our customers currently include over 50% of the Fortune 500 companies and, upon completion of the proposed G International acquisition, we expect to count over 75% of the Fortune 500 companies as customers. This broad base ensures that we are not reliant on any individual customer or industry for a significant portion of our revenues. No one customer represented more than 10% of our revenues in 2002, 2003 or 2004. General Electric and its affiliates accounted for approximately 9.0% of our total revenues in both 2003 and 2004.

In 2004, we retained all of our significant hub customers and we had significant customer wins, including Dillard’s, Rite-Aid and Comcast. Additionally, we have been migrating our customers to multi-year contracts to maintain existing recurring revenue streams. We currently have approximately 60% of our top 2,000 customers committed to contracts with an average term of 31 months.

International Operations

We have a strong global presence across the Americas, Europe, Asia and Australia, including operations in approximately 25 countries. We generated 37.1%, 42.5% and 46.0%, respectively, of our revenues for each year in the three-year period ended December 31, 2004 from customers located outside of the United States, and 12.9%, 11.0% and 10.4%, respectively, of our assets as of December 31, 2002, 2003 and 2004 were located outside of the United States. We generated 11.8%, 14.2% and 15.9%, respectively, of our revenues for each

year in the three-year period ended December 31, 2004 from customers in the United Kingdom. In the future, we may significantly expand our international operations through geographic expansion and acquisitions.

Marketing and Sales

We market our products and services through our global sales force. Our sales efforts are generally aimed at senior purchasing executives, chief information officers and other primary decision makers within a potential customer organization. Our global sales force is organized along three lines: industry, geography and major account coverage. Our direct sales teams concentrate on developing new hub customers within a particular industry, focusing on the retail, consumer products, high-tech and automotive sectors, and region, as well as increasing the utilization and penetration of existing trading communities. Our telephone sales professionals focus primarily on signing up new spoke customers around a particular hub customer. Our sales teams are supported by a team of technical sales and marketing support personnel who assist in the sales process as needed. We have approximately 210 marketing, sales and sales support personnel.

Our direct sales cycle for hub customers typically takes approximately six to nine months from initial contact to contract signing. Approvals by decision makers from various branches of a potential customer’s organization are often required before a purchase can be completed. The sales cycle for telephone sales varies from several days to approximately three months. We believe the ability of our telephone sales team to address a large number of trading partners of our hub customers in a short time period differentiates us in the trading community sales process.

Our marketing activities are designed to enhance our brand name and the market awareness of our products through advertising, press releases and other media. We have product managers dedicated to each of our product lines who, together with our marketing communications group, focus on the development of and increasing awareness of specific products and services that we offer.

Customer Service

We view our relationships with customers as long-term partnerships in which customer satisfaction is crucial. For this reason, we apply an integrated approach to our sales, marketing and customer service functions. Through our customer relationships, we are able to achieve an in-depth understanding of a customer’s evolving transaction management infrastructure requirements and levels of service satisfaction. We believe that we provide superior customer service in terms of timely and accurate responsiveness. Based on these relationships, we are also able to pursue new revenue generating opportunities and provide product and service improvements for both new customers and customers previously overlooked or not adequately addressed.

We maintain a customer service center at our headquarters in Gaithersburg, Maryland and customer service centers and/or customer service representatives in various locations in Europe and Asia to support customers on a regional basis and to provide local technical support as necessary. Our customer service center in Gaithersburg also provides support to our other customer service centers and customer service representatives. Our customer service representatives, in the United States and elsewhere, include both call analysts, who are trained to identify and analyze customer problems, as well as skilled technical support teams trained to resolve complex technical problems.

Competition

We compete with numerous companies both nationally and internationally. Our competitors include large companies with substantially greater resources than us that compete in many market areas and small specialized companies that compete in a particular market niche. We also compete with the internal programming and information technology staffs of some major companies.

Our ability to compete successfully depends on multiple factors, both within and outside of our control. The principal factors are:

We believe that our solutions are generally competitive with regard to each of these factors.

Competition for our services ranges from large corporations to integration suites offered by software vendors and smaller technology consulting firms. We compete with paper-based communications, direct leased-line communications, fax-based solutions, public exchanges and other EDI service providers, including Inovis, Sterling Commerce and other, smaller companies. We also compete with providers of products and services based on alternative technologies to EDI such as IBM and Cyclone Commerce.

Our software products also compete with the products offered by Sterling Commerce, Inovis, IBM, SeeBeyond and Vitria.

