##### Table of Contents



UNITED
    STATES SECURITIES AND EXCHANGE COMMISSION
    Washington, D.C. 20549
     FORM 10-K
    þ

Annual report pursuant to
    Section 13 or 15(d) of the Securities Exchange Act of
    1934For the year ended
    December 31, 2006oro

Transