##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
 Form 10-K
 ANNUAL REPORT PURSUANT TO
    SECTION 13 OR 15(d)
 OF THE SECURITIES EXCHANGE ACT
    OF 1934
  For The Fiscal Year Ended June 30, 2007
 Commission File Number: 0-26802
 CheckFree Corporation
 (Exact name of Registrant as
    specified in its charter)
  Delaware

58-2360335(State or other jurisdiction of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)  4411 East Jones Bridge Road
 Norcross, Georgia 30092
 (Address of principal executive
    offices, including zip code)
 (678) 375-3000
 (Registrants telephone
    number, including area code)
  Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Exchange on Which RegisteredCommon Stock, $.01 par value

Nasdaq Global Select MarketPreferred Stock Purchase Rights

Nasdaq Global Select Market   Securities registered pursuant to Section 12(g) of the
    Act: None.
  þ o
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2
 þ o o
  Rule 12b-2 o þ
      DOCUMENTS INCORPORATED BY REFERENCE




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##### 



Table
    of Contents
  PagePart
    IItem 1.


Business


3Item 1A.


Risk
    Factors


16Item 1B.


Unresolved Staff
    Comments


27Item 2.


Properties


27Item 3.


Legal
    Proceedings


28Item 4.


Submission of
    Matters to a Vote of Security Holders


29Part
    IIItem 5.


Market for the
    Registrants Common Equity, Related Stockholder Matters and
    Issuer Purchases of Equity Securities


30Item 6.


Selected Financial
    Data


33Item 7.


Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations


35Item 7A.


Quantitative and
    Qualitative Disclosures About Market Risk


73Item 8.


Financial
    Statements and Supplementary Data


73Item 9.


Changes in and
    Disagreements with Accountants on Accounting and Financial
    Disclosure


121Item 9A.


Controls and
    Procedures


121Item 9B.


Other
    Information


121Part
    IIIItem 10.


Directors,
    Executive Officers and Corporate Governance


122Item 11.


Executive
    Compensation


122Item 12.


Security Ownership
    of Certain Beneficial Owners and Management and Related
    Stockholder Matters


122Item 13.


Certain
    Relationships and Related Transactions, and Director
    Independence


122Item 14.


Principal
    Accountant Fees and Services


122Part
    IVItem 15.


Exhibits and
    Financial Statement Schedules


123Signatures


128EX-10.(A) 401K PLAN ADOPTION AGREEMENTEX-10.(K) AMENDED AND RESTATED NONQUALIFIED DEFERRED COMPENSATION PLANEX-21 SUBSIDIARIES OF THE COMPANYEX-23 CONSENT OF DELOITTE & TOUCHE LLPEX-24 POWER OF ATTORNEYEX-31.(A) SECTION 302 CERTIFICATION OF THE CEOEX-31.(B) SECTION 302 CERTIFICATION OF THE CFOEX-32.(A) SECTION 906 CERTIFICATION OF THE CEOEX-32.(B) SECTION 906 CERTIFICATION OF THE CFO   2




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##### Table of Contents



Part I  Item 1.
    Business  All references to we, us,
    our, CheckFree or the
    Company in this Annual Report on
    Form 10-K
    mean CheckFree Corporation and all entities owned or controlled
    by CheckFree Corporation, except where it is made clear that the
    term means only the parent company.
  We own many trademarks and service marks.  This
    Annual Report on
    Form 10-K
    contains trade dress, trade names and trademarks of other
    companies. Use or display of other parties trademarks,
    trade dress or trade names is not intended to, and does not,
    imply a relationship with the trademark or trade dress owner.
  Overview
    (e-bills). e-bills.
    sm
  Pending
    Acquisition of CheckFree
   3




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SHAREHOLDERS ARE URGED TO READ THE PROXY STATEMENT AND OTHER
    RELEVANT MATERIALS FILED WITH THE SEC AND POSTED TO OUR WEBSITE
    REGARDING IMPORTANT INFORMATION ABOUT THE PROPOSED
    TRANSACTION.
    Form 10-K,
  Electronic
    Commerce Division
  Introduction.
  
    review bank accounts;
    receive and pay bills over the Internet; and
    pay billers directly through biller-direct sites, by telephone
    or through our walk-in retail agent network.  www.mycheckfree.com
    Industry Background. e-bills e-bills e-bills
   4




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##### Table of Contents



Products and Services. sm ® sm tm sm tm e-bill
  
    CheckFree Web.  Consumers can pay anyone
    by accessing our service through various CSPs. Some of our
    largest CSPs, as determined by type of CSP and number of
    consumers using our products, are Bank of America, PNC Bank,
    SunTrust Banks, Wachovia Bank, USAA, Washington Mutual and
    U.S. Bank. Once a consumer has accessed the system, he or
    she can either elect to pay an electronic bill delivered by us
    or can instruct the system to pay any individual or company
    within the United States. We complete this payment request
    either electronically, using the Federal Reserves
    Automated Clearing House (ACH), or in some instances
    other electronic methods such as MasterCards RPPS service
    or Visa ePay, or by issuing a paper check or draft.  
    Automated Clearing House.  The Federal
    Reserves ACH is the primary batch-oriented electronic
    funds transfer system financial services organizations use to
    move funds electronically through the banking system. We access
    the ACH through an agreement with SunTrust Banks. Additional
    information on the ACH can be found at the Federal Reserve
    Commissions website at www.federalreserve.gov.
    Paper Checks or Drafts.  When we are
    unable to move the funds electronically, we issue a paper check,
    drawn on our trust account, or a paper draft, drawn on the
    consumers bank account.
    Payment Method Selection.  Our Genesis
    system incorporates our patented technology that determines the
    preferred method of payment to balance processing costs,
    operational efficiencies and risk of loss. We have been able to
    manage our risk of loss by using this technology to adjust the
    mix of electronic and paper transactions in individual cases
    such that, overall, we have not incurred losses in excess of
    0.88% of our revenues in any of the past five years. The rate
    increased this last fiscal year due to our largest CSP customer
    moving to our standard risk-based processing during the quarter
    ended March 31, 2006.  sm just-in-time
 5




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
    Corillian Voyager.  Corillian Voyager is
    a software platform upon which we have built a menu of
    applications to support multiple lines of business within
    banking. Corillian Voyager has been designed to be highly
    scalable to meet the evolving needs of our customers. We
    currently support more than 20 million users on a single
    instance of Corillian Voyager for our largest customer and can
    support even larger volumes. In addition, Corillian Voyager has
    been designed using universal standards, including eXtensible
    Markup Language for communication and Open Financial Exchange
    for financial transactions. This architecture enables our
    customers to deploy new Internet-based financial services by
    adding applications to our platform at any time and by
    integrating future applications to any Internet connected
    point-of-presence.
    Line of Business Applications.  We offer
    consumer banking, small business banking, corporate banking,
    credit card management and wealth management applications.
    Enterprise Applications.  We offer a
    number of applications that can be utilized across lines of
    business, including Corillian Payments, Corillian Alerts,
    Corillian eStatements, Corillian OFX, Corillian Personal Money
    Manager, ACH and Wire Transfers, Enterprise Entitlements,
    Corillian Security Solutions and MultiPoint Integrator.
    Professional Services.  We offer a
    variety of professional services designed to fulfill our
    customers needs throughout the process of product design,
    implementation and operation. Our services include:
    implementation services, hosting services, consulting services,
    support services, directory management services and training
    services.
    Electronic Billing or
    e-bill
    Services.  As of June 30, 2007, consumers
    could view 326 different
    e-bills
    through CSP websites or directly at our website. The following
    billers are some of our largest electronic billing customers, as
    determined by the number of consumers viewing and paying their
    e-bills: JC
    Penney Card Services, AT&T, Sams Club Credit,
    Macys, Home Depot Consumer Accounts, Lowes Consumer
    Credit Card, Sprint PCS, Verizon Corporation and Chevron. Actual
    e-bills
    delivered in the fourth quarter ended June 30, 2007,
    reached nearly 61 million, which is an increase of 3% over
    the approximately 59 million
    e-bills
    distributed in the third quarter ended March 31, 2007, and
    an increase of 22% over the approximately 50 million
    e-bills
    delivered in the fourth quarter ended June 30, 2006. For
    the year ended June 30, 2007, we delivered approximately
    226 million
    e-bills.
    Walk-in Payment Services.  We offer
    walk-in payment services, also known as
    CheckFreePaytm,
    at more than 11,500 retail agent locations throughout the United
    States. CheckFreePay combines the agent footprint with our
    current electronic billing and payment infrastructure to offer
    billing organizations a wider number of payment processing
    services from a single company.
    Phone Payment Services.  We offer
    payment services to billers over an interactive voice response
    (IVR) system. This service, called CheckFree
    Pay-by-Phonetm,
    allows billers to provide an additional, convenient method for
    their customers to pay bills, while reducing costs associated
    with those customers contacting their call center or using other
    more expensive payment methods.
    Revenue Enhancement.  Revenue
    Enhancement (RevE), which we acquired from Carreker
    in April 2007, is a highly specialized consulting service
    focused on tactical methods of increasing banks fee
    income. Our solutions involve developing strategies that enable
    our clients to take advantage of electronification trends. Our
    Customer Value Enhancement solutions, which include software,
    proprietary sales management and methodologies and sales
    training programs, assist financial institutions in leveraging
    central intelligence with local insight, translating strategy
    into specific actions to achieve sustained organizational
    performance.
    Other Products and Services.  In
    addition to the above, the Electronic Commerce Division offers a
    credit card account balance transfer product, a credit card
    balance refund product, an automated recurring payments and
    software service, which is primarily installed at health clubs
    throughout the United States, and other forms of wholesale and
    retail payment solutions. 6




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Usage Metrics. e-bills, e-bills
  The CheckFree Advantage.
  
    Scalable Genesis Platform.  The Genesis
    platform is an open infrastructure created to process
    e-bills and
    payments. The vast majority of the payment transactions are
    processed using our Genesis platform, enabling us to improve our
    economies of scale. We also operate processing platforms for
    other aspects of our business including Health &
    Fitness (recurring debits for health club fees), CheckFreePay
    (for walk-in payments) and CheckFree
    Pay-by-Phone
    (for IVR payments).
    Sigma Quality.  We follow an internal
    Sigma quality program, which links key drivers of customer
    satisfaction to an internal set of metrics of system
    availability and payment accuracy and timeliness. The program is
    designed to take our quality performance to 99.9%, or 4.6 Sigma.
    The performance and compensation of many employees within the
    Electronic Commerce Division are tied to the achievement of
    process and system improvements that enhance customer
    satisfaction.
    Electronic Payment Rate.  Electronic
    payments are more efficient than paper payments, less expensive
    to process, and result in fewer errors and customer inquiries.
    As of June 30, 2007, we completed approximately 84% of our
    payments electronically. In addition to sending a large majority
    of our payments electronically, we also have established links
    to major billers that enable a more efficient flow of
    information and funds to them.
    Experienced Customer Care.  We have
    approximately 1,100 customer care staff primarily located in
    facilities in Phoenix, Arizona; Dublin, Ohio; and Aurora,
    Illinois. The level and types of customer care services we
    provide vary depending upon the consumers or CSPs
    requirements. We provide both first- and second-tier support.
    When we provide second-tier customer support, we provide payment
    research and support, and the CSP handles its own inbound
    customer calls. To maintain our customer care standards, we
    employ extensive internal monitoring systems, conduct ongoing
    customer surveys and provide comprehensive training programs.
    Real-Time Payment Processing.  We offer
    billers the option of a real-time payment solution,
    meaning that billers can receive customer payment information as
    soon as payments are made at one of our retail agent locations,
    through an IVR application, or over the Internet, assuring that
    unnecessary service shut-offs of customers who pay their bills
    at the last minute are avoided. Real-time payments also have the
    advantage of minimizing calls to a billers call center by
    providing the billers customer with the confidence that
    the biller has received the payment as soon as it is completed.
    Highly Scalable and Extensible Software
    Platform.  The Corillian software platform has
    been designed to be highly scalable to meet the evolving needs
    of our customers. Independent laboratory test results indicate
    that Corillian Voyager can support Internet banking programs for
    more than 20 million users. In addition, Corillian Voyager
    has been designed using universal standards, including
    eXtensible Markup Language for communication and Open Financial
    Exchange for financial transactions. This architecture enables
    our customers to deploy new Internet-based financial services by
    adding applications to our platform at any time and by
    integrating future applications with any Internet connected
    point-of-presence.  Our Business Strategy.
 7




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
    Drive increased adoption of electronic commerce services
    by consumers.We believe that consumers will
    continue to move their financial transactions from traditional
    paper-based to electronic methods if they have an
    easy-to-access, easy-to-use, secure, and cost-effective method
    for receiving and paying their bills electronically. To drive
    this transition, we make our electronic bill presentment and
    payment services available directly through CSPs and through
    biller sites so that
    e-bills are
    available wherever consumers feel most comfortable viewing and
    paying them. We also price our services to our customers in such
    a way as to facilitate their offering electronic billing and
    payment to a broad array of consumers. CSPs and billers pay us
    mainly for the number of transactions we process, plus typically
    a fee based on the number of their consumers enabled to use our
    system. The price charged to the CSP or biller for each consumer
    or each transaction may vary depending on:  
    the services provided to the consumers;
    the nature of the transactions processed; and
    the volume of consumers or transactions, or both.    
    Continue to improve operational efficiency and
    effectiveness.  We believe that as our
    business grows and the number of transactions we process
    increases, we will continue to be able to take advantage of
    operating efficiencies associated with increased volumes,
    thereby reducing our unit costs. Our Sigma quality program, high
    electronic payment rate, consolidation of platforms, the
    scalability of our systems and high-quality customer care
    centers all help us achieve greater efficiencies.
    Drive new forms of electronic commerce
    services.  We intend to leverage our
    infrastructure and distribution channels to address the
    requirements of consumers and businesses in new electronic
    commerce applications. For example, through CheckFreePay (our
    walk-in bill payment business) and CheckFree
    Pay-by-Phone,
    we now offer a more complete suite of payment services to meet
    the needs of consumers and billers. In addition, our core
    payment and processing network manages person-to-person and
    small business payments. The Corillian online banking platform
    creates an opportunity to offer a wider variety of new products
    and services through CSPs.  Technology, Research and
    Development. dial-up
 8




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Sales, Marketing and Distribution.
      Competition.
  e-bill
 9




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Seasonality.
  Acquisitions.
  Software
    Division
    
    Global Treasury.  We provide ACH,
    account reconciliation and compliance software and services
    primarily to banks and bank holding companies. ACH is the
    primary batch-oriented electronic funds transfer system
    financial services organizations use to move funds
    electronically through the banking system. More than 75% of the
    nations 16 billion ACH payments are processed each
    year through institutions using our software systems. 10




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® tm
  tm
  tm tm tm tm
  
    Reconciliation and Exception
    Management.  We provide software and related
    consulting services that enable organizations to reduce
    operational risk, improve operational efficiency and contribute
    to increasing profitability. Banks, bank holding companies,
    securities and insurance firms, corporations, and government
    agencies use our Reconciliation and Exception Management
    products and services. These solutions are marketed under four
    distinct brands. CheckFree
    RECON-Plustm
    for
    Windows®
    and CheckFree RECON
    Securitiestm
    reconcile high volumes of complex transactions that are spread
    across multiple internal and external systems and include
    securities transaction processing, automated deposit
    verification, consolidated bank account reconciliation and cash
    mobilization, and improved cash control. CheckFree
    Frontier®
    is a multi-tier reconciliation system that operates via a
    Web-based architecture. In April 2005, we acquired Accurate
    Software, Ltd., whose Accurate
    NXGtm
    software provides a comprehensive, enterprise-wide operational
    control framework and system for reconciliation, exception
    management, workflow and business intelligence.
    Transaction Process Management.  During
    the year ended June 30, 2007, through our Software
    Division, we provided software that enables the management,
    monitoring and measurement of the flow of securities and cash
    transactions across a local or global enterprise. Securities
    firms, insurance companies, custodian banks, brokerage firms and
    asset managers use our financial messaging and corporate actions
    products and services. These products are marketed under the
    names CheckFree
    TradeFlowtm,
    CheckFree Message
    Brokertm,
    CheckFree Message
    Workstationtm
    and CheckFree
    eVenttm.
    CheckFree TradeFlow provides complete straight-through
    processing (STP) of post-trade processes. Trade order management
    systems, portfolio management packages and links to brokers and
    custodians are integrated with CheckFree TradeFlow, a SWIFTReady
    Gold accredited platform which serves as a comprehensive STP
    solution. CheckFree Message Broker is a middleware system, and
    CheckFree Message Workstation enables the preparation,
    validation, repair and review of messages in a system to monitor
    and manage transaction flows, including all messages related to
    any one particular transaction. CheckFree eVent automates the
    end-to-end corporate actions processes. The system automates the
    electronic receipt of notifications and provides online
    management facilities to manage the process from end-to-end.
    TradeFlow TPM
    2.0tm,
    enables securities firms to manage transaction processing across
    an enterprise via a single, integrated platform. On July 1,
    2007, after our 2007 fiscal year-end, all of CheckFrees
    securities-focused software solutions, including our Transaction
    Process Management solutions, officially became part of our
    Investment Services Division as a newly-formed group within that
    division called CIS Software.
    Electronic Billing.  CheckFree i-Series
    software enables billers to create online bills and statements
    and distribute them to their customers for viewing and payment.
    Our software and outsourced application hosting services provide
    e-bill and
    e-statement
    creation and delivery,
    e-bill
    payment 11




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transaction management, security, tracking and history, online
    marketing from the biller to its customers, and customer care.  
    Global Payments Technology (GPT)
    Solutions.  Lines of business acquired from
    Carreker in April 2007 help financial institutions address
    critical payment services and delivery functions that impact
    overall operating revenues, costs and risk management for our
    client base. These lines of business include Payments, Risk,
    Cash and Logistics and Global Payments Consulting
    (GPC).  
    GPT Payments.  We provide a variety of
    solutions that enable financial institutions to process and
    manage a variety of payment types. Some of the payments
    functions include presentment of checks in paper and electronic
    form, identification and mitigation of fraudulent payments,
    handling irregular items such as checks returned unpaid
    (exceptions), maintaining a record of past transactions
    (archiving), responding to related customer inquiries
    (research), and correcting any errors that are discovered
    (adjustments). Additionally, this line of business also enables
    our clients to improve operational efficiency through a gradual
    transition from paper to electronic-based payment systems.
    GPT Risk.  We offer solutions that
    mitigate depository account risk through profiling and advanced
    analytics technology. These solutions leverage transaction
    monitoring and filtering capabilities for Anti-Money Laundering
    (AML) and Office of Foreign Assets Control
    (OFAC) compliance.
    GPT Cash and Logistics.  We offer
    technology solutions that optimize the inventory management of a
    banks cash stock levels and logistical service
    requirements, including managing how much cash is needed, when
    it is needed and where it is needed. Our solutions reduce the
    amount of cash banks need to hold in reserve accounts and as
    cash-on-hand
    while ensuring a high level of customer service through timely
    replenishment of Automated Teller Machine (ATM) cash
    supplies at minimal logistical services cost.
    Global Payments Consulting (GPC).  We
    offer consulting services which help financial institutions
    proactively plan, prepare and optimize for the regulatory,
    competitive and technological impacts affecting the financial
    payments environment. GPC provides strategic planning, program
    management, specialized tools, business applications and
    implementation advisory services for financial institutions and
    specialized payments clients.  Licenses.
  Maintenance, Support and Consulting
    Services.
  Sales, Marketing and Distribution.
  Competition.
   12




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Seasonality.
  Acquisitions.
  Investment
    Services Division
  Introduction.
    sm ® ®
  Industry Background.
  Products and Services.
   13




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Technology.
  sm
    Sales, Marketing and Distribution.
  Competition.
  Acquisitions.
 14




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Government
    Regulation
       15




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Intellectual
    Property Rights
  and/or
  Employees
    Available
    Information
  www.checkfreecorp.com Form 10-K, Form 10-Q, Form 8-K www.checkfreecorp.com
 Item 1A.  Risk
    Factors    Risks
    Related to the Proposed Merger with Fiserv
  The
    announced merger with Fiserv may adversely affect the market
    price of our common stock and our results of
    operations.
   16




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If the
    merger does not occur, we will not benefit from the expenses we
    have incurred in preparation for the merger.
    Risks
    Related to Our Business
  The
    market for our electronic commerce services is evolving and may
    not continue to develop or grow rapidly enough for us to sustain
    profitability.
    Our
    future profitability depends upon our ability to implement our
    strategy successfully to increase adoption of electronic billing
    and payment methods.
    
    drive consumer awareness of electronic billing and payment;
    encourage consumers to sign up for and use the electronic
    billing and payment services offered by our distribution
    partners;
    address consumer concerns regarding privacy and security of
    their data in using electronic billing and payment services;
    continue to refine our infrastructure to handle seamless
    processing of transactions;
    continue to develop state-of-the-art, easy-to-use technology;
    increase the number of bills we can present and pay
    electronically; and
    successfully integrate Corillian online banking applications
    with CheckFrees electronic billing and payment services.   17




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Competitive
    pressures we face may have a material adverse effect on
    us.
      e-bill
     18




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Security
    and privacy breaches in our electronic transactions may damage
    customer relations and inhibit our growth.
    
    cause our customers to lose confidence in our services;
    deter consumers from using our services;
    harm our reputation;
    expose us to liability;
    increase our expenses from potential remediation costs; and
    decrease market acceptance of electronic commerce transactions.      We rely
    on third parties to distribute our electronic commerce and
    investment services products, which may not result in widespread
    adoption.
   19




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Consolidation
    in the financial services industry may adversely affect our
    ability to sell our electronic commerce services, investment
    services and software.
    
    current and potential customers;
    business opportunities, if combined financial services
    organizations were to determine that it is more efficient to
    develop in-house services similar to ours or offer our
    competitors products or services; and
    revenue, if combined financial services organizations were able
    to negotiate a greater volume discount for, or discontinue the
    use of, our products and services.  We may be
    unsuccessful in integrating acquisitions, which could result in
    increased expenditures or cause us to fail to achieve
    anticipated cost savings or revenue growth.
    One
    customer accounts for a significant percentage of our
    consolidated revenues.
    If we do
    not successfully renew or renegotiate our agreements with our
    customers, our business may suffer.
      Our
    future profitability depends on a decrease in the cost of
    processing payment transactions.
   20




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We
    experience seasonal and other fluctuations in our revenues
    causing our operating results to fluctuate.
        The
    transactions we process expose us to fraud and credit
    risks.
    
    insufficient funds;
    unauthorized use;
    stop payment orders;
    payment disputes;
    closed accounts;
    theft;
    frozen accounts; and
    fraud.     21




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If we, or
    our implementation partners, do not effectively implement our
    solutions acquired from Corillian, we may not achieve
    anticipated revenues or gross margins.
      We may
    experience significant losses due to our reliance on agents for
    walk-in payment services.
    We may
    experience breakdowns in our processing systems that could
    damage customer relations and expose us to liability.
    
    fire;
    natural disaster;
    pandemic outbreak;
    unauthorized entry;
    power loss;
    telecommunications failure;
    computer viruses;
    terrorist acts; and
    war. 22




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We may
    experience software defects, computer viruses and development
    delays, which could damage customer relations, decrease our
    potential profitability and expose us to liability.
    
    additional development costs;
    diversion of technical and other resources from our other
    development efforts;
    loss of credibility with current or potential customers;
    harm to our reputation; or
    exposure to liability claims.    Our
    products and services must interact with other vendors
    products, which may result in system errors.
    If we do
    not respond to rapid technological change or changes in industry
    standards, our services could become obsolete and we could lose
    our customers.
    We may be
    unable to protect our intellectual property and technology,
    permitting competitors to duplicate our products and
    services.
   23




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Our
    business could become subject to increased government
    regulation, which could make our business more expensive to
    operate.
      Our
    walk-in payment business is subject to government regulation and
    any violation of such regulations could result in civil or
    criminal penalties or a prohibition against providing money
    transmitter services in particular jurisdictions.
   24




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##### Table of Contents



A weak
    economy could have a materially adverse impact on our
    business.
    Our
    quarterly operating results fluctuate and may not accurately
    predict our future performance.
    
    changes in our pricing policies or those of our competitors;
    loss of customers due to competitors or in-house solutions;
    relative rates of acquisition of new customers;
    seasonal patterns;
    delays in the introduction of new or enhanced services, software
    and related products by us or our competitors or market
    acceptance of these products and services; and
    other changes in operating expenses, personnel and general
    economic conditions.    Risks
    Related to Our Common Stock
  Our
    common stock has been volatile since December 31,
    2000.
    
    actual or anticipated fluctuations in our operating results;
    actual or anticipated fluctuations in our transaction and
    consumer growth;
    announcements by us, our competitors or our customers;
    announcements of the introduction of new or enhanced products
    and services by us or our competitors;  
    announcements of joint development efforts or corporate
    partnerships in the electronic commerce market;  
    market conditions in the banking, telecommunications, technology
    and other emerging growth sectors;
    rumors relating to our competitors or us; and
    general market or economic conditions. 25




---



##### Table of Contents



Availability
    of significant amounts of our common stock for sale in the
    future could adversely affect our stock price.
    
    up to 6,143,599 shares available for issuance under our
    stock option and stock incentive plans, under which there are
    (1) outstanding options to purchase 2,937,117 shares
    of our common stock, of which options for 2,582,236 shares
    were fully vested and exercisable at an average weighted
    exercise price of approximately $31.52 per share, and
    (2) 797,383 outstanding shares of restricted stock;
    issued warrants to purchase 7,500,000 shares of our common
    stock, of which warrants for 3,500,000 shares were fully
    vested and exercisable at a weighted exercise price of
    approximately $29.90 per share; and
    up to 1,929,424 shares available for issuance under our
    Associate Stock Purchase Plan.    
    Microsoft, which held 8,567,250 shares;
    The former members of Integrion Financial Network, L.L.C.
    (Integrion) and their assignees collectively held
    warrants to purchase up to 1,500,000 shares, which warrants
    were fully vested and exercisable;
    Bank One, which held warrants to purchase 1,000,000 shares,
    which warrants were fully vested and exercisable; and
    Bank of America, which held 450,000 of the vested Integrion
    warrants and additional warrants to purchase up to
    5,000,000 shares, 4,000,000 of which warrants were not
    currently vested, and expire on September 30, 2010.      Anti-takeover
    provisions in the merger agreement with Fiserv, our
    organizational documents and Delaware corporation law make any
    change in control more difficult.
     26




---



##### Table of Contents




    division of our board of directors into three classes serving
    staggered three-year terms;
    removal of our directors by the stockholders only for cause upon
    80% stockholder approval;
    prohibiting our stockholders from calling a special meeting of
    stockholders;
    ability to issue additional shares of our common stock or
    preferred stock without stockholder approval;
    prohibiting our stockholders from unilaterally amending our
    certificate of incorporation or by-laws except with 80%
    stockholder approval; and
    advance notice requirements for raising business or making
    nominations at stockholders meetings.      Item 1B.
    Unresolved
    Staff Comments.    Item 2.
    Properties.      
    101,000 square feet in Phoenix, Arizona;
    100,000 square feet in Hillsboro, Oregon;
    78,000 square feet in Aurora, Illinois;
    43,000 square feet in Wallingford, Connecticut;
    43,000 square feet in Norcross, Georgia;
    16,000 square feet in Houston, Texas;
    10,000 square feet in Toledo, Ohio;
    7,000 square feet in Ansonia, Connecticut;
    5,000 square feet in Herndon, Virginia;
    5,000 square feet in New York, New York;
    4,000 square feet in Omaha, Nebraska;
    2,000 square feet in Shelton, Connecticut; and 27




---



##### Table of Contents




    1,000 square feet in Overland Park, Kansas.    
    56,000 square feet in Jersey City, New Jersey;
    21,000 square feet in Newark, New Jersey;
    15,000 square feet in Chicago, Illinois;
    9,300 square feet in Boston, Massachusetts;
    7,000 square feet in Los Angeles, California;
    5,000 square feet in San Diego, California; and
    1,000 square feet in Cleveland, Ohio.    
    72,000 square feet in Dallas, Texas;
    40,000 square feet in Charlotte, North Carolina;
    26,000 square feet in Owings Mills, Maryland;
    22,000 square feet in Norcross, Georgia;
    22,000 square feet in Memphis, Tennessee;
    13,000 square feet in Wokingham, Berkshire, United Kingdom;
    11,000 square feet in London, United Kingdom;
    2,000 square feet in North Sydney, New South Wales,
    Australia; and
    935 square feet in Windhof, Luxembourg.    
    227,000 square feet in Norcross, Georgia; and
    230 square feet in Henderson, Nevada  12-year
    Item 3.
    Legal
    Proceedings.  Skubella v.
    CheckFree Corporation, et al. No. 1:07-CV-0796-TWT, Gattelaro v. CheckFree
    Corporation, et al. No. 1:07-CV-0945-TWT, Rule 10b-5
 28




---



##### Table of Contents



Borroni v. Peter Kight, et al. No. 1:07-CV-1382-TWT,
    Item 4.
    Submission
    of Matters to a Vote of Security Holders.   29




---



##### Table of Contents



Part II  Item 5.
    Market
    for the Registrants Common Equity, Related Stockholder
    Matters and Issuer Purchases of Equity Securities.    Common Stock PriceFiscal Period

High


LowFiscal 2006First Quarter

$
41.60


$
32.33Second Quarter

$
50.55


$
34.89Third Quarter

$
55.42


$
42.56Fourth Quarter

$
57.08


$
44.28Fiscal 2007First Quarter

$
50.28


$
33.28Second Quarter

$
44.74


$
36.63Third Quarter

$
42.65


$
35.24Fourth Quarter

$
41.41


$
33.44Fiscal 2008First Quarter (through
    August 20, 2007)

$
46.10


$
35.96          30




---



##### Table of Contents



(c)


(d)(a)


(b)


Total Number of Shares


Approximate Dollar ValueTotal Number


Average


Purchased as Part of


of Shares that May Yetof Shares


Price Paid


Publicly Announced


Be Purchased Under thePeriod

Purchased


per Share


Plans or Programs


Plans or ProgramsApril 1, 2007 to
    April 30, 2007






N/A






$
50,000,000May 1, 2007 to May 31,
    2007






N/A






$
50,000,000June 1, 2007 to June 30,
    2007






N/A






$
50,000,000Total





$







$
50,000,000  31




---



##### Table of Contents



Performance
    Graph
    COMPARISON
    OF 5 YEAR CUMULATIVE TOTAL RETURN*
  Among
    CheckFree Corporation, The NASDAQ Composite Index
 And The
    S&P SuperCap Data Processing &Outsourced
    Services
  
  *
    
    $100 invested on 6/30/02 in stock or index-including
    reinvestment of dividends.   6/30/02

6/30/03

6/30/04

6/30/05

6/30/06

6/30/07CheckFree Corporation

$
100.00


$
179.03


$
191.82


$
217.77


$
316.88


$
257.03NASDAQ Composite

$
100.00


$
109.91


$
139.04


$
141.74


$
155.82


$
191.32S&P SuperCap Data
    Processing & Outsourced Services

$
100.00


$
81.82


$
96.12


$
96.29


$
114.15


$
133.62  32




---



##### Table of Contents



Item 6.
    Selected
    Financial Data.    Year Ended June 30,2007


2006


2005


2004


2003(In thousands, except per share data)Consolidated Statements of
    OperationsRevenues:Processing and servicingThird parties

$
809,814


$
735,840


$
627,541


$
481,589


$
390,944Related parties(a)






18,236



33,000



41,500



78,981Total processing and servicing


809,814



754,076



660,541



523,089



469,925License fees


46,209



35,196



28,458



23,912



24,163Maintenace fees


55,217



42,218



31,231



28,271



25,733Professional fees


61,404



47,912



29,617



23,955



24,949Total revenues


972,644



879,402



749,847



599,227



544,770Expenses:Cost of processing, servicing and
    support


401,176



342,535



296,912



244,429



237,598Research and development


112,077



101,854



80,039



64,035



50,658Sales and marketing


98,459



87,418



69,106



50,783



56,146General and administration


79,057



61,948



57,486



43,724



38,091Depreciation and amortization


90,937



99,530



175,719



176,430



224,297In-process research and development














324



Impairment of intangible assets(b)


















10,228Reorganization charge(c)










5,585







1,405Total expenses


781,706



693,285



684,847



579,725



618,423Income (loss) from continuing
    operations before other income and expenses


190,938



186,117



65,000



19,502



(73,653
)Other:Equity in net loss of joint
    venture(d)


(1,078
)


(3,100
)


(2,984
)


(593
)


Interest income


12,693



13,441



8,809



5,693



7,327Interest expense


(3,099
)


(986
)


(1,094
)


(13,164
)


(12,975
)Gain (loss) on investments(e)










592







(3,228
)Income (loss) from continuing
    operations before income taxes and cumulative effect of
    accounting change


199,454



195,472



70,323



11,438



(82,529
)Income tax expense (benefit)


75,016



74,455



24,560



1,088



(33,156
)Income (loss) before cumulative
    effect of accounting change


124,438



121,017



45,763



10,350



(49,373
)Cumulative effect of accounting
    change(f)


















(2,894
)Income (loss) from continuing
    operations


124,438



121,017



45,763



10,350



(52,267
)Earnings from discontinued
    operations before income taxes (including gain on disposal of
    $12,821 in FY 2006)(g)






14,310



1,518



292



133Income tax expense on discontinued
    operations






8,064



480



107



50Income from discontinued operations






6,246



1,038



185



83Net income (loss)

$
124,438


$
127,263


$
46,801


$
10,535


$
(52,184
)Diluted net income (loss) per
    common share

$
1.37


$
1.36


$
0.50


$
0.11


$
(0.59
)Weighted average shares
    outstanding(h)


90,896



93,708



92,915



91,864



88,807Consolidated Balance Sheet
    Data:Working capital

$
51,529


$
382,334


$
339,271


$
263,813


$
304,286Total assets


2,131,278



1,758,029



1,569,916



1,548,932



1,587,270Long-term obligations, less current
    portion


68,021



28,432



25,389



25,504



176,692Total stockholders equity


1,507,502



1,483,635



1,336,415



1,299,182



1,268,149  33




---



##### Table of Contents



,
       34




---



##### Table of Contents



Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Overview
      
    Electronic Commerce;
    Software; and
    Investment Services.    
    review bank accounts,
    receive and pay bills over the Internet; and
    pay billers directly through biller-direct sites, by telephone
    or through our walk-in retail agent network.  (e-bills). e-bills. e-bills e-bills
      Recent
    Developments
  Shareholders are urged to read the
    proxy statement and other relevant materials filed with the SEC
    and posted to our website regarding important information about
    the proposed transaction. Form 10-K,
 35




---



##### Table of Contents



Executive
    Summary
    
    Our acquisition of substantially all of the assets of Upstream
    Technologies LLC (Upstream) for $28 million in
    cash in May 2007, and for which we incurred $0.9 million of
    integration-related costs through June 30, 2007;
    Our acquisition of Corillian Corporation (Corillian)
    for $245 million in cash in May 2007, and for which we
    incurred $2.6 million of integration-related costs through
    June 30, 2007;
    Our acquisition of Carreker Corporation (Carreker)
    for $206 million in cash in April 2007, and for which we
    incurred $2.6 million of integration-related costs through
    June 30, 2007;
    The vesting of one million performance-based warrants held by a
    customer, resulting in a non-cash charge of $11.0 million
    against revenue in the quarter ended March 31, 2007;
    The divestiture of our M-Solutions business unit for
    $18.6 million in February 2006, which was accounted for as
    a discontinued operation;
    Our acquisition of PhoneCharge, Inc. (PhoneCharge)
    for $100 million in cash in January 2006;
    Slower than expected transaction growth in the quarters ended
    June 20, 2006 and September 30, 2006;
    The negative impact on interest-based revenue from our largest
    bank customer migrating from a processing model that guarantees
    funds to our standard risk-based processing model during the
    quarter ended March 31, 2006;
    The expiration of our agreements with First Data Corporation
    (FDC) in August 2005 and Microsoft Corporation
    (Microsoft) in December 2005, reducing
    year-over-year minimum-based revenue by $21.0 million, and
    the related completion of the amortization of intangible assets
    in September 2005 resulting from our September 2000 acquisition
    of MSFDC, L.L.C. (TransPoint), eliminating
    $16.5 million of year-over-year amortization expense;
    Our purchase of substantially all of the assets of Aphelion,
    Inc. (Aphelion) for $18.1 million in cash in
    October 2005; and
    Our purchase of substantially all of the assets of Integrated
    Decision Systems, Inc. (IDS) for $18.0 million
    in cash in September 2005.     36