Data Processing Infrastructure

We operate three data centers, located in Ohio, Hong Kong and The Netherlands. These data centers service customers on a regional basis and house our data processing infrastructure. Our computing infrastructure primarily operates on one of three systems: IBM z Series OS, UNIX or Mark III®. Mark III® is a legacy operating system we developed that runs on mainframe computers manufactured by Bull, S.A. We are in the process of migrating our EDI operations that currently run on Mark III® to other platforms. We are also in the process of evaluating migration of our customers to other, more open systems, such as Linux. We believe that our data processing infrastructure is sufficient to cost-effectively meet demand for the foreseeable future and to increase capacity as needed.

Our telecommunications infrastructure is a high-speed digital network that connects us to our customers and facilitates the transport of multiple protocols via private lines and the Internet. In the United States, our primary provider is AT&T with Equant serving as a backup provider. In Europe, Equant is our primary provider with AT&T serving as a secondary provider. We also engage additional providers in these and other jurisdictions, mainly in Asia. Our network providers provide us with diversity and enable us to further enhance the reliability and quality of our services for our customers.

In operating our data processing facilities, we have developed both capacity-planning and disaster recovery policies and practices. Our capacity planning operation monitors usage and trends and projects the capital resources needed to satisfy future needs. It performs this role for both our data processing and network communications infrastructure. We are party to disaster recovery agreements that provide alternative off-site computer systems for our UNIX, NT and IBM-based processing operations in the event of a disaster. For our Mark III®-based processing operations, we have a separate disaster recovery site as well as contingency plans which provide for the shifting of our processing operations among different segments of our Ohio data center and our data center in The Netherlands, if necessary. We have also taken precautions to protect ourselves and our customers from events that could interrupt delivery of our transaction processing services. These precautions include, among others, backup power generation equipment, fire protection and physical security systems and an early warning detection and fire extinguishing system.

Product Development

Our product development cycle is driven by technological evolution of new standards for the electronic exchange of information and compatibility with third-party software. To remain competitive, we are required to incorporate advances in technology and standards into our products continually. In addition, we must ensure

that our solutions are able to function with the latest versions of the third-party software that may be used by some of our customers. We schedule development for our products and services on a six to twelve-month cycle from inception to rollout. We have dedicated product development teams for each major product line. However, a common development process, focused on the quality of our products and services, is deployed across all development efforts. Our solutions focus on the reduction of defects, application reliability and on-time delivery. All new solutions are developed on the UNIX platform with development tools using Java and C++ programming languages. A separate, dedicated team of engineers focuses on the study and introduction of new transaction technologies such as XML, and new types of Internet communications protocols, such as SOAP and AS2.

In 2002, 2003 and 2004, we had expenditures of approximately $15.2 million, $9.1 million and $14.4 million, respectively, for research and development activities. In addition, we spent $26.9 million, $19.9 million and $14.7 million during 2002, 2003 and 2004, respectively, on the development of internal use software, which we capitalized. Although most of our products are developed internally, from time to time we have in the past, and may in the future, acquire software from or invest in companies or businesses that offer products or services that are complementary to our offerings.

On November 8, 2004, we announced a strategic partnership with webMethods, Inc. to jointly resell, develop and market end-to-end business integration solutions. The agreement will allow businesses to collaborate more effectively with their global vendors and partners. Central to the strategic relationship will be the use of webMethods Fabric, a leading suite of business integration software, in our Trading Grid^sm.

Alliances and Joint Ventures

Our PartnerGrid Program is designed to extend the value of the solutions we deliver to our global customer base. We partner with the world’s leading technology specialists to help our customers accomplish their business goals more quickly and effectively. Our partners provide software and hardware technology or consulting and implementation services to complement our industry-leading solutions.

We generally enter into partnerships with four types of partners:

In addition to our PartnerGrid Program, we have also partnered with various entities to form joint ventures outside of the United States to assist with the marketing and implementation of our products and services in a particular geographic region. For example, we have a joint venture with ABN AMRO Capital Investment Asia Limited to provide our products and local Transact Services in China. These partnerships are in addition to our foreign subsidiaries that provide marketing and implementation services in many countries.