---



##### Table of Contents



e-bills e-bills
    e-bill 12-quarter
    sm
 37




---



##### Table of Contents



Form 10-K,
    Year Ended June 30,2007


2006


2005Total revenues


100.0
%


100.0
%


100.0
%Expenses:Cost of processing, servicing and
    support


41.2



39.0



39.6Research and development


11.5



11.6



10.7Sales and marketing


10.1



9.9



9.2General and administrative


8.1



7.0



7.7Depreciation and amortization


9.3



11.3



23.4Reorganization charge










0.7Total expenses


80.4



78.8



91.3Income from continuing operation
    before other income and expenses


19.6



21.2



8.7Equity in net loss of joint venture


(0.1
)


(0.4
)


(0.4
)Interest income


1.3



1.5



1.2Interest expense


(0.3
)


(0.1
)


(0.1
)Income from continuing operations
    before income taxes


20.5



22.2



9.4Income tax expense


7.7



8.5



3.3Income from continuing operations


12.8



13.7



6.1Earnings from discontinued
    operations before income taxes (including gain on disposal of
    $12,821,000 in FY 2006)






1.6



0.2Income tax expense on discontinued
    operations






0.9



0.1Income from discontinued operations






0.7



0.1Net income


12.8
%


14.4
%


6.2
%  38




---



##### Table of Contents



Results
    of Operations
  Years
    Ended June 30, 2007 and 2006
    Total
    Revenues (000s)
  June 30,


Change2007


2006


$


%Year ended

$
972,644


$
879,402


$
93,242



10.6
%     e-bills e-bills
      10-year
 39




---



##### Table of Contents



e-bills,
    Processing
    and Servicing Revenue (000s)
  June 30,


Change2007


2006


$


%Year ended

$
809,814


$
754,076


$
55,738



7.4
%   e-bills e-bills e-bills
     40




---



##### Table of Contents



e-bill
  License
    Fee Revenue (000s)
  June 30,


Change2007


2006


$


%Year ended

$
46,209


$
35,196


$
11,013



31.3
%     Maintenance
    Fee Revenue (000s)
  June 30,


Change2007


2006


$


%Year ended

$
55,217


$
42,218


$
12,999



30.8
%     Professional
    Fee Revenue (000s)
  June 30,

Change2007

2006

$

%Year ended

$
61,404


$
47,912


$
13,492



28.2
%    41




---



##### Table of Contents



Cost
    of Processing, Servicing and Support (000s)
  June 30,2007


2006%





%$


Revenue


$


RevenueYear ended

$
401,176



41.2
%

$
342,535



39.0
%       Research
    and Development (000s)
  June 30,2007


2006%





%$


Revenue


$


RevenueYear ended

$
112,077



11.5
%

$
101,854



11.6
%    42




---



##### Table of Contents



Sales
    and Marketing (000s)
  June 30,2007


2006%





%$


Revenue


$


RevenueYear ended

$
98,459



10.1
%

$
87,418



9.9
%     General
    and Administrative (000s)
  June 30,2007


2006%





%$


Revenue


$


RevenueYear ended

$
79,057



8.1
%

$
61,948



7.0
%     Depreciation
    and Amortization (000s)
  June 30,2007


2006%





%$


Revenue


$


RevenueYear ended

$
90,937



9.3
%

$
99,530



11.3
%   construction-in-progress
  Form 10-K
 43




---



##### Table of Contents



Equity
    in Loss of Joint Venture (000s)
  June 30,2007


2006%





%$


Revenue


$


RevenueYear ended

$
(1,078
)


(0.1
)%

$
(3,100
)


(0.4
)%     Net
    Interest (000s)
  June 30,2007


2006%





%$


Revenue


$


RevenueYear ended :Interest income

$
12,693






$
13,441Interest expense


(3,099
)






(986
)Net interest

$
9,594



1.0
%

$
12,455



1.4
%   construction-in-progress
  Income
    Tax Expense (000s)
  June 30,2007


2006Effective





Effective$


Rate


$


RateYear ended

$
75,016



37.6
%

$
74,455



38.1
%    44




---



##### Table of Contents



Earnings
    from Discontinued Operations (000s)
  June 30,2007


2006%





%$


Revenue


$


RevenueYear ended









$
14,310



1.6
%     Income
    Tax Expense on Discontinued Operations
    (000s)
  June 30,2007


2006Effective





Effective$


Rate


$


RateYear ended

$







$
8,064



56.4
%     Years
    Ended June 30, 2006 and 2005
    Total
    Revenues (000s)
  June 30,


Change2006


2005


$


%Year ended

$
879,402


$
749,847


$
129,555



17.3
%     e-bills e-bills
 45




---



##### Table of Contents



Processing
    and Servicing Revenue (000s)
  June 30,


Change2006


2005


$


%Year ended

$
754,076


$
660,541


$
93,535



14.2
%   e-bills, e-bills e-bill
   46




---



##### Table of Contents



License
    Fee Revenue (000s)
  June 30,


Change2006


2005


$


%Year ended

$
35,196


$
28,458


$
6,738



23.7
%     Maintenance
    Fee Revenue (000s)
  June 30,


Change2006


2005


$


%Year ended

$
42,218


$
31,231


$
10,987



35.2
%     Professional
    Fee Revenue (000s)
  June 30,


Change2006


2005


$


%Year ended

$
47,912


$
29,617


$
18,295



61.8
%     line-by-line
  Cost
    of Processing, Servicing and Support (000s)
  June 30,2006


2005%





%$


Revenue


$


RevenueYear ended

$
342,535



39.0
%

$
296,912



39.6
%    47




---



##### Table of Contents



Research
    and Development (000s)
  June 30,2006


2005%





%$


Revenue


$


RevenueYear ended

$
101,854



11.6
%

$
80,039



10.7
%     Sales
    and Marketing (000s)
  June 30,2006


2005%





%$


Revenue


$


RevenueYear ended

$
87,418



9.9
%

$
69,106



9.2
%     General
    and Administrative (000s)
  June 30,2006


2005%





%$


Revenue


$


RevenueYear ended

$
61,948



7.0
%

$
57,486



7.7
%     Depreciation
    and Amortization (000s)
  June 30,2006


2005%





%$


Revenue


$


RevenueYear ended

$
99,530



11.3
%

$
175,719



23.4
%    48




---



##### Table of Contents



Reorganization
    Charge (000s)
  June 30,2006


2005%





%$


Revenue


$


RevenueYear ended









$
5,585



0.7
%     Equity
    in Loss of Joint Venture (000s)
  June 30,2006


2005%





%$


Revenue


$


RevenueYear ended

$
(3,100
)


(0.4
)%

$
(2,984
)


(0.4
)%     Net
    Interest (000s)
  June 30,2006


2005%





%$


Revenue


$


RevenueYear ended :Interest income

$
13,441






$
8,809Interest expense


(986
)






(1,094
)Net interest

$
12,455



1.4
%

$
7,715



1.1
%  49




---



##### Table of Contents



Gain
    on Investments (000s)
  June 30,2006


2005%





%$


Revenue


$


RevenueYear ended









$
592



     Income
    Tax Expense (000s)
  June 30,2006


2005Effective





Effective$


Rate


$


RateYear ended

$
74,455



38.1
%

$
24,560



34.9
%     Earnings
    from Discontinued Operations (000s)
  June 30,2006


2005%





%$


Revenue


$


RevenueYear ended

$
14,310



1.6
%

$
1,518



0.2
%   M-Solutions
  Income
    Tax Expense on Discontinued Operations
    (000s)
  June 30,2006


2005Effective





Effective$


Rate


$


RateYear ended

$
8,064



56.4
%

$
480



31.6
%    50




---



##### Table of Contents



Segment
    Information
    Form 10-K
  Year Ended June 30,2007


2006


2005Revenues:Electronic Commerce, gross

$
736,745


$
662,728


$
580,696Impact of warrants to a customer


(10,950
)






Impact of purchase accounting on
    deferred revenue


(2,664
)






Electronic Commerce, net


723,131



662,728



580,696Software, gross


135,207



109,386



81,072Impact of purchase accounting on
    deferred revenue


(9,723
)






Software, net


125,484



109,386



81,072Investment Services


124,029



107,288



88,079Total Revenue

$
972,644


$
879,402


$
749,847Income from continuing operations
    before other income and expenses:Segment operating income (loss):Electronic Commerce

$
258,621


$
247,918


$
207,796Software


24,871



20,858



17,748Investment Services


24,646



16,356



17,121Corporate


(41,437
)


(37,845
)


(37,595
)Purchase accounting amortization


(44,691
)


(57,037
)


(133,446
)Impact of warrants to a customer


(10,950
)






Impact of purchase accounting on
    deferred revenue


(12,387
)






SFAS 123(R)  Stock
    options issued before July 1, 2004(1)


(1,619
)


(4,133
)


Integration costs associated with
    acquisitions


(6,116
)






Reorganization charge










(5,585
)Write off of capitalized software










(1,039
)Income from continuing operations
    before other income and expenses

$
190,938


$
186,117


$
65,000     (1)
    
    At the beginning of our fiscal year 2005, we implemented a new
    long-term incentive compensation philosophy, which significantly
    reduced overall participation and focused on restricted stock
    with limited stock options. As a result, we recorded the cost of
    restricted stock throughout our fiscal year 2005. In fiscal year
    2006, we adopted SFAS 123(R), and are consequently
    recording all long-term incentive grants, both restricted stock
    and stock options, as an expense in our consolidated statement
    of operations. The 51




---



##### Table of Contents



adjustment for SFAS 123(R) represents the charge associated
    with the current vesting of options that were unvested as of
    July 1, 2004 under our previous compensation philosophy,
    which were originally accounted for utilizing APB 25.  Years
    Ended June 30, 2007 and 2006
  Electronic
    Commerce Segment Information
  Electronic
    Commerce Revenues  Gross (000s)
  June 30,


Change2007


2006


$


%Year ended

$
736,745


$
662,728


$
74,017



11.2
%      52




---



##### Table of Contents



e-bill
  Fiscal
    2007:
  Three Months Ended6/30/2007


3/31/2007


12/31/2006


9/30/2006(In millions, except revenue per transactionand revenue per e-bill delivered)TransactionsCSP:Revenue(1)

$
123.8


$
122.5


$
116.8


$
114.2Revenue per transaction

$
0.45


$
0.45


$
0.46


$
0.48Transactions processed


275.3



269.6



251.5



235.7Non-CSP:Revenue

$
38.6


$
39.6


$
38.3


$
36.2Revenue per transaction

$
0.57


$
0.56


$
0.54


$
0.48Transactions processed


68.3



71.2



70.5



76.0Total Transactions:Revenue

$
162.4


$
162.1


$
155.1


$
150.4Transactions processed


343.6



340.9



322.0



311.7e-bill
    DeliveryRevenue

$
10.4


$
9.8


$
8.7


$
8.5Revenue per
    e-bill
    delivered

$
0.17


$
0.17


$
0.16


$
0.16e-bills
    delivered


60.5



58.7



54.9



51.8Other Electronic
    Commerce(2)Revenue

$
31.8


$
12.8


$
12.6


$
12.1Other Performance
    MetricsActive subscribers(3)


12.0



11.6



11.1



10.5     (1)
    
    CSP Revenue excludes the impact of warrants issued to a customer(2)
    
    Other Electronic Commerce includes our
    Health & Fitness products and ancillary revenue
    sources such as implementation and consulting services.
    Beginning in the quarter ended June 30, 2007, it also
    includes all electronic banking revenue resulting from our
    acquisition of Corillian on May 15, 2007 and the revenue
    enhancement consulting services (RevE) from our acquisition of
    Carreker in April 2007.(3)
    
    Active refers to subscribers who have viewed or paid
    a bill in the last 90 days at a CSP that outsources
    essentially all of its electronic billing and payment (EBP)
    functions to CheckFree. 53




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##### Table of Contents



Fiscal
    2006:
  Three Months Ended6/30/2006


3/31/2006


12/31/2005


9/30/2005(In millions, except revenue per transactionand revenue per e-bill delivered)TransactionsCSP:Revenue

$
111.8


$
113.8


$
120.5


$
122.7Revenue per transaction

$
0.49


$
0.52


$
0.60


$
0.64Transactions processed


227.5



217.3



199.9



190.3Non-CSP:Revenue

$
34.4


$
36.0


$
24.4


$
24.3Revenue per transaction

$
0.46


$
0.47


$
0.34


$
0.32Transactions processed


74.7



76.0



70.8



75.7Total Transactions:Revenue

$
146.2


$
149.8


$
144.9


$
147.0Transactions processed


302.2



293.3



270.7



266.0e-bill
    DeliveryRevenue

$
8.0


$
7.4


$
7.2


$
6.8Revenue per
    e-bill
    delivered

$
0.16


$
0.16


$
0.16


$
0.16e-bills
    delivered


50.0



46.7



45.2



42.7Other Electronic
    CommerceRevenue

$
12.3


$
12.2


$
11.2


$
9.7Other Performance
    MetricsActive subscribers


10.0



9.7



9.0



8.8      54




---



##### Table of Contents



e-bill
    e-bills e-bills e-bill e-bill
    Electronic
    Commerce Operating Income (000s)
  June 30,


Change2007


2006


$


%Year ended

$
258,621


$
247,918


$
10,703



4.3
%     Software
    Segment Information:
  Software
    Revenues  Gross (000s)
  June 30,


Change2007


2006


$


%Year ended

$
135,207


$
109,386


$
25,821



23.6
%    55




---



##### Table of Contents



Software
    Operating Income (000s)
  June 30,


Change2007


2006


$


%Year ended

$
24,871


$
20,858


$
4,013



19.2
%     Investment
    Services Segment Information:
  Investment
    Services Revenues (000s)
  June 30,


Change2007


2006


$


%Year ended

$
124,029


$
107,288


$
16,741



15.6
%     Investment
    Services Operating Income (000s)
  June 30,


Change2007


2006


$


%Year ended

$
24,646


$
16,356


$
8,290



50.7
%     Corporate
    Segment Information:
  Corporate
    Operating Loss (000s)
  June 30,


Change2007


2006


$


%Year ended

$
(41,437
)

$
(37,845
)

$
(3,592
)


9.5
%  56




---



##### Table of Contents



Purchase
    Accounting Amortization (000s)
  June 30,


Change2007


2006


$


%Year ended

$
44,691


$
57,037


$
(12,346
)


(21.6
)%   Form 10-K
  Segment
    Level Purchase Accounting Amortization
    (000s)
  June 30,


Change2007


2006


$


%Electronic Commerce

$
37,826


$
49,072


$
(11,246
)Software


4,929



5,973



(1,044
)Investment Services


1,936



1,992



(56
)Total

$
44,691


$
57,037


$
(12,346
)


(21.6
)%     Impact of
    Warrants to a Customer (000s)
  June 30,


Change2007


2006


$


%Year ended

$
10,950


$



$
10,950



   EITF 96-18, EITF 01-09,
 57




---



##### Table of Contents



Impact of
    Purchase Accounting on Deferred Revenue
    (000s)
  June 30,


Change2007


2006


$


%Year ended

$
12,387


$



$
12,387



   EITF 01-3 EITF 04-11
  Segment
    Level Impact of Purchase Accounting on Deferred Revenue
    (000s)
  June 30,


Change2007


2006


$


%Electronic Commerce

$
2,664


$



$
2,664Software


9,723







9,723Total

$
12,387






$
12,387



     SFAS 123(R) 
    Options Issued Before July 1, 2004(000s)
  June 30,


Change2007


2006


$


%Year ended

$
1,619


$
4,133


$
(2,514
)


(60.8
)%     Segment
    Level Impact of SFAS 123(R)  Options Issued
    Before July 1, 2004 (000s)
  June 30,


Change2007


2006


$


%Electronic Commerce

$
1,177


$
2,999


$
(1,822
)Software


71



184



(113
)Investment Services


167



425



(258
)Corporate


204



525



(321
)Total

$
1,619


$
4,133


$
(2,514
)


(60.8
)%  58




---



##### Table of Contents



Integration
    Costs Associated with Acquisitions (000s)
  June 30,


Change2007


2006


$


%Year ended

$
6,116


$



$
6,116



   Form 10-K
  Years
    Ended June 30, 2006 and 2005
  Electronic
    Commerce Segment Information
  Electronic
    Commerce Revenues  Gross (000s)
  June 30,


Change2006


2005


$


%Year ended

$
662,728


$
580,696


$
82,032



14.1
%   e-bills
 59




---



##### Table of Contents



Fiscal
    2006:
  Three Months Ended6/30/2006


3/31/2006


12/31/2005


9/30/2005(In millions, except revenue per transactionand revenue per e-bill delivered)TransactionsCSP:Revenue

$
111.8


$
113.8


$
120.5


$
122.7Revenue per transaction

$
0.49


$
0.52


$
0.60


$
0.64Transactions processed


227.5



217.3



199.9



190.3Non-CSP:Revenue

$
34.4


$
36.0


$
24.4


$
24.3Revenue per transaction

$
0.46


$
0.47


$
0.34


$
0.32Transactions processed


74.7



76.0



70.8



75.7Total Transactions:Revenue

$
146.2


$
149.8


$
144.9


$
147.0Transactions processed


302.2



293.3



270.7



266.0e-bill
    DeliveryRevenue

$
8.0


$
7.4


$
7.2


$
6.8Revenue per
    e-bill
    delivered

$
0.16


$
0.16


$
0.16


$
0.16e-bills
    delivered


50.0



46.7



45.2



42.7Other Electronic
    CommerceRevenue

$
12.3


$
12.2


$
11.2


$
9.7Other Performance
    MetricsActive subscribers


10.0



9.7



9.0



8.8   Fiscal
    2005:
  Three Months Ended6/30/2005


3/31/2005


12/31/2004


9/30/2004(In millions, except revenue per transactionand revenue per e-bill delivered)TransactionsCSP:Revenue

$
113.9


$
109.9


$
105.8


$
102.3Revenue per transaction

$
0.67


$
0.68


$
0.70


$
0.73Transactions processed


171.0



162.3



151.2



140.3Non-CSP:Revenue

$
23.2


$
23.0


$
22.6


$
21.9Revenue per transaction

$
0.31


$
0.32


$
0.33


$
0.33Transactions processed


73.9



72.1



68.2



65.5Total Transactions:Revenue

$
137.1


$
132.9


$
128.4


$
124.2Transactions processed


244.9



234.4



219.4



205.8e-bill
    DeliveryRevenue

$
6.8


$
5.9


$
5.3


$
4.8Revenue per
    e-bill
    delivered

$
0.16


$
0.16


$
0.16


$
0.16e-bills
    delivered


41.0



36.8



32.8



29.6Other Electronic
    CommerceRevenue

$
9.0


$
8.9


$
8.4


$
9.3Other Performance
    MetricsActive subscribers


7.8



7.4



6.9



6.4  60




---



##### Table of Contents



e-bills e-bills e-bill
      Electronic
    Commerce Operating Income (000s)
  June 30,


Change2006


2005


$


%Year ended

$
247,918


$
207,796


$
40,122



19.3
%    61




---



##### Table of Contents



Software
    Segment Information:
  Software
    Revenues  Gross (000s)
  June 30,


Change2006


2005


$


%Year ended

$
109,386


$
81,072


$
28,314



34.9
%     Software
    Operating Income (000s)
  June 30,


Change2006


2005


$


%Year ended

$
20,858


$
17,748


$
3,110



17.5
%     Investment
    Services Segment Information:
  Investment
    Services Revenues (000s)
  June 30,


Change2006


2005


$


%Year ended

$
107,288


$
88,079


$
19,209



21.8
%     Investment
    Services Operating Income (000s)
  June 30,


Change2006


2005


$


%Year ended

$
16,356


$
17,121


$
(765
)


(4.5
)%    62




---



##### Table of Contents



Corporate
    Segment Information:
  Corporate
    Operating Loss (000s)
  June 30,


Change2006


2005


$


%Year ended

$
(37,845
)

$
(37,595
)

$
(250
)


0.7
%     Purchase
    Accounting Amortization (000s)
  June 30,


Change2006


2005


$


%Year ended

$
57,037


$
133,446


$
(76,409
)


(57.3
)%     Segment
    Level Purchase Accounting Amortization
    (000s)
  June 30,


Change2006


2005


$


%Electronic Commerce

$
49,072


$
130,175


$
(81,103
)Software


5,973



2,667



3,306Investment Services


1,992



604



1,388Total

$
57,037


$
133,446


$
(76,409
)


(57.3
)%   SFAS 123(R) 
    Options Issued Before July 1, 2004 (000s)
  June 30,


Change2006


2005


$


%Year ended

$
4,133


$



$
4,133



    63




---



##### Table of Contents



Segment
    Level Impact of SFAS 123(R)  Options Issued
    Before July 1, 2004 (000s)
  June 30,


Change2006


2005


$


%Electronic Commerce

$
2,999


$



$
2,999Software


184







184Investment Services


425







425Corporate


525







525Total

$
4,133


$



$
4,133



   Reorganization
    Charge (000s)
  June 30,


Change2006


2005


$


%Year ended

$



$
5,585


$
(5,585
)


(100.0
)%     Segment
    Level Reorganization Charge (000s)
  June 30,


Change2006


2005


$


%Electronic Commerce

$



$
3,208


$
(3,208
)Software






1,876



(1,876
)Investment Services






313



(313
)Corporate






188



(188
)Total

$



$
5,585


$
(5,585
)


(100.0
)%   Write Off
    of Capitalized Software (000s)
  June 30,


Change2006


2005


$


%Year ended

$



$
(1,039
)

$
1,039



(100.0
)%     Cyclicality
    and Seasonality
     64




---



##### Table of Contents



Inflation
    Liquidity
    and Capital Resources
    Year Ended June 30,2007


2006


2005(In thousands)Net cash provided by operating
    activities

$
233,650


$
213,602


$
206,095Net cash used in investing
    activities


(446,761
)


(138,076
)


(215,855
)Net cash provided by (used in)
    financing activities


95,374



(3,971
)


(24,113
)Effect of exchange rate changes


628



256



313Net increase (decrease) in cash
    and cash equivalents

$
(117,109
)

$
71,811


$
(33,560
)          65




---



##### Table of Contents



12-year
           66




---



##### Table of Contents



:
  Payments Due Year Ended June 30,2009 to


2011 toContractual Obligations

Total


2008


2010


2012


Thereafter(In thousands)Operating lease obligations

$
120,238


$
27,806


$
45,928


$
20,617


$
25,887Capital lease oligations


4,210



2,159



2,051







Revolving line of credit


212,981



212,981











Other long-term obligations


74,792



2,419



2,419



2,419



67,535Total contractual obligations

$
412,221


$
245,365


$
50,398


$
23,036


$
93,422   Use of
    Non-GAAP Financial Information
  Form 10-K
 67




---



##### Table of Contents



and/or
          Year Ended June 30,2007


2006Cash provided by operating
    activities

$
233,650


$
213,602Excluding: Net change in
    settlement accounts


963



3,430Less: Capital expenditures


(70,918
)


(48,096
)Impact of operating account
    conversion


(9,443
)


Plus: Data center reimbursements


30,002



2,046Free cash flow

$
184,254


$
170,982       Recent
    Accounting Pronouncements
   68




---



##### Table of Contents



Application
    of Critical Accounting Policies and Estimates
    Discussion with the Audit Committee of the Board of
    Directors.
  Accounting for Goodwill.
 69




---



##### Table of Contents




    Electronic Commerce of $847.7 million;
    Software of $140.9 million; and
    Investment Services of $39.0 million.      Intangible Assets Exclusive of Goodwill.
  Equity Instruments Issued to Customers. EITF 01-09.
 70




---



##### Table of Contents



Income Taxes and Deferred Income Taxes.
  Investments.
  Safe
    Harbor Statement under the Private Securities Litigation and
    Reform Act of 1995
  Form 10-K
 71




---



##### Table of Contents



Form 10-K Form 10-K Form 10-K
 72




---



##### Table of Contents



Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk              and/or
  Item 8.
    Financial
    Statements and Supplementary Data.   73




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON INTERNAL
    CONTROL OVER FINANCIAL REPORTING
      Internal Control 
    Integrated Framework
        Internal
    Control  Integrated Framework
 74




---



##### Table of Contents



Internal Control 
    Integrated Framework
    
    75




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
            Internal Control 
    Integrated Framework
  
    76




---



##### Table of Contents



CHECKFREE
    CORPORATION AND SUBSIDIARIES
  CONSOLIDATED
    BALANCE SHEETS
  June 30,2007


2006(In thousands, exceptshare and per share data)ASSETSCURRENT ASSETS:Cash and cash equivalents

$
55,974


$
173,083Settlement assets


127,661



107,128Investments


139,153



144,530Accounts receivable, net


221,320



146,605Prepaid expenses and other assets


42,759



39,810Deferred income taxes


10,189



7,311Total current assets


597,056



618,467PROPERTY AND EQUIPMENT, NET


156,113



100,217OTHER ASSETS:Capitalized software, net


3,668



3,755Goodwill


1,027,512



734,591Strategic agreements, net


81,063



106,005Other intangible assets, net


140,804



62,416Investments and restricted cash


47,390



78,559Other noncurrent assets


11,426



8,779Deferred income taxes


66,246



45,240Total other assets


1,378,109



1,039,345Total assets

$
2,131,278


$
1,758,029LIABILITIES AND
    STOCKHOLDERS EQUITYCURRENT LIABILITIES:Accounts payable

$
35,868


$
16,967Settlement obligations


123,302



103,732Accrued liabilities


100,944



74,366Current portion of long-term
    obligations


206,022



767Deferred revenue


79,391



40,301Total current liabilities


545,527



236,133ACCRUED RENT AND OTHER


4,663



3,844DEFERRED INCOME TAXES


2,284



2,964DEFERRED REVENUE


3,281



3,021CAPITAL LEASE AND LONG-TERM
    OBLIGATIONS, Less current portion


68,021



28,432STOCKHOLDERS EQUITY:Preferred stock 
    50,000,000 authorized shares, $0.01 par value; no amounts
    issued or outstanding






Common stock 
    500,000,000 authorized shares, $0.01 par value; issued and
    outstanding 87,974,284 and 90,867,834 shares, respectively


880



909Additional
    paid-in-capital


2,376,278



2,482,309Accumulated other comprehensive
    gain (loss)


3,896



(1,593
)Accumulated deficit


(873,552
)


(997,990
)Total stockholders equity


1,507,502



1,483,635Total liabilities and
    stockholders equity

$
2,131,278


$
1,758,029    77




---



##### Table of Contents



CHECKFREE
    CORPORATION AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
  Year Ended June 30,2007


2006


2005(In thousands, exceptshare and per share data)REVENUES:Processing and servicing

$
809,814


$
754,076


$
660,541License fees


46,209



35,196



28,458Maintenance fees


55,217



42,218



31,231Professional fees


61,404



47,912



29,617Total revenues


972,644



879,402



749,847EXPENSES:Cost of processing, servicing and
    support


401,176



342,535



296,912Research and development


112,077



101,854



80,039Sales and marketing


98,459



87,418



69,106General and administrative


79,057



61,948



57,486Depreciation and amortization


90,937



99,530



175,719Reorganization charges










5,585Total expenses


781,706



693,285



684,847INCOME FROM CONTINUING OPERATIONS
    BEFORE OTHER INCOME AND EXPENSES


190,938



186,117



65,000OTHER:Equity in net loss of joint venture


(1,078
)


(3,100
)


(2,984
)Interest income


12,693



13,441



8,809Interest expense


(3,099
)


(986
)


(1,094
)Gain on investments










592INCOME FROM CONTINUING OPERATIONS
    BEFORE INCOME TAXES


199,454



195,472



70,323INCOME TAX EXPENSE


75,016



74,455



24,560INCOME FROM CONTINUING OPERATIONS


124,438



121,017



45,763Income from discontinued
    operations before income taxes (including a gain on disposal of
    $12,821 in 2006)






14,310



1,518Income tax expense on discontinued
    operations






8,064



480Income from discontinued operations






6,246



1,038NET INCOME

$
124,438


$
127,263


$
46,801BASIC EARNINGS PER SHARE:Continuing operations

$
1.41


$
1.33


$
0.51Discontinued operations

$



$
0.07


$
0.01Total basic

$
1.41


$
1.40


$
0.52Weighted average number of shares


88,313,049



90,984,495



90,767,054DILUTED EARNINGS PER SHARE:Continuing operations

$
1.37


$
1.29


$
0.49Discontinued operations

$



$
0.07


$
0.01Total diluted

$
1.37


$
1.36


$
0.50Weighted average number of shares


90,896,186



93,708,295



92,914,597    78




---



##### Table of Contents



CHECKFREE
    CORPORATION AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENT OF STOCKHOLDERS EQUITY
  Number of


Number of


Common


AdditionalShares of


Shares of


Stock


Paid inCommon Stock


Treasury Stock


at Par


Capital(In thousands, except share data)BALANCE AT JUNE 30, 2004


90,164,926






$
902


$
2,471,062Net income














Unrealized loss on
    available-for-sale securities, net of tax














Unrealized loss on foreign
    currency translation














Unrealized loss on cash flow
    hedges, net of tax














Total comprehensive income














Stock options exercised


710,396







7



10,200Tax benefit associated with
    exercise of stock options














4,028Employee stock purchases


165,098







2



3,995Treasury shares acquired






(891,200
)






Treasury shares retired


(891,200
)


891,200



(9
)


(33,451
)401(k) match


108,484







1



3,069Unearned compensation














8,721Equity based compensation














1,560BALANCE AT JUNE 30, 2005


90,257,704







903



2,469,184Net income














Unrealized loss on
    available-for-sale securities, net of tax














Unrealized gain on foreign
    currency translation














Unrealized gain on cash flow
    hedges, net of tax














Total comprehensive income














Stock options exercised


1,113,286







11



23,747Tax benefit associated with
    exercise of stock options














8,907Employee stock purchases


122,334







1



4,066Treasury shares acquired






(707,732
)






Treasury shares retired


(707,732
)


707,732



(7
)


(33,593
)401(k) match


82,242







1



4,053Amortization of unearned
    compensation














(6,168
)Equity based compensation














12,113BALANCE AT JUNE 30, 2006


90,867,834







909



2,482,309Net Income














Unrealized gain (loss) on
    available-for-sale securities, net of tax














Unrealized gain (loss) on foreign
    currency translation














Unrealized gain (loss) on cash
    flow hedges, net of tax














Total comprehensive income














Stock options exercised


714,930







7



10,241Tax benefit associated with
    exercise of stock options














4,611Employee stock purchases


126,187







1



4,664Treasury shares acquired






(3,911,554
)






Treasury shares retired


(3,911,554
)


3,911,554



(39
)


(149,961
)401(k) match


176,887







2



2,734Equity based compensation














10,730Impact of vested warrants














10,950BALANCE AT JUNE 30, 2007


87,974,284






$
880


$
2,376,278    79




---



##### Table of Contents



CHECKFREE
    CORPORATION AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENT OF STOCKHOLDERS EQUITY
  AccumulatedOther


Treasury








TotalComprehensive


Stock


Unearned


Accumulated


StockholdersIncome/(Loss)


at Cost


Compensation


Deficit


Equity(In thousands, except for share data)BALANCE AT JUNE 30, 2004

$
(728
)









$
(1,172,054
)

$
1,299,182Net income














46,801



46,801Unrealized loss on
    available-for-sale securities, net of tax


(174
)














(174
)Unrealized loss on foreign currency
    translation


(800
)














(800
)Unrealized loss on cash flow
    hedges, net of tax


(549
)














(549
)Total comprehensive income


















45,278Stock options exercised


















10,207Tax benefit associated with
    exercise of stock options


















4,028Employee stock purchases


















3,997Treasury shares acquired






(33,460
)










(33,460
)Treasury shares retired






33,460











401(k) match


















3,070Unearned compensation










(8,721
)






Amortization of unearned
    compensation










2,553







2,553Equity based compensation


















1,560BALANCE AT JUNE 30, 2005


(2,251
)






(6,168
)


(1,125,253
)


1,336,415Net income














127,263



127,263Unrealized loss on
    available-for-sale securities, net of tax


(1,015
)














(1,015
)Unrealized gain on foreign currency
    translation


687















687Unrealized gain on cash flow
    hedges, net of tax


986















986Total comprehensive income


















127,921Stock options exercised


















23,758Tax benefit associated with
    exercise of stock options


















8,907Employee stock purchases


















4,067Treasury shares acquired






(33,600
)










(33,600
)Treasury shares retired






33,600











401(k) match


















4,054Amortization of unearned
    compensation










6,168







Equity based compensation


















12,113BALANCE AT JUNE 30, 2006


(1,593
)










(997,990
)


1,483,635Net Income














124,438



124,438Unrealized gain (loss) on
    available-for-sale securities, net of tax


780















780Unrealized gain (loss) on foreign
    currency translation


4,602















4,602Unrealized gain (loss) on cash flow
    hedges, net of tax


107















107Total comprehensive income


















129,927Stock options exercised


















10,248Tax benefit associated with
    exercise of stock options


















4,611Employee stock purchases


















4,665Treasury shares acquired






(150,000
)










(150,000
)Treasury shares retired






150,000











401(k) match


















2,736Equity based compensation


















10,730Impact of vested warrants


















10,950BALANCE AT JUNE 30, 2007

$
3,896










$
(873,552
)

$
1,507,502    80




---



##### Table of Contents



CHECKFREE
    CORPORATION AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
  Year Ended June 30,2007


2006


2005(In thousands)OPERATING ACTIVITIES:Net income

$
124,438


$
127,263


$
46,801Adjustments to reconcile net
    income to cash provided by operating activities:Equity in net loss of joint venture


1,078



3,100



2,984Depreciation and amortization


90,937



100,020



176,598Expenses related to data center


1,021







Deferred income tax benefit


(9,229
)


(8,021
)


(13,701
)Gain on investments










(592
)Equity-based compensation


14,491



17,177



8,193Vested warrants held by a customer


10,950







Gain from discontinued operations






(12,821
)


Net (gain)/loss on disposition of
    property and equipment


(540
)


418



277Changes in certain assets and
    liabilities (net of acquisitions):Settlement assets and obligations


(963
)


(3,430
)


153Accounts receivable


(26,302
)


(17,367
)


(11,994
)Prepaid expenses and other


(1,412
)


(9,772
)


(6,211
)Accounts payable


12,210



3,547



(1,750
)Accrued liabilities and other


(3,189
)


7,640



4,238Deferred revenue


20,160



5,848



1,099Net cash provided by operating
    activities


233,650



213,602



206,095INVESTING ACTIVITIES:Purchase of property and software


(41,179
)


(48,096
)


(33,893
)Proceeds from sale of business






18,593



Capitalization of software
    development costs


(481
)


(875
)


(1,706
)Purchase of property and equipment
    for data center facility


(29,739
)






Purchase of businesses, net of
    cash acquired


(417,775
)


(136,143
)


(54,934
)Purchase of investments-Available
    for sale


(298,078
)


(429,949
)


(380,672
)Proceeds from sales and maturities
    of investments  Available for sale


345,092



466,011



262,704Purchase of other investments, net


(2,296
)


(411
)


(197
)Investment in joint venture






(3,190
)


(2,818
)Change in other assets


(2,305
)


(4,016
)


(4,339
)Net cash used in investing
    activities


(446,761
)


(138,076
)


(215,855
)FINANCING ACTIVITIES:Proceeds from long-term financing


334,000







Principal payments of long-term
    financing


(130,000
)






Principal payments under capital
    lease and other long-term obligations


(4,384
)


(2,469
)


(5,108
)Proceeds from exercise of stock
    options


10,248



23,758



10,207Excess tax benefit from
    equity-based compensation


960



3,012



Purchase of treasury stock


(150,000
)


(33,600
)


(33,460
)Proceeds from associates stock
    purchase plan


4,548



4,377



4,248Payment of deferred financing fees






(1,095
)