Intellectual Property

To protect our intellectual property rights, we rely primarily on a combination of copyright, patent and trademark laws, trade secret protection and contractual provisions. We also routinely enter into nondisclosure and confidentiality agreements with our employees, contractors, consultants, vendors and customers to protect our proprietary rights. We have various rights to patents, trademarks, copyrights, trade secrets and other intellectual property directly related to and important to our business. We currently hold four United States Patents:

As part of our recent effort to expand our patent portfolio, we have filed 24 patent applications that improve upon our technology. In addition, as part of our acquisition of HAHT Commerce, in February 2004, we acquired three U.S. patent applications, which are not of material importance to our business and are being allowed to lapse. We hold registrations on trademarks and service marks on 23 separate marks that have been registered in a number of jurisdictions that we owned at the time of the recapitalization. All of these registered marks are related to legacy or discontinued products and services, and are not of material importance to our business. We acquired, as part of our acquisition of HAHT Commerce, 17 separate marks that have been registered in a number of jurisdictions, none of which are of material importance to our business. In addition, we have applied for registration of two additional marks that relate to products we currently market. We also acquired the rights to one additional Canadian and two U.S. registered trademarks as part of our acquisition of the Celarix assets in June 2003, none of which are of material importance to our business. Our policy is to apply for patents with respect to our technology and seek trademark registration of our marks from time to time when management determines that it is competitively advantageous and cost effective to do so. We have also been granted licenses for a number of third-party software products for our own use and for remarketing to our customers. Further, we believe that our unpatented research, development and engineering skills also make an important contribution to our business. We do not believe that any one single patent, patent application or license is material to the success of our business as a whole. However, in the aggregate these patents applications and licenses are material to our business.

In connection with the recapitalization, General Electric assigned, licensed or sublicensed, as the case may be, to us all intellectual property rights owned by General Electric that were used by us to operate our business. We also entered into a separate agreement under which General Electric granted us a license to use the GE monogram trademark on a non-exclusive, royalty-free basis. We have ceased using this trademark and the license has terminated.

Employees

As of March 1, 2005, we had approximately 1,360 full-time employees worldwide, including approximately 970 technical personnel engaged in maintaining or developing our products or performing related services, approximately 210 marketing, sales and sales support personnel and approximately 180 administrative, finance and management personnel. We also have approximately 90 call analysts and customer service support technicians worldwide. To attract and retain desired personnel, we offer competitive compensation and benefits packages and strive to maintain excellent employee relations. None of our U.S. employees are represented by a labor union. We have not experienced any work stoppages and consider our employee relations to be good.

In connection with our proposed acquisition of G International, all of the employees of G International in the United States will become our employees as of April 1, 2005 and we will enter into an agreement with G International pursuant to which G International will compensate us for the services provided to it by these employees.

Item 2.     Properties

We lease approximately 342,000 square feet of office space for our corporate headquarters located in Gaithersburg, Maryland. This lease expires in April 2014. However, we have the option to renew this lease for an additional 10 years, through April 2024, followed by two five-year renewal options. General Electric has guaranteed all of our obligations under this lease. In connection with the 2002 recapitalization, our indirect parent, Global Acquisition Company, was required to either replace General Electric as the guarantor or to indemnify General Electric for any obligations it may have under its guarantee. In place of such a guarantee or indemnity, we provided a letter of credit for General Electric’s benefit, in the amount of $7.5 million, under our revolving credit facility. As of December 31, 2004, approximately 60% of our office space is vacant and we are actively seeking to sublease some or all of this space.

Our main data center is a 104,000 square-foot facility located in Cleveland, Ohio. We also operate a 54,000 square-foot data center in Amsterdam, The Netherlands, and a 12,000 square-foot data center in Hong Kong, China. Other than our Ohio data center, which we own, our data centers are leased. These leases expire at various times between 2007 and 2013.

In addition, as of December 31, 2004, we had six sales offices in the United States and 14 sales offices in 11 foreign countries. We also maintain a customer service center at our headquarters in Gaithersburg, Maryland to support our customers in the Americas, and customer service centers and/or customer service representatives in various locations in Europe and Asia to support customers on a regional basis. We currently have sufficient space to meet our needs.

Item 3.     Legal and Other Proceedings

We are and may from time to time in the future become subject to legal proceedings and claims which arise in the normal course of our business. These routine litigation matters are usually settled or defended, depending on the circumstances of each claim. While any legal proceeding has elements of uncertainty, we do not believe, based on historical experience, that the amount of any liability incurred in connection with these types of claims would have a material effect on our financial condition or on the results of our operations.

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

Not applicable.

PART II

Not applicable.

Item 6.     Selected Financial Data

The following table presents our selected historical consolidated financial information. The historical consolidated financial information as of December 31, 2003 and 2004 and for each of the fiscal years ended December 31, 2002, 2003 and 2004 has been derived from, and should be read together with, our audited consolidated financial statements and the accompanying notes included elsewhere in this annual report. The selected financial data as of December 31, 2000, 2001 and 2002 and for the years ended December 31, 2000, 2001 and 2002 have been derived from our audited consolidated financial statements, not included in this annual report.

The financial data set forth below should be read together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”