Proceeds from data center facility
    credit line


30,002



2,046



Net cash provided by (used in)
    financing activities


95,374



(3,971
)


(24,113
)Effect of exchange rate changes on
    cash and cash equivalents


628



256



313NET INCREASE (DECREASE) IN CASH
    AND CASH EQUIVALENTS


(117,109
)


71,811



(33,560
)CASH AND CASH EQUIVALENTS:Beginning of period


173,083



101,272



134,832End of period

$
55,974


$
173,083


$
101,272    81




---



##### Table of Contents



NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS
  NOTE 1.
    SUMMARY
    OF SIGNIFICANT ACCOUNTING POLICIES  Form 10-K
  Organization
    Principles
    of Consolidation
    Use of
    Estimates
    Cash and
    Cash Equivalents
    Investments
     82




---



##### Table of Contents



Settlement
    Assets and Obligations
    Concentrations
    of Credit Risk
    Derivative
    Financial Instruments
    Property
    and Equipment
   83




---



##### Table of Contents



Capitalized
    Software
  98-1, (SOP 98-1). SOP 98-1
  
    SFAS 86 Software development costs
    incurred prior to the establishment of technological feasibility
    are expensed as incurred. Software development costs incurred
    after the technological feasibility of the subject software
    product has been established are capitalized in accordance with
    SFAS 86. Capitalization continues until the related
    products are available for distribution to customers.
    Capitalized software costs are amortized on a
    product-by-product
    basis using either the estimated economic life of the product on
    a straight-line basis over three to five years, or the current
    year gross product revenue to the current and anticipated future
    gross product revenue, whichever produces the greater annual
    amortization.
    SOP 98-1 
    Software costs incurred in the preliminary project stage are
    expensed as incurred. Software costs incurred after the
    preliminary project stage is complete, we have committed to the
    project, and it is probable the software will be used to perform
    the function intended are capitalized in accordance with
    SOP 98-1.
    Capitalized software costs are amortized on a
    product-by-product
    basis using the estimated economic life of the product on a
    straight-line basis, generally three to five years. Capitalized
    software costs not expected to be completed and placed in
    service are written down to estimated fair value.  Goodwill
    and Other Intangible Assets
      Impairment
    of Long-Lived Assets
    Transaction
    Processing
   84




---



##### Table of Contents



Comprehensive
    Income (Loss)
    Stock-Based
    Compensation
  96-18, (EITF 96-18).
    EITF 00-15, (EITF 00-15). EITF 00-15,
    Year EndedJune 30, 2005Net income, as reported

$
46,801Stock-based compensation included
    in net income


3,677Stock-based compensation under
    SFAS 123(R)


(9,281
)Pro forma net income

$
41,197Pro forma earnings per shareBasic and diluted

$
0.45  85




---



##### Table of Contents



Stock-Related
    Transactions With Third Parties
  EITF 96-18, (EITF 96-18) EITF 01-9, (EITF 01-9). EITF 96-18, EITF 01-9,
  Basic and
    Diluted Earnings Per Share
    Foreign
    Currency Translation
    Revenue
    Recognition
    
    Processing and Servicing Processing and
    servicing includes revenues from transaction processing,
    electronic funds transfer and monthly service fees on consumer
    funds transfer services. We recognize revenues when the services
    have been performed. Certain customer agreements include minimum
    monthly revenue commitments to us and, of those agreements, some
    have provisions that allow these minimum commitments to be
    credited against future services, as defined. We defer any
    portion of the minimum revenue commitments that we expect to be
    credited against future services until the future services are
    performed or the credits expire unused. Our estimate of minimums
    to be credited against future services is primarily based on
    customer specific historical experience and volume and growth
    experience with other customers. Transaction fees related to our
    walk-in payment operations are recorded gross of agent
    commissions if we are required to invoice our customers for such
    fees and remit the commission to our agents. As part of
    processing certain types of transactions, we earn interest from
    the time money is collected from our customers until the time
    payment is made to the applicable merchants. These revenues,
    which are generated from trust account balances not included on
    our consolidated balance sheets, are included in our processing
    and servicing revenues and totaled $40.0 million,
    $41.6 million and $26.6 million for the years ended
    June 30, 2007, 2006 and 2005, respectively.
    License Fees We recognize revenues on
    software transactions in accordance with
    SOP 97-2,
    Software Revenue Recognition
    (SOP 97-2),
    as amended by
    SOP 98-9,
    Modification of
    SOP 97-2,
    Software Revenue Recognition, With Respect to Certain
    Transactions and
    SOP 81-1,
    Accounting for Performance of Construction-Type and
    Certain Production-Type Contracts, based on the terms and
    conditions in the 86




---



##### Table of Contents



contract. In accordance with the provisions of
    SOP 97-2,
    revenues from software license agreements are recognized when
    there is persuasive evidence that an arrangement exists, the fee
    is fixed or determinable, collectibility is probable and the
    software has been delivered, provided that no significant
    obligation remains under the contract. We have multiple-element
    software arrangements which in addition to software licensing
    typically also include professional services and maintenance
    services. For these arrangements, we recognize revenue using the
    residual method. Under the residual method, the fair value of
    the undelivered elements, based on vendor specific objective
    evidence of fair value, is deferred. The difference between the
    total arrangement fee and the amount deferred for the
    undelivered elements is recognized as revenue related to the
    delivered elements. We determine the fair value of the
    undelivered elements based on the amounts charged when those
    elements are sold separately. Contracts accounted for under the
    percentage-of-completion method are generally measured based on
    the ratio of labor costs incurred to total estimated labor costs
    to be incurred. Changes in estimates to complete and revisions
    in overall profit estimates on these contracts are charged to
    earnings in the period in which they are determined. We accrue
    for contract losses if and when the current estimate of total
    contract costs exceeds total contract revenue. Where a customer
    enters into arrangements to purchase software and services on a
    subscription basis, we recognize revenue in accordance with
    Staff Accounting Bulletin (SAB) No. 104, Revenue
    Recognition in Financial Statements. Under these arrangements,
    we defer recognition of the implementation and license revenue
    and recognize them ratably over the greater of the initial life
    of the customer contract or the estimated life of the customer
    service relationship. Costs associated with implementation are
    deferred and recognized ratably over the life of the
    arrangements.  
    Maintenance Fees We recognize maintenance fee
    revenues ratably over the term of the related contractual
    support period, generally 12 months.
    Professional Fees Other revenues consist
    primarily of consulting and training services. We recognize
    consulting revenues as services are performed and training
    revenues are recognized upon delivery of the related services.    Advertising
    Costs
  SOP 93-7, (SOP 93-7).
  Income
    Taxes
    Business
    Segments
   87




---



##### Table of Contents



Related
    Parties
    Recent
    Accounting Pronouncements
         88




---



##### Table of Contents



NOTE 2.
    ACQUISITIONS
    AND DIVESTITURES  Fiscal
    2007:
  Upstream
    Technologies LLC Acquisition
    Corillian
    Corporation Acquisition
    Cash paid

$
245,349Direct costs


485Liabilities assumed


15,587$
261,421     Current assets

$
43,490Property and equipment


4,188Intangibles and other non-current
    assets


213,743Total assets

$
261,421Current liabilities

$
13,303Other non-current liabilities


2,284Total liabilities

$
15,587     Intangible


UsefulAsset


LifeCustomer base

$
30,300


10 yrsCurrent technology


13,370


3-5 yrsTradenames


1,000


2 yrs   Carreker
    Corporation Acquisition
   89




---



##### Table of Contents



Cash paid

$
206,312Direct costs


800Liabilities assumed


33,934$
241,046     Current assets

$
76,832Property and equipment


3,252Intangibles and other non-current
    assets


160,962Total assets

$
241,046Current liabilities

$
33,934     Intangible


UsefulAsset


LifeCustomer base

$
31,300



7 yrsCurrent technology


19,900



5 yrsTradenames


1,600



1 yr     Pro Forma
    Consolidated Statements of Operations
  For the Year EndedJune 30,2007


2006Total Revenues

$
1,107,000


$
1,021,000Income from continuing operations
    before other income and expense


182,000



153,000Net income

$
109,000


$
95,000Net income per share:Basic

$
1.23


$
1.04Diluted

$
1.19


$
1.01   Fiscal
    2006:
  PhoneCharge,
    Inc. Acquisition
   90




---



##### Table of Contents



Intangible


UsefulAsset


LifeCustomer base

$
25,000



5 yrsCurrent technology


4,400



5 yrsTradenames


1,700



3 yrs   Aphelion,
    Inc. Acquisition
    Intangible


UsefulAsset


LifeCustomer base

$
5,000



5 yrsCurrent technology


1,300



5 yrsTradenames


600



3 yrsCovenants not to compete


320



2 yrs   Integrated
    Decision Systems, Inc. Acquisition
    Intangible


UsefulAsset


LifeCustomer base

$
7,000



6 yrsCurrent technology


1,831



3 yrsTradenames


500



3 yrs   Disposition
    of M-Solutions
   91




---



##### Table of Contents



Total current assets

$
1,174Property and equipment, net


369Goodwill


7,250Other intangible assets, net


1,305Total other assets


8,555Total assets

$
10,098Total liabilities

$
4,326   Fiscal
    2005:
  Accurate
    Software Limited Acquisition
      Intangible


UsefulAsset


LifeCustomer relationships

$
11,000



6 yrsCurrent technology


1,860



2 to 5 yrsCovenants not to compete


2,490



1 yrTradenames


2,026



1.5 to 3 yrs   NOTE 3.
    REORGANIZATION
    CHARGES  EITF 95-3, (EITF 95-3).
 92




---



##### Table of Contents



Year-EndedJune 30,2007Reorganization charge:Electronic Commerce

$
3,095Investment Services


955Software


6,203Corporate


17Total

$
10,270       OfficeSeverance


Closureand Other


andEmployee


BusinessCosts


Exit Costs


TotalBalance as of June 30, 2005

$
5,200


$
156


$
5,356Cash payments, year ended
    June 30, 2006


(5,200
)


(156
)


(5,356
)Balance as of June 30, 2006










Reorganization charge


10,270







10,270Cash payments, year ended
    June 30, 2007


(3,352
)






(3,352
)Balance as of June 30, 2007

$
6,918


$



$
6,918   NOTE 4.
    INVESTMENTS    June 30,


June 30,2007


2006Available-for-sale

$
217,776


$
378,678Other investments


4,539



1,329Restricted cash


461



453Less: amounts classified as cash
    equivalents


(36,233
)


(157,371
)Total investments

$
186,543


$
223,089  93




---



##### Table of Contents



Available-for-Sale
    Cost orAmortized


Gross Unrealized


EstimatedCost


Gains


Losses


Fair ValueJune 30, 2007:Corporate bonds

$
6,145


$
2


$
(38
)

$
6,109Asset-backed securities


16,646



3



(31
)


16,618Collateralized mortgage obligations


10,759



37



(223
)


10,573U.S. Government and federal agency
    obligations


24,638







(176
)


24,462Municipal bonds


101,425











101,425Money market mutual funds and other


36,233











36,233Mortgage pass-through securities


22,858







(504
)


22,354Available-for-sale investments


218,704



42



(972
)


217,774Less: amounts classified as cash
    equivalents


(36,233
)










(36,233
)Net available-for-sale investments

$
182,471


$
42


$
(972
)

$
181,541June 30, 2006:Corporate bonds

$
19,734


$
2


$
(193
)

$
19,543Asset-backed securities


31,267



3



(132
)


31,138Collateralized mortgage obligations


14,928



81



(370
)


14,639Commercial paper


44,659











44,659Certificates of Deposit


10,000











10,000U.S. Government and federal agency
    obligations


62,459







(764
)


61,695Municipal bonds


67,197







(11
)


67,186Money market mutual funds and other


103,254











103,254Mortgage pass-through securities


27,430







(866
)


26,564Available-for-sale investments


380,928



86



(2,336
)


378,678Less: amounts classified as cash
    equivalents


(157,371
)










(157,371
)Net available-for-sale investments

$
223,557


$
86


$
(2,336
)

$
221,307      94




---



##### Table of Contents



Cost or


Gross


EstimatedAmortized


Unrealized


FairCost


Losses


ValuesJune 30, 2007:Corporate bonds

$
4,764


$
(38
)

$
4,726Asset-backed securities


3,968



(31
)


3,937Collateralized mortgage obligations


9,246



(223
)


9,023U.S. Government and federal agency
    obligations


22,638



(176
)


22,462Mortgage pass-through securities


22,858



(504
)


22,354Impaired available-for-sale
    investments

$
63,474


$
(972
)

$
62,502June 30, 2006:Corporate bonds

$
16,830


$
(193
)

$
16,637Asset-backed securities


13,946



(132
)


13,814Collateralized mortgage obligations


13,990



(370
)


13,620U.S. Government and federal agency
    obligations


48,420



(764
)


47,656Muncipal bonds


1,073



(11
)


1,062Mortgage pass-through securities


27,430



(866
)


26,564Impaired available-for-sale
    investments

$
121,689


$
(2,336
)

$
119,353  95




---



##### Table of Contents



Equal or Greater thanLess than 12 Months Impaired


12 Months Impaired


Total


TotalEstimated


Unrealized


Estimated


Unrealized


Estimated


UnrealizedFair Values


Losses


Fair Values


Losses


Fair Values


LossesJune 30, 2007:Corporate bonds

$
406


$
(1
)

$
4,320


$
(37
)

$
4,726


$
(38
)Asset-backed securities










3,937



(31
)


3,937



(31
)Collateralized mortgage obligations


225



(1
)


8,798



(222
)


9,023



(223
)U.S. Government and federal agency
    obligations










22,462



(176
)


22,462



(176
)Mortgage pass-through securities










22,354



(504
)


22,354



(504
)Impaired available-for-sale
    investments

$
631


$
(2
)

$
61,871


$
(970
)

$
62,502


$
(972
)June 30, 2006:Corporate bonds

$
7,433


$
(49
)

$
9,204


$
(144
)

$
16,637


$
(193
)Asset-backed securities


7,381



(53
)


6,433



(79
)


13,814



(132
)Collateralized mortgage obligations


7,520



(95
)


6,100



(275
)


13,620



(370
)U.S. Government and federal agency
    obligations


12,087



(108
)


35,569



(656
)


47,656



(764
)Municipal bonds


1,062



(11
)










1,062



(11
)Mortgage pass-through securities


14,343



(338
)


12,221



(528
)


26,564



(866
)Impaired available-for-sale
    investments

$
49,826


$
(654
)

$
69,527


$
(1,682
)

$
119,353


$
(2,336
)     Contractual MaturitiesAfter One Year


After Five YearsWithin One


through Fives


through Ten


AfterYear


Years


Years


Ten YearsCorporate bonds

$
4,534


$
1,575


$



$
Asset-backed securities






4,004



499



12,115Collaterialized mortgage
    olbigations


225



546



984



8,818U.S. Government and federal agency
    obligations


16,057



8,405







Municipal bonds






11,800



4,900



84,725Mortgage pass-through securities






642



479



21,233Total debt securities classified
    as available-for-sale investments

$
20,816


$
26,972


$
6,862


$
126,891  96




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##### Table of Contents



Cost orAmortized


EstimatedCost


Fair ValuesContractual
    MaturitiesDue in one year or less

$
20,941


$
20,816Due after one year through five
    years


27,104



26,972Due after five years through ten
    years


6,876



6,862Due after ten years


127,550



126,891Total

$
182,471


$
181,541           Other
    investments
     97




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##### Table of Contents



Pledged
    investments
    NOTE 5.
    ACCOUNTS
    RECEIVABLE    June 30,2007


2006Trade accounts receivable

$
192,062


$
128,462Unbilled trade accounts receivable


20,997



4,685Other receivables


11,364



14,967Total


224,423



148,114Less: allowance for doubtful
    accounts


3,103



1,509Accounts receivable, net

$
221,320


$
146,605   SOP 97-2
  NOTE 6.
    PROPERTY
    AND EQUIPMENT    June 30,2007


2006Land and land improvements

$
4,944


$
4,944Building and building improvements


60,886



55,684Computer equipment and software
    licenses


321,182



279,490Furniture and equipment


23,974



21,772Construction in progress


45,959



2,046Total


456,945



363,936Less: accumulated depreciation


300,832



263,719Property and equipment, net

$
156,113


$
100,217    98




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##### Table of Contents



NOTE 7.
    GOODWILL
    AND OTHER INTANGIBLE ASSETS  non-amortizing
  Electronic





InvestmentCommerce


Software


Services


TotalBalance as of June 30, 2005

$
581,239


$
63,548


$
11,387


$
656,174Goodwill acquired through
    acquisition of PhoneCharge


67,800











67,800Goodwill acquired through
    acquisition of Aphelion


10,666











10,666Goodwill acquired through
    acquisition of Integrated Decision Systems










8,019



8,019Disposition of business










(7,250
)


(7,250
)Purchase price adjustments






(818
)






(818
)Balance as of June 30, 2006


659,705



62,730



12,156



734,591Goodwill acquired through
    acquisition of Upstream










26,820



26,820Goodwill acquired through
    acquisition of Corillian


155,103











155,103Goodwill acquired through
    acquisition of Carreker


32,154



73,638







105,792Purchase price adjustments


714











714Foreign currency adjustment






4,492







4,492Balance as of June 30, 2007

$
847,676


$
140,860


$
38,976


$
1,027,512  99




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##### Table of Contents



June 30,2007


2006Capitalized software:Product technology from
    acquisitions and strategic agreement

$
167,458


$
167,108Internal development costs


34,773



32,970Total


202,231



200,078Less: accumulated amortization


198,563



196,323Capitalized software, net

$
3,668


$
3,755Strategic agreements:Strategic agreements(1)

$
744,423


$
744,423Less: accumulated amortization


663,360



638,418Strategic agreements, net

$
81,063


$
106,005Other intangible assets:Tradenames

$
54,937


$
53,176Customer base


151,868



89,639Current technology


43,662



10,290Money transfer licenses


1,700



1,700Convenants not to compete


5,828



5,670Total


257,995



160,475Less: accumulated amortization


117,191



98,059Other intangible assets, net

$
140,804


$
62,416   (1)
    
    Strategic agreements primarily include certain entity-level
    convenants not to compete.      Fiscal Year Ending
    June 30,2008

$
56,9932009


52,8172010


51,9562011


26,4482012


12,411  100




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##### Table of Contents



NOTE 8.
    ACCRUED
    LIABILITIES    June 30,2007


2006Compensation and benefits

$
46,520


$
36,433Other


47,506



37,933Reorganization reserves


6,918



Total

$
100,944


$
74,366   NOTE 9.
    FINANCING
    AGREEMENTS      Revolving
    Credit Facility
      Data
    Center Facility
   101




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##### Table of Contents



102




---



##### Table of Contents



NOTE 10.
    CAPITAL
    LEASE AND OTHER LONG-TERM OBLIGATIONS      June 30,2007


2006Equipment and software licenses

$
19,948


$
15,830Less: accumulated depreciation and
    amortization


11,899



12,080Property under capital leases, net

$
8,049


$
3,750Future minimum lease payments
    required by our capital leases are as follows:2008





$
2,1592009






2,051Total future minimum lease payments






4,210Less: amount representing interest






325Net future minimum payments





$
3,885       NOTE 11.
    COMMITMENTS
    AND CONTINGENCIES  Operating
    Leases
      Fiscal Year Ending
    June 30,2008

$
27,8062009


25,0242010


20,9042011


11,5172012


9,100Thereafter


25,887Future minimum lease payments

$
120,238  103




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##### Table of Contents



Guarantees
            Litigation
  Skubella v.
    CheckFree Corporation, et al. No. 1:07-CV-0796-TWT, Gattelaro v. CheckFree
    Corporation, et al. No. 1:07-CV-0945-TWT, Rule 10b-5
  Borroni v. Peter Kight, et al No. 1:07-CV-1382-TWT,
 104




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##### Table of Contents



NOTE 12.
    CAPITAL
    STOCK            NOTE 13.
    TRANSACTIONS
    INVOLVING EQUITY INSTRUMENTS  Employee
    Plans
   105




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##### Table of Contents



106




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##### Table of Contents



Stock
    Options
    Year Ended June 30, 2007Weighted AverageNumber of


Remaining


Weighted Average


AggregateOptions


Contractual Term


Exercise Price


Intrinsic ValueOutstanding  Beginning
    of year


3,604,750






$
28.84Granted


162,584






$
37.31Exercised


(655,029
)





$
15.75


$
13,623,000Cancelled


(175,188
)





$
36.54Outstanding  End of
    period


2,937,117



4.5 years


$
31.78


$
24,727,000Options exercisable at end of
    period


2,582,236



4.5 years


$
31.52


$
22,403,000Options vested and expected to
    vest at end of period


2,885,095



4.5 years


$
32.92


$
24,607,000Weighted average per-share fair
    value of options granted during the period

$
20.49   Year Ended June 30, 2006Weighted AverageNumber of


Remaining


Weighted Average


AggregateOptions


Contractual Term


Exercise Price


Intrinsic ValueOutstanding  Beginning
    of year


4,685,572






$
27.44Granted


144,988







41.39Exercised


(1,056,336
)






22.37


$
25,700,000Cancelled


(169,474
)






44.85Outstanding  End of
    period


3,604,750



4.8 years


$
28.84


$
74,700,000Options exercisable at end of
    period


3,045,659



4.8 years


$
28.96


$
49,000,000Weighted average per-share fair
    value of options granted during the period

$
23.37   Year Ended June 30, 2005Weighted AverageNumber of


Remaining


Weighted Average


AggregateOptions


Contractual Term


Exercise Price


Intrinsic ValueOutstanding  Beginning
    of year


5,414,603






$
26.18Granted


200,223







25.80Exercised


(649,864
)






16.08


$
13,000,000Cancelled


(279,390
)






28.05Outstanding  End of
    period


4,685,572



5.3 years


$
27.44


$
30,800,000Options exercisable at end of
    period


3,763,822



5.3 years


$
28.64


$
17,800,000Weighted average per-share fair
    value of options granted during the period

$
14.39    107




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##### Table of Contents



Restricted
    Stock
      Year Ended June 30, 2007Number of


Weighted


AggregateRestricted


Average Grant


IntrinsicStock


Date Fair Value


ValueOutstanding  Beginning
    of year


603,881


$
31.49Granted


404,924



37.61Vested


(88,817
)


29.87


$
3,795,000Cancelled


(122,605
)


34.74Outstanding  End of
    period


797,383


$
34.84   108




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##### Table of Contents



Year Ended June 30, 2006Number of


Weighted


AggregateRestricted


Average Grant


IntrinsicStock


Date Fair Value


ValueOutstanding  Beginning
    of year


456,676


$
26.16Granted


261,361



39.04Vested


(82,471
)


26.60


$
2,900,000Cancelled


(31,685
)


26.97Outstanding  End of
    period


603,881


$
31.49   Year Ended June 30, 2005Number of


Weighted


AggregateRestricted


Average Grant


IntrinsicStock


Date Fair Value


ValueOutstanding  Beginning
    of year


242,678


$
26.54Granted


371,446



25.95Vested


(89,977
)


26.53


$
2,800,000Cancelled


(67,471
)


25.94Outstanding  End of
    period


456,676


$
26.16     Associate
    Stock Purchase Plan
      401 (k)
    Plan
   109




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##### Table of Contents



6-month
  Stock
    Related Transactions With Third Parties
          NOTE 14.
    EARNINGS
    PER SHARE    Year Ended June 30, 2007


Year Ended June 30, 2006


Year Ended June 30, 2005Net Income


Shares


Earnings


Net Income


Shares


Earnings


Net Income


Shares


Earnings(Numerator)


(Denominator)


per Share


(Numerator)


(Denominator)


per Share


(Numerator)


(Denominator)


per ShareBasic EPS

$
124,438



88,313


$
1.41


$
127,263



90,984


$
1.40


$
46,801



90,767


$
0.52Effect of dilutive securities:Options and warrants






2,583











2,724











2,148Diluted EPS

$
124,438



90,896


$
1.37


$
127,263



93,708


$
1.36


$
46,801



92,915


$
0.50  110




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##### Table of Contents



NOTE 15.
    EMPLOYEE
    BENEFIT PLANS  Retirement
    Plan
  U.S.-based
  Pension
    Plan
    Deferred
    Compensation Plan
    Group
    Medical Plans
  U.S.-based U.S.-based
  NOTE 16.
    DERIVATIVE
    FINANCIAL INSTRUMENTS   111




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##### Table of Contents



NOTE 17.
    INCOME
    TAXES    Year Ended June 30,2007


2006


2005Domestic

$
207,526


$
197,382


$
74,208Foreign


(8,072
)


(1,910
)


(3,885
)Total income before income taxes

$
199,454


$
195,472


$
70,323     Year Ended June 30,2007


2006


2005Current:Federal

$
75,743


$
75,913


$
35,998State and local


8,762



5,418



2,450Foreign


603



683



(187
)Total current


85,108



82,014



38,261Deferred:Federal


(9,118
)


(9,684
)


(13,620
)State and local


(444
)


2,595



505Foreign


(530
)


(470
)


(586
)Total deferred


(10,092
)


(7,559
)


(13,701
)Total income tax expense

$
75,016


$
74,455


$
24,560Effective income tax rate


37.6
%


38.1
%


34.9
%     Year Ended June 30,2007


2006


2005Federal statutory tax expense

$
69,809


$
68,415


$
24,613State and local tax expense, net
    of federal income tax benefits


5,341



6,306



1,766Deemed dividend from foreign
    affiliate






151



136Tax exempt interest


(1,545
)


(1,597
)


(1,070
)Tax credits


(1,039
)


(571
)


(2,102
)Valuation allowances


2,939



376



503Other, net


(489
)


1,375



714Total income tax expense

$
75,016


$
74,455


$
24,560  112




---



##### Table of Contents



June 30,2007


2006Deferred tax assets:Federal, state, and foreign net
    operating loss carryforwards

$
53,912


$
2,613Federal, state, and foreign tax
    credit carryforwards


7,201



2,839Allowance for bad debts and returns


376



279Accrued compensation and related
    items


5,720



2,520Stock warrants


18,716



10,282Property and equipment


4,100



3,657Other investments


4,303



8,737Deferred revenue


(9,081
)


985Reserve accruals


10,227



5,136Capitalized software


5,781



872Other intangible assets


568



22,649Deferred tax assets


101,823



60,569Deferred tax liabilities:Intangible assets


(14,055
)


(6,261
)Prepaid expenses


(2,926
)


(1,373
)Deferred tax liabilities


(16,981
)


(7,634
)Valuation allowances


(10,691
)


(3,348
)Net deferred tax assets

$
74,151


$
49,587   2022-2027;
   113




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##### Table of Contents



NOTE 18.
    SUPPLEMENTAL
    DISCLOSURE OF CASH FLOW INFORMATION  Year Ended June 30,2007


2006


2005Interest paid

$
1,894


$
93


$
970Income taxes paid

$
74,770


$
87,127


$
41,109Supplemental disclosure of
    non-cash investing and financing activities:Capital lease and other long-term
    asset additions

$
9,815


$
1,821


$
710Additions under data center
    facility

$
13,934


$
1,285


$
Stock funding of 401(k) match

$
2,736


$
4,055


$
3,100Stock funding of Associate Stock
    Purchase Plan

$
4,665


$
4,068


$
3,997   NOTE 19.
    BUSINESS
    SEGMENTS    
    Electronic Commerce  Our Electronic Commerce
    products and services enable consumers to:  
    review bank accounts;
    receive and pay bills over the Internet; and
    pay billers directly through biller-direct sites, by telephone
    or through our walk-in retail agent network.   114




---



##### Table of Contents



www.mycheckfree.com
  
    Software Software provides software and
    services, including software, maintenance, support and
    consulting services, through four product lines. These product
    lines are Global Treasury, Reconciliation and Exception
    Management, Transaction Process Management (encompassing
    financial messaging and corporate actions), and Electronic
    Billing. Through our acquisition of Carreker in April 2007, we
    expanded our offerings into four additional product lines:
    Payments, Risk, Cash and Logistics and Global Payments
    Consulting (GPC).
    Investment Services Investment Services
    Division provides a range of portfolio management services to
    financial institutions, including broker dealers, money
    managers, investment advisors, banks and insurance companies,
    deliver portfolio management, enhanced trading solutions,
    performance measurement and reporting services to their clients.
    Corporate Corporate services include human
    resources, legal, finance and accounting and various other of
    our unallocated overhead charges.   115




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##### Table of Contents



Year Ended June 30,2007


2006


2005Revenues:Electronic Commerce, gross

$
736,745


$
662,728


$
580,696Impact of warrants to customer


(10,950
)






Impact of purchase accounting on
    deferred revenue


(2,664
)






Electronic Commerce, net


723,131



662,728



580,696Software, gross


135,207



109,386



81,072Impact of purchase accounting on
    deferred revenue


(9,723
)






Software, net


125,484



109,386



81,072Investment Services


124,029



107,288



88,079Total revenue

$
972,644


$
879,402


$
749,847Income from continuing operations
    before other income and expenses:Segment operating income:Electronic Commerce

$
258,621


$
247,918


$
207,796Software


24,871



20,858



17,748Investment Services


24,646



16,356



17,121Corporate


(41,437
)


(37,845
)


(37,595
)Purchase accounting amortization


(44,691
)


(57,037
)


(133,446
)Impact of warrants to a customer


(10,950
)






Impact of purchase accounting on
    deferred revenue


(12,387
)






Impact of SFAS 123( R)


(1,619
)


(4,133
)


Integration costs associated with
    acquisitions


(6,116
)






Reorganization charge










(5,585
)Write off of capitalized software










(1,039
)Income from continuing operations
    before other income and expenses

$
190,938


$
186,117


$
65,000Identifiable assets:Electronic Commerce

$
1,473,181


$
1,170,209


$
1,028,511Investment Services


98,758



59,902



43,161Software


308,202



110,278



118,252Corporate


251,137



417,640



379,992Total

$
2,131,278


$
1,758,029


$
1,569,916Capital Expenditures:Electronic Commerce

$
80,985


$
38,785


$
26,783Investment Services


9,692



8,206



6,246Software


3,507



2,023



651Corporate


483



903



923Total

$
94,667


$
49,917


$
34,603Depreciation and amortization:Electronic Commerce

$
69,869


$
78,907


$
157,756Investment Services


10,626



10,146



7,919Software


7,425



8,270



7,076Corporate


3,017



2,697



3,847Total

$
90,937


$
100,020


$
176,598  116




---



##### Table of Contents



2007


2006


2005Electronic CommercePayment transactions

$
630,018


$
587,809


$
523,031e-bill
    delivery


37,371



29,438



22,776Other


55,742



45,481



34,889Total Electronic Commerce


723,131



662,728



580,696Investment ServicesPortfolio management services


124,029



107,288



88,079SoftwareLicense


43,617



35,122



28,457Maintenance


47,587



38,093



30,701Professional fees


34,280



36,171



21,914Total Software


125,484



109,386



81,072Total consolidated revenue

$
972,644


$
879,402


$
749,847     Year Ended June 30,2007


2006United States

$
1,343,905


$
939,442Other


65,255



67,425Total

$
1,409,160


$
1,006,867  117




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##### Table of Contents



NOTE 20.
    SELECTED
    QUARTERLY FINANCIAL DATA (UNAUDITED)    Quarter EndedSeptember 30


December 31


March 31


June 30FISCAL 2007Total revenues, continuing
    operations

$
228,619


$
237,160


$
230,208


$
276,657Income from continuing operations

$
48,203


$
53,921


$
44,559


$
44,255Net income

$
31,217


$
35,277


$
30,020


$
27,924Basic earnings per share:Net income per common share

$
0.35


$
0.40


$
0.34


$
0.32Weighted average number of shares


89,962



87,976



87,437



87,855Diluted earnings per share:Net income per common share

$
0.34


$
0.39


$
0.33


$
0.31Weighted average number of shares


92,599



90,624



89,858



90,481   Quarter EndedSeptember 30


December 31


March 31


June 30FISCAL 2006Total revenues, continuing
    operations

$
213,693


$
213,844


$
226,927


$
224,938Income from continuing operations

$
40,307


$
51,606


$
48,863


$
45,341Net income

$
26,357


$
33,765


$
37,656


$
29,485Basic earnings per share:Net income per common share

$
0.29


$
0.37


$
0.41


$
0.32Weighted average number of shares


90,578



90,820



91,257



91,287Diluted earnings per share:Net income per common share

$
0.28


$
0.36


$
0.40


$
0.31Weighted average number of shares


92,818



93,589



94,199



94,232    118




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##### Table of Contents



NOTE 21.
    SUBSEQUENT
    EVENTS  Pending
    Acquisition
      Sale-Leaseback
    Transaction
  12-year
 119




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##### Table of Contents



SCHEDULE II 
    VALUATION AND QUALIFYING ACCOUNTS
    FOR THE YEARS ENDED JUNE 30, 2007, 2006 AND 2005
  BALANCE ASOF


CHARGES TO





BALANCE ASBEGINNING


COSTS AND





OF END OFOF PERIOD


EXPENSES


DEDUCTIONS


PERIOD(In thousands)Alllowance for Doubtful Accounts2007

$
1,509


$
2,033


$
439


$
3,1032006

$
2,571


$
(585
)

$
477


$
1,5092005

$
834


$
2,197


$
460


$
2,571Allowance for Returns2007

$
345


$
696


$
810


$
2312006

$
1,020


$
815


$
1,490


$
3452005

$
1,171


$
1,247


$
1,398


$
1,020  120




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##### Table of Contents



Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure.    Item 9A.
    Controls
    and Procedures.  Evaluation
    of Disclosure Controls and Procedures
    Rule 13a-15
    Management
    Report on Internal Control over Financial Reporting
  Internal
    Control  Integrated Framework
  Form 10-K.
  Changes
    in Internal Control over Financial Reporting
  Rules 13a-15(f) 15d-15(f)
  Item 9B.
    Other
    Information.   121




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##### Table of Contents



Part III  Item 10.
    Directors,
    Executive Officers and Corporate Governance.    Item 11.
    Executive
    Compensation.    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters.    Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence.   Item.
    14.  Principal Accountant Fees and Services.   122




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Part IV  Item 15.
    Exhibits
    and Financial Statement Schedules.                    Form 10-K
        ExhibitNumber

Exhibit Description2(a)

Agreement and Plan of Merger,
    dated August 2, 2007, among CheckFree Corporation, Fiserv,
    Inc. and Braves Acquisition Corp. (Reference is made to
    Exhibit 2.3 to the Quarterly Report on
    Form 10-Q
    of Fiserv, Inc. (File
    No. 0-14948)
    for the period ended June 30, 2007, filed with the
    Securities and Exchange Commission on August 3, 2007, and
    incorporated herein by reference.)2(b)

Amended and Restated Strategic
    Alliance Master Agreement, dated as of April 26, 2000,
    among CheckFree Holdings Corporation, CheckFree Services
    Corporation and Bank of America, N.A. (Reference is made to
    Appendix A to the Companys Proxy Statement for the
    Special Meeting of Stockholders held on September 28, 2000,
    filed with the Securities and Exchange Commission on
    August 25, 2000, and incorporated herein by reference.)2(c)

Agreement and Plan of Merger,
    dated December 29, 2006, among CheckFree Corporation, CFA
    Software Corporation, and Carreker Corporation. (Reference is
    made to Exhibit 2 to the Companys Current Report on
    Form 8-K
    dated December 29, 2006, filed with the Securities and
    Exchange Commission on January 3, 2007, and incorporated
    herein by reference.)2(d)

Agreement and Plan of Merger,
    dated February 13, 2007, among CheckFree Corporation, CF
    Oregon, Inc., and Corillian Corporation. (Reference is made to
    Exhibit 2 to the Companys Current Report on
    Form 8-K
    dated February 13, 2007, filed with the Securities and
    Exchange Commission on February 14, 2007, and incorporated
    herein by reference.)3(a)

Amended and Restated Certificate
    of Incorporation of the Company. (Reference is made to
    Exhibit 4(e) to the Companys Registration Statement
    on
    Form S-8
    (Registration
    No. 333-50322),
    filed with the Securities and Exchange Commission on
    November 20, 2000, and incorporated herein by reference.) 123




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##### Table of Contents



ExhibitNumber

Exhibit Description3(b)

Certificate of Ownership and
    Merger Merging CheckFree Corporation into CheckFree Holdings
    Corporation. (Reference is made to Exhibit 3(b) to the
    Companys Annual Report on
    Form 10-K
    for the year ended June 30, 2000, filed with the Securities
    and Exchange Commission on September 26, 2000, and
    incorporated herein by reference.)3(c)

Amended and Restated By-Laws of
    the Company, as of February 8, 2007. (Reference is made to
    Exhibit 3 to the Companys Quarterly Report on
    Form 10-Q
    for the quarterly period ended December 31, 2006, filed
    with the Securities and Exchange Commission on February 8,
    2007, and incorporated herein by reference.)3(d)

Form of Specimen Stock
    Certificate. (Reference is made to Exhibit 3(d) to the
    Companys Annual Report on
    Form 10-K
    for the year ended June 30, 2000, filed with the Securities
    and Exchange Commission on September 26, 2000, and
    incorporated herein by reference.)4(a)

Articles FOURTH, FIFTH,
    SEVENTH, EIGHTH, TENTH AND ELEVENTH of the Companys
    Amended and Restated Certificate of Incorporation (contained in
    the Companys Amended and Restated Certificate of
    Incorporation filed as Exhibit 3(a) hereto) and
    Articles II, III, IV, VI and VIII of the
    Companys By-Laws (contained in the Companys By-Laws
    filed as Exhibit 3(c) hereto.)4(b)

Rights Agreement, dated as of
    December 16, 1997, by and between the Company and The Fifth
    Third Bank, as Rights Agent. (Reference is made to
    Exhibit 4.1 to CheckFree Holdings Corporations
    Registration Statement on
    Form 8-A
    (File
    No. 001-12721),
    filed with the Securities and Exchange Commission on
    December 19, 1997, and incorporated herein by reference.)4(c)

Amendment No. 1 to the Rights
    Agreement, dated as of February 5, 1999, between CheckFree
    Holdings Corporation and The Fifth Third Bank, as Rights Agent.
    (Reference is made to Exhibit 4.2 to Amendment No. 1
    to the Companys Registration Statement on
    Form 8-A
    (File
    No. 0-26802),
    filed with the Securities and Exchange Commission on
    May 12, 1999, and incorporated herein by reference.)4(d)

Amendment No. 2 to the Rights
    Agreement, dated as of September 30, 2000, between
    CheckFree Corporation and The Fifth Third Bank, as Rights Agent.
    (Reference is made to Exhibit 4.3 to Amendment No. 1
    to the Companys Registration Statement on
    Form 8-A
    (File
    No. 0-26802),
    filed with the Securities and Exchange Commission on
    October 3, 2000, and incorporated herein by reference.)4(e)

Substitution of Successor Rights
    Agent and Amendment No. 3 to the Rights Agreement, dated as
    of January 25, 2002, between CheckFree Corporation and
    Wells Fargo Bank Minnesota, National Association, as Rights
    Agent. (Reference is made to Exhibit 4.4 to Amendment
    No. 3 to the Companys Registration Statement on
    Form 8-A
    (File
    No. 0-26802),
    filed with the Securities and Exchange Commission on
    January 29, 2002, and incorporated herein by reference.)4(f)

Amendment No. 4 to the Rights
    Agreement, dated as of August 2, 2007, between CheckFree
    Corporation and Wells Fargo Bank, National Association, as
    Rights Agent. (Reference is made to Exhibit 4.1 to the
    Companys Current Report on
    Form 8-K
    dated August 2, 2007, filed with the Securities and
    Exchange Commission on August 7, 2007, and incorporated
    herein by reference.)10(a)

CheckFree Services Corporation
    401(k) Plan Adoption Agreement (restatement as of June 15,
    2007).*10(b)

CheckFree Services Corporation
    Defined Contribution Plan and Trust, sponsored by SunTrust
    Bank  Basic Plan Document #02, June 2002 (Prototype
    plan for CheckFree Services Corporation 401(k) Plan) (Reference
    is made to Exhibit 10(b) to the Companys Quarterly
    Report on
    Form 10-Q
    for the quarterly period ended December 31, 2004, filed
    with the Securities and Exchange Commission on February 8,
    2005, and incorporated herein by reference.)10(c)

CheckFree Corporation 2006
    Associate Stock Purchase Plan (Reference is made to
    Exhibit 4(a) to the Companys Registration Statement
    on
    Form S-8
    (Registration
    No. 333-138845),
    filed with the Securities and Exchange Commission on
    November 20, 2006, and incorporated herein by reference)10(d)

CheckFree Corporation Amended and
    Restated 2002 Stock Incentive Plan. (Reference is made to
    Exhibit 4(a) to the Companys Registration Statement
    on
    Form S-8,
    as amended (Registration
    No. 333-101280),
    filed with the Securities and Exchange Commission on
    August 24, 2007 and incorporated herein by reference.)+10(e)

Form of Restricted Stock Award
    Agreement for Non-Employee Directors under the Amended and
    Restated 2002 Stock Incentive Plan. (Reference is made to
    Exhibit 10(d) to the Companys Quarterly Report on
    Form 10-Q
    for the quarterly period ended December 31, 2004, filed
    with the Securities and Exchange Commission on February 8,
    2005, and incorporated herein by reference.)+ 124




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ExhibitNumber

Exhibit Description10(f)

Form of Performance Accelerated
    Restricted Stock Award Agreement under the Amended and Restated
    2002 Stock Incentive Plan. (Reference is made to
    Exhibit 10.3 to the Companys Current Report on
    Form 8-K
    dated July 25, 2007, filed with the Securities and Exchange
    Commission on July 31, 2007, and incorporated herein by
    reference.)+10(g)

Form of Restricted Stock Award
    Agreement under the Amended and Restated 2002 Stock Incentive
    Plan. (Reference is made to Exhibit 10(f) to the
    Companys Quarterly Report on
    Form 10-Q
    for the quarterly period ended December 31, 2004, filed
    with the Securities and Exchange Commission on February 8,
    2005, and incorporated herein by reference.)+10(h)

Form of Nonstatutory Stock Option
    Agreement under the Amended and Restated 2002 Stock Incentive
    Plan. (Reference is made to Exhibit 10(g) to the
    Companys Quarterly Report on
    Form 10-Q
    for the quarterly period ended December 31, 2004, filed
    with the Securities and Exchange Commission on February 8,
    2005, and incorporated herein by reference.)+10(i)

Form of Incentive Stock Option
    Agreement under the Amended and Restated 2002 Stock Incentive
    Plan. (Reference is made to Exhibit 10(h) to the
    Companys Quarterly Report on
    Form 10-Q
    for the quarterly period ended December 31, 2004, filed
    with the Securities and Exchange Commission on February 8,
    2005, and incorporated herein by reference.)+10(j)

CheckFree Corporation Third
    Amended and Restated 1995 Stock Option Plan. (Reference is made
    to Exhibit 4(d) to the Companys Registration
    Statement on
    Form S-8,
    as amended (Registration
    No. 333-50322),
    filed with the Securities and Exchange Commission on
    November 20, 2000, and incorporated herein by reference.)+10(k)

CheckFree Corporation Amended and
    Restated Nonqualified Deferred Compensation Plan, dated
    July 26, 2007.*+10(l)

Form of Indemnification Agreement.
    (Reference is made to Exhibit 10(a) to the Companys
    Registration Statement on
    Form S-1,
    as amended (Registration
    No. 33-95738),
    filed with the Securities and Exchange Commission on
    August 14, 1995, and incorporated herein by reference.)+10(m)

Schedule identifying material
    details of Indemnification Agreements substantially identical to
    Exhibit 10(l). (Reference is made to Exhibit 10(i) to
    the Companys Annual Report on
    Form 10-K
    for the year ended June 30, 2003, filed with the Securities
    and Exchange Commission on September 15, 2003, and
    incorporated herein by reference.)+10(n)

Confidentiality and Noncompetition
    Agreement, dated May 7, 1999, between Peter J. Kight and
    the Company. (Reference is made to Exhibit 10(j) to the
    Companys Annual Report on
    Form 10-K
    for the year ended June 30, 2003, filed with the Securities
    and Exchange Commission on September 15, 2003, and
    incorporated herein by reference.)10(o)

Noncompetition Agreement, dated
    February 11, 2003, between Mark A. Johnson and the Company.
    (Reference is made to Exhibit 10(k) to the Companys
    Annual Report on
    Form 10-K
    for the year ended June 30, 2003, filed with the Securities
    and Exchange Commission on September 15, 2003, and
    incorporated herein by reference.)10(p)

Confidentiality and
    Nonsolicitation Agreement, dated February 11, 2003, between
    Mark A. Johnson and the Company. (Reference is made to
    Exhibit 10(l) to the Companys Annual Report on
    Form 10-K
    for the year ended June 30, 2003, filed with the Securities
    and Exchange Commission on September 15, 2003, and
    incorporated herein by reference.)10(q)

Executive Employment Agreement
    between the Company and Peter J. Kight. (Reference is made to
    Exhibit 10(z) to the Companys Annual Report on
    Form 10-K
    for the year ended June 30, 1997, filed with the Securities
    and Exchange Commission on September 26, 1997, and
    incorporated herein by reference.)+10(r)

CheckFree Corporation 2008
    Incentive Compensation Plan. (Reference is made to
    Exhibit 10.1 to the Companys Current Report on
    Form 8-K
    dated July 25, 2007, filed with the Securities Exchange
    Commission on July 31, 2007, and incorporated herein by
    reference.)+10(s)

Description of Compensation
    Arrangements Approved by the Compensation Committee of the Board
    of Directors for the Companys Named Executive Officers in
    Fiscal Year 2008 and for the Companys Non-Management
    Directors in Fiscal Year 2008 (Reference is made to
    Item 5.02 of the Companys Current Report on
    Form 8-K
    dated July 25, 2007, filed with the Securities and Exchange
    Commission on July 31, 2007, and incorporated herein by
    reference.)+ 125




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ExhibitNumber

Exhibit Description10(t)

Form of Retention Agreement dated
    as of July 27, 2007 between CheckFree Corporation and each
    of its executive officers. (Reference is made to
    Exhibit 10.2 to the Companys Current Report on
    Form 8-K
    dated July 25, 2007, filed with the Securities and Exchange
    Commission on July 31, 2007, and incorporated herein by
    reference.)+10(u)

Form of Amendment to Retention
    Agreement dated as of August 2, 2007 between CheckFree
    Corporation and each of Peter J. Kight, David E. Mangum, Stephen
    E. Olsen, Alex Hart, Jardon Bouska and
    Michael P. Gianoni. (Reference is made to
    Exhibit 10.1 to the Companys Current Report on
    Form 8-K
    dated August 2, 2007, filed with the Securities and
    Exchange Commission on August 7, 2007, and incorporated
    herein by reference.)+10(v)

Letter Agreement, dated
    February 16, 2007, between Matthew S. Lewis and CheckFree
    Services Corporation (Reference is made to Exhibit 10(a) to
    the Companys Current Report on
    Form 8-K
    dated February 15, 2007, filed with the Securities and
    Exchange Commission on February 22, 2007, and incorporated
    herein by reference).+10(w)

Individual Separation Agreement
    and General Release, dated as of August 14, 2007, by and
    among CheckFree Corporation, CheckFree Services Corporation and
    Randal A. McCoy. (Reference is made to Exhibit 10(a) to the
    Companys Current Report on
    Form 8-K
    dated August 14, 2007, filed with the Securities and
    Exchange Commission on August 20, 2007, and incorporated
    herein by reference.)+10(x)

Master Agreement, dated
    August 5, 2003, among Bastogne, Inc., CheckFree Services
    Corporation and SunTrust Bank. (Reference is made to
    Exhibit 10(v) to the Companys Annual Report on
    Form 10-K
    for the year ended June 30, 2003, filed with the Securities
    and Exchange Commission on September 15, 2003, and
    incorporated herein by reference.)**10(y)

Revolving Credit Agreement, dated
    August 20, 2004, among CheckFree Corporation, CheckFree
    Services Corporation and CheckFree Investment Corporation, as
    Borrowers, the lenders from time to time party thereto, SunTrust
    Bank, as Administrative Agent, Bank of America, N.A., as
    Syndication Agent and KeyBank National Association, US Bank and
    BNP Paribas, as Documentation Agents, SunTrust Capital Markets,
    Inc. as Joint Lead Arranger and Sole Book Runner and Banc of
    America Securities, LLC as Joint Lead Arranger. (Reference is
    made to Exhibit 10.1 to the Companys Current Report
    on
    Form 8-K
    filed with the Securities and Exchange Commission on
    August 25, 2004, and incorporated herein by reference.)10(z)

First Amendment to Revolving
    Credit Agreement, made and entered into as of December 7,
    2004, by and among CheckFree Corporation, CheckFree Services
    Corporation, and CheckFree Investment Corporation, the several
    banks and other financial institutions from time to time party
    thereto (the Lenders), and Sun Trust Bank, in
    its capacity as Administrative Agent for the Lenders, as Issuing
    Bank, and as Swingline Lender. (Reference is made to
    Exhibit 10(c) to the Companys Quarterly Report on
    Form 10-Q
    for the quarterly period ended December 31, 2004, filed
    with the Securities and Exchange Commission on February 8,
    2005, and incorporated herein by reference.)10(aa)

Revolving Credit Agreement, dated
    April 13, 2006, among CheckFree Corporation, CheckFree
    Services Corporation and CheckFree Investment Corporation, as
    Borrowers, the lenders from time to time party thereto, SunTrust
    Bank, as Administrative Agent, Bank of America, N.A., as
    Syndication Agent, and KeyBank National Association, US Bank,
    National Association, and Mizuho Corporate Bank, Ltd., as
    Documentation Agents, SunTrust Capital Markets, Inc. as Joint
    Lead Arranger and Sole Book Runner and Banc of America
    Securities, LLC as Joint Lead Arranger. (Reference is made to
    Exhibit 10.1 to the Companys Current Report on
    Form 8-K
    filed with the Securities and Exchange Commission on
    April 19, 2006, and incorporated herein by reference.)10(bb)

Master Agreement, dated
    April 13, 2006, among CheckFree Corporation, as Guarantor,
    and CheckFree Services Corporation, as Lessee and Construction
    Agent, SunTrust Bank, as Lessor, certain financial institutions
    parties thereto, as Lenders, SunTrust Equity Funding, LLC, as
    Agent and Sole Arranger, US Bank, National Association, Mizuho
    Corporate Bank (USA) and KeyBank National Association, each as
    Co-Documentation Agents, and Bank of America, N.A., as
    Syndication Agent. (Reference is made to Exhibit 10.2 to
    the Companys Current Report on
    Form 8-K
    filed with the Securities and Exchange Commission on
    April 19, 2006, and incorporated herein by reference.) 126




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ExhibitNumber

Exhibit Description10(cc)

Master Lease Agreement, dated
    April 13, 2006, between CheckFree Services Corporation, as
    Lessee, and SunTrust Bank, as Lessor. (Reference is made to
    Exhibit 10.3 to the Companys Current Report on
    Form 8-K
    filed with the Securities and Exchange Commission on
    April 19, 2006, and incorporated herein by reference.)10(dd)

Construction Agency Agreement,
    dated April 13, 2006, between SunTrust Bank and CheckFree
    Services Corporation, as Construction Agent. (Reference is made
    to Exhibit 10.4 to the Companys Current Report on
    Form 8-K
    filed with the Securities and Exchange Commission on
    April 19, 2006, and incorporated herein by reference.)10(ee)

First Amendment to Master
    Agreement, dated April 13, 2006, among Bastogne, Inc.,
    CheckFree Services Corporation, CheckFree Corporation, and
    SunTrust Bank. (Reference is made to Exhibit 10.5 to the
    Companys Current Report on
    Form 8-K
    filed with the Securities and Exchange Commission on
    April 19, 2006, and incorporated herein by reference.)21

Subsidiaries of the Company.*23

Consent of Deloitte &
    Touche LLP.*24

Power of Attorney.*31(a)

Certification pursuant to Exchange
    Act
    Rules 13a-14(a)
    and 15d-14(a) of the Chief Executive Officer.*31(b)

Certification pursuant to Exchange
    Act
    Rules 13a-14(a)
    and 15d-14(a) of the Chief Financial Officer.*32(a)

Certification pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002, of the Chief
    Executive Officer.***32(b)

Certification pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002, of the Chief
    Financial Officer.***     *
    
    Filed with this report.**
    
    Portions of this Exhibit have been given confidential treatment
    by the Securities and Exchange Commission.***
    
    Furnished with this report.+
    
    Management contract or compensatory plan or arrangement required
    to be identified pursuant to Item 15(a)(3) of this Annual
    Report on
    Form 10-K.  (b)
    
    Exhibits.    (c)
    
    Financial Statement Schedules.  Form 10-K.
 127




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SIGNATURES    CHECKFREE CORPORATION
  Date: August 24, 2007

By: /s/  David
    E. MangumDavid E.
    Mangum, Executive Vice
    President and Chief Financial Officer     /s/  Peter
    J. KightPeter
    J. Kight

Chairman of the Board and Chief
    Executive Officer
    (Principal Executive Officer)/s/  David
    E. MangumDavid
    E. Mangum

Executive Vice President and Chief
    Financial Officer 
    (Principal Financial Officer)/s/  Samuel
    R. SchwartzSamuel
    R. Schwartz

Senior Vice President and Chief
    Accounting Officer
    (Principal Accounting Officer)*William P.
    BoardmanWilliam
    P. Boardman

Director*C. Beth
    CotnerC.
    Beth Cotner

Director*James D.
    DixonJames
    D. Dixon

Director*Mark A.
    JohnsonMark
    A. Johnson

Director*Eugene F.
    QuinnEugene
    F. Quinn

Director*Jeffrey M.
    WilkinsJeffrey
    M. Wilkins

Director*By: /s/  Curtis
    A. LovelandCurtis
    A.
    Loveland,     Attorney-in-Fact  128




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EXHIBIT INDEX
  ExhibitNumber

Exhibit Description2(a)

Agreement and Plan of Merger,
    dated August 2, 2007, among CheckFree Corporation, Fiserv,
    Inc. and Braves Acquisition Corp. (Reference is made to
    Exhibit 2.3 to the Quarterly Report on
    Form 10-Q
    of Fiserv, Inc. (File
    No. 0-14948)
    for the period ended June 30, 2007, filed with the
    Securities and Exchange Commission on August 3, 2007, and
    incorporated herein by reference.)2(b)

Amended and Restated Strategic
    Alliance Master Agreement, dated as of April 26, 2000,
    among CheckFree Holdings Corporation, CheckFree Services
    Corporation and Bank of America, N.A. (Reference is made to
    Appendix A to the Companys Proxy Statement for the
    Special Meeting of Stockholders held on September 28, 2000,
    filed with the Securities and Exchange Commission on
    August 25, 2000, and incorporated herein by reference.)2(c)

Agreement and Plan of Merger,
    dated December 29, 2006, among CheckFree Corporation, CFA
    Software Corporation, and Carreker Corporation. (Reference is
    made to Exhibit 2 to the Companys Current Report on
    Form 8-K
    dated December 29, 2006, filed with the Securities and
    Exchange Commission on January 3, 2007, and incorporated
    herein by reference.)2(d)

Agreement and Plan of Merger,
    dated February 13, 2007, among CheckFree Corporation, CF
    Oregon, Inc., and Corillian Corporation. (Reference is made to
    Exhibit 2 to the Companys Current Report on
    Form 8-K
    dated February 13, 2007, filed with the Securities and
    Exchange Commission on February 14, 2007, and incorporated
    herein by reference.)3(a)

Amended and Restated Certificate
    of Incorporation of the Company. (Reference is made to
    Exhibit 4(e) to the Companys Registration Statement
    on
    Form S-8
    (Registration
    No. 333-50322),
    filed with the Securities and Exchange Commission on
    November 20, 2000, and incorporated herein by reference.)3(b)

Certificate of Ownership and
    Merger Merging CheckFree Corporation into CheckFree Holdings
    Corporation. (Reference is made to Exhibit 3(b) to the
    Companys Annual Report on
    Form 10-K
    for the year ended June 30, 2000, filed with the Securities
    and Exchange Commission on September 26, 2000, and
    incorporated herein by reference.)3(c)

Amended and Restated By-Laws of
    the Company, as of February 8, 2007. (Reference is made to
    Exhibit 3 to the Companys Quarterly Report on
    Form 10-Q
    for the quarterly period ended December 31, 2006, filed
    with the Securities and Exchange Commission on February 8,
    2007, and incorporated herein by reference.)3(d)

Form of Specimen Stock
    Certificate. (Reference is made to Exhibit 3(d) to the
    Companys Annual Report on
    Form 10-K
    for the year ended June 30, 2000, filed with the Securities
    and Exchange Commission on September 26, 2000, and
    incorporated herein by reference.)4(a)

Articles FOURTH, FIFTH,
    SEVENTH, EIGHTH, TENTH AND ELEVENTH of the Companys
    Amended and Restated Certificate of Incorporation (contained in
    the Companys Amended and Restated Certificate of
    Incorporation filed as Exhibit 3(a) hereto) and
    Articles II, III, IV, VI and VIII of the
    Companys By-Laws (contained in the Companys By-Laws
    filed as Exhibit 3(c) hereto.)4(b)

Rights Agreement, dated as of
    December 16, 1997, by and between the Company and The Fifth
    Third Bank, as Rights Agent. (Reference is made to
    Exhibit 4.1 to CheckFree Holdings Corporations
    Registration Statement on
    Form 8-A
    (File
    No. 001-12721),
    filed with the Securities and Exchange Commission on
    December 19, 1997, and incorporated herein by reference.)4(c)

Amendment No. 1 to the Rights
    Agreement, dated as of February 5, 1999, between CheckFree
    Holdings Corporation and The Fifth Third Bank, as Rights Agent.
    (Reference is made to Exhibit 4.2 to Amendment No. 1
    to the Companys Registration Statement on
    Form 8-A
    (File
    No. 0-26802),
    filed with the Securities and Exchange Commission on
    May 12, 1999, and incorporated herein by reference.)4(d)

Amendment No. 2 to the Rights
    Agreement, dated as of September 30, 2000, between
    CheckFree Corporation and The Fifth Third Bank, as Rights Agent.
    (Reference is made to Exhibit 4.3 to Amendment No. 1
    to the Companys Registration Statement on
    Form 8-A
    (File
    No. 0-26802),
    filed with the Securities and Exchange Commission on
    October 3, 2000, and incorporated herein by reference.) 129




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ExhibitNumber

Exhibit Description4(e)

Substitution of Successor Rights
    Agent and Amendment No. 3 to the Rights Agreement, dated as
    of January 25, 2002, between CheckFree Corporation and
    Wells Fargo Bank Minnesota, National Association, as Rights
    Agent. (Reference is made to Exhibit 4.4 to Amendment
    No. 3 to the Companys Registration Statement on
    Form 8-A
    (File
    No. 0-26802),
    filed with the Securities and Exchange Commission on
    January 29, 2002, and incorporated herein by reference.)4(f)

Amendment No. 4 to the Rights
    Agreement, dated as of August 2, 2007, between CheckFree
    Corporation and Wells Fargo Bank, National Association, as
    Rights Agent. (Reference is made to Exhibit 4.1 to the
    Companys Current Report on
    Form 8-K
    dated August 2, 2007, filed with the Securities and
    Exchange Commission on August 7, 2007, and incorporated
    herein by reference.)10(a)

CheckFree Services Corporation
    401(k) Plan Adoption Agreement (restatement as of June 15,
    2007).*10(b)

CheckFree Services Corporation
    Defined Contribution Plan and Trust, sponsored by SunTrust
    Bank  Basic Plan Document #02, June 2002 (Prototype
    plan for CheckFree Services Corporation 401(k) Plan) (Reference
    is made to Exhibit 10(b) to the Companys Quarterly
    Report on
    Form 10-Q
    for the quarterly period ended December 31, 2004, filed
    with the Securities and Exchange Commission on February 8,
    2005, and incorporated herein by reference.)10(c)

CheckFree Corporation 2006
    Associate Stock Purchase Plan (Reference is made to
    Exhibit 4(a) to the Companys Registration Statement
    on
    Form S-8
    (Registration
    No. 333-138845),
    filed with the Securities and Exchange Commission on
    November 20, 2006, and incorporated herein by reference).10(d)

CheckFree Corporation Amended and
    Restated 2002 Stock Incentive Plan. (Reference is made to
    Exhibit 4(a) to the Companys Registration Statement
    on
    Form S-8,
    as amended (Registration
    No. 333-101280),
    filed with the Securities and Exchange Commission on
    August 24, 2007 and incorporated herein by reference.)+10(e)

Form of Restricted Stock Award
    Agreement for Non-Employee Directors under the Amended and
    Restated 2002 Stock Incentive Plan. (Reference is made to
    Exhibit 10(d) to the Companys Quarterly Report on
    Form 10-Q
    for the quarterly period ended December 31, 2004, filed
    with the Securities and Exchange Commission on February 8,
    2005, and incorporated herein by reference.)+10(f)

Form of Performance Accelerated
    Restricted Stock Award Agreement under the Amended and Restated
    2002 Stock Incentive Plan. (Reference is made to
    Exhibit 10.3 to the Companys Current Report on
    Form 8-K
    dated July 25, 2007, filed with the Securities and Exchange
    Commission on July 31, 2007, and incorporated herein by
    reference.)+10(g)

Form of Restricted Stock Award
    Agreement under the Amended and Restated 2002 Stock Incentive
    Plan. (Reference is made to Exhibit 10(f) to the
    Companys Quarterly Report on
    Form 10-Q
    for the quarterly period ended December 31, 2004, filed
    with the Securities and Exchange Commission on February 8,
    2005, and incorporated herein by reference.)+10(h)

Form of Nonstatutory Stock Option
    Agreement under the Amended and Restated 2002 Stock Incentive
    Plan. (Reference is made to Exhibit 10(g) to the
    Companys Quarterly Report on
    Form 10-Q
    for the quarterly period ended December 31, 2004, filed
    with the Securities and Exchange Commission on February 8,
    2005, and incorporated herein by reference.)+10(i)

Form of Incentive Stock Option
    Agreement under the Amended and Restated 2002 Stock Incentive
    Plan. (Reference is made to Exhibit 10(h) to the
    Companys Quarterly Report on
    Form 10-Q
    for the quarterly period ended December 31, 2004, filed
    with the Securities and Exchange Commission on February 8,
    2005, and incorporated herein by reference.)+10(j)

CheckFree Corporation Third
    Amended and Restated 1995 Stock Option Plan. (Reference is made
    to Exhibit 4(d) to the Companys Registration
    Statement on
    Form S-8,
    as amended (Registration
    No. 333-50322),
    filed with the Securities and Exchange Commission on
    November 20, 2000, and incorporated herein by reference.)+10(k)

CheckFree Corporation Amended and
    Restated Nonqualified Deferred Compensation Plan, dated
    July 26, 2007.*+10(l)

Form of Indemnification Agreement.
    (Reference is made to Exhibit 10(a) to the Companys
    Registration Statement on
    Form S-1,
    as amended (Registration
    No. 33-95738),
    filed with the Securities and Exchange Commission on
    August 14, 1995, and incorporated herein by reference.)+ 130




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##### Table of Contents



ExhibitNumber

Exhibit Description10(m)

Schedule identifying material
    details of Indemnification Agreements substantially identical to
    Exhibit 10(l). (Reference is made to Exhibit 10(i) to
    the Companys Annual Report on
    Form 10-K
    for the year ended June 30, 2003, filed with the Securities
    and Exchange Commission on September 15, 2003, and
    incorporated herein by reference.)+10(n)

Confidentiality and Noncompetition
    Agreement, dated May 7, 1999, between Peter J. Kight and
    the Company. (Reference is made to Exhibit 10(j) to the
    Companys Annual Report on
    Form 10-K
    for the year ended June 30, 2003, filed with the Securities
    and Exchange Commission on September 15, 2003, and
    incorporated herein by reference.)10(o)

Noncompetition Agreement, dated
    February 11, 2003, between Mark A. Johnson and the Company.
    (Reference is made to Exhibit 10(k) to the Companys
    Annual Report on
    Form 10-K
    for the year ended June 30, 2003, filed with the Securities
    and Exchange Commission on September 15, 2003, and
    incorporated herein by reference.)10(p)

Confidentiality and
    Nonsolicitation Agreement, dated February 11, 2003, between
    Mark A. Johnson and the Company. (Reference is made to
    Exhibit 10(l) to the Companys Annual Report on
    Form 10-K
    for the year ended June 30, 2003, filed with the Securities
    and Exchange Commission on September 15, 2003, and
    incorporated herein by reference.)10(q)

Executive Employment Agreement
    between the Company and Peter J. Kight. (Reference is made to
    Exhibit 10(z) to the Companys Annual Report on
    Form 10-K
    for the year ended June 30, 1997, filed with the Securities
    and Exchange Commission on September 26, 1997, and
    incorporated herein by reference.)+10(r)

CheckFree Corporation 2008
    Incentive Compensation Plan. (Reference is made to
    Exhibit 10.1 to the Companys Current Report on
    Form 8-K
    dated July 25, 2007, filed with the Securities Exchange
    Commission on July 31, 2007, and incorporated herein by
    reference.)+10(s)

Description of Compensation
    Arrangements Approved by the Compensation Committee of the Board
    of Directors for the Companys Named Executive Officers in
    Fiscal Year 2008 and for the Companys Non-Management
    Directors in Fiscal Year 2008 (Reference is made to
    Item 5.02 of the Companys Current Report on
    Form 8-K
    dated July 25, 2007, filed with the Securities and Exchange
    Commission on July 31, 2007, and incorporated herein by
    reference.)+10(t)

Form of Retention Agreement dated
    as of July 27, 2007 between CheckFree Corporation and each
    of its executive officers. (Reference is made to
    Exhibit 10.2 to the Companys Current Report on
    Form 8-K
    dated July 25, 2007, filed with the Securities and Exchange
    Commission on July 31, 2007, and incorporated herein by
    reference.)+10(u)

Form of Amendment to Retention
    Agreement dated as of August 2, 2007 between CheckFree
    Corporation and each of Peter J. Kight, David E. Mangum, Stephen
    E. Olsen, Alex Hart, Jardon Bouska and
    Michael P. Gianoni. (Reference is made to
    Exhibit 10.1 to the Companys Current Report on
    Form 8-K
    dated August 2, 2007, filed with the Securities and
    Exchange Commission on August 7, 2007, and incorporated
    herein by reference.)+10(v)

Letter Agreement, dated
    February 16, 2007, between Matthew S. Lewis and CheckFree
    Services Corporation (Reference is made to Exhibit 10(a) to
    the Companys Current Report on
    Form 8-K
    dated February 15, 2007, filed with the Securities and
    Exchange Commission on February 22, 2007, and incorporated
    herein by reference).+10(w)

Individual Separation Agreement
    and General Release, dated as of August 14, 2007, by and
    among CheckFree Corporation, CheckFree Services Corporation and
    Randal A. McCoy. (Reference is made to Exhibit 10(a) to the
    Companys Current Report on
    Form 8-K
    dated August 14, 2007, filed with the Securities and
    Exchange Commission on August 20, 2007, and incorporated
    herein by reference.)+10(x)

Master Agreement, dated
    August 5, 2003, among Bastogne, Inc., CheckFree Services
    Corporation and SunTrust Bank. (Reference is made to
    Exhibit 10(v) to the Companys Annual Report on
    Form 10-K
    for the year ended June 30, 2003, filed with the Securities
    and Exchange Commission on September 15, 2003, and
    incorporated herein by reference.)**10(y)

Revolving Credit Agreement, dated
    August 20, 2004, among CheckFree Corporation, CheckFree
    Services Corporation and CheckFree Investment Corporation, as
    Borrowers, the lenders from time to time party thereto, SunTrust
    Bank, as Administrative Agent, Bank of America, N.A., as
    Syndication Agent and KeyBank National Association, US Bank and
    BNP Paribas, as Documentation Agents, SunTrust Capital Markets,
    Inc. as Joint Lead Arranger and Sole Book Runner and Banc of
    America Securities, LLC as Joint Lead Arranger. (Reference is
    made to Exhibit 10.1 to the Companys Current Report
    on
    Form 8-K
    filed with the Securities and Exchange Commission on
    August 25, 2004, and incorporated herein by reference.) 131




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##### Table of Contents



ExhibitNumber

Exhibit Description10(z)

First Amendment to Revolving
    Credit Agreement, made and entered into as of December 7,
    2004, by and among CheckFree Corporation, CheckFree Services
    Corporation, and CheckFree Investment Corporation, the several
    banks and other financial institutions from time to time party
    thereto (the Lenders), and Sun Trust Bank, in
    its capacity as Administrative Agent for the Lenders, as Issuing
    Bank, and as Swingline Lender. (Reference is made to
    Exhibit 10(c) to the Companys Quarterly Report on
    Form 10-Q
    for the quarterly period ended December 31, 2004, filed
    with the Securities and Exchange Commission on February 8,
    2005, and incorporated herein by reference.)10(aa)

Revolving Credit Agreement, dated
    April 13, 2006, among CheckFree Corporation, CheckFree
    Services Corporation and CheckFree Investment Corporation, as
    Borrowers, the lenders from time to time party thereto, SunTrust
    Bank, as Administrative Agent, Bank of America, N.A., as
    Syndication Agent, and KeyBank National Association, US Bank,
    National Association, and Mizuho Corporate Bank, Ltd., as
    Documentation Agents, SunTrust Capital Markets, Inc. as Joint
    Lead Arranger and Sole Book Runner and Banc of America
    Securities, LLC as Joint Lead Arranger. (Reference is made to
    Exhibit 10.1 to the Companys Current Report on
    Form 8-K
    filed with the Securities and Exchange Commission on
    April 19, 2006, and incorporated herein by reference.)10(bb)

Master Agreement, dated
    April 13, 2006, among CheckFree Corporation, as Guarantor,
    and CheckFree Services Corporation, as Lessee and Construction
    Agent, SunTrust Bank, as Lessor, certain financial institutions
    parties thereto, as Lenders, SunTrust Equity Funding, LLC, as
    Agent and Sole Arranger, US Bank, National Association, Mizuho
    Corporate Bank (USA) and KeyBank National Association, each as
    Co-Documentation Agents, and Bank of America, N.A., as
    Syndication Agent. (Reference is made to Exhibit 10.2 to
    the Companys Current Report on
    Form 8-K
    filed with the Securities and Exchange Commission on
    April 19, 2006, and incorporated herein by reference.)10(cc)

Master Lease Agreement, dated
    April 13, 2006, between CheckFree Services Corporation, as
    Lessee, and SunTrust Bank, as Lessor. (Reference is made to
    Exhibit 10.3 to the Companys Current Report on
    Form 8-K
    filed with the Securities and Exchange Commission on
    April 19, 2006, and incorporated herein by reference.)10(dd)

Construction Agency Agreement,
    dated April 13, 2006, between SunTrust Bank and CheckFree
    Services Corporation, as Construction Agent. (Reference is made
    to Exhibit 10.4 to the Companys Current Report on
    Form 8-K
    filed with the Securities and Exchange Commission on
    April 19, 2006, and incorporated herein by reference.)10(ee)

First Amendment to Master
    Agreement, dated April 13, 2006, among Bastogne, Inc.,
    CheckFree Services Corporation, CheckFree Corporation, and
    SunTrust Bank. (Reference is made to Exhibit 10.5 to the
    Companys Current Report on
    Form 8-K
    filed with the Securities and Exchange Commission on
    April 19, 2006, and incorporated herein by reference.)21

Subsidiaries of the Company.*23

Consent of Deloitte &
    Touche LLP.*24

Power of Attorney.*31(a)

Certification pursuant to Exchange
    Act
    Rules 13a-14(a)
    and 15d-14(a) of the Chief Executive Officer.*31(b)

Certification pursuant to Exchange
    Act
    Rules 13a-14(a)
    and 15d-14(a) of the Chief Financial Officer.*32(a)

Certification pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002, of the Chief
    Executive Officer.***32(b)

Certification pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002, of the Chief
    Financial Officer.***     *
    
    Filed with this report.**
    
    Portions of this Exhibit have been given confidential treatment
    by the Securities and Exchange Commission.***
    
    Furnished with this report.+
    
    Management contract or compensatory plan or arrangement required
    to be identified pursuant to Item 15(a)(3) of this Annual
    Report on
    Form 10-K. 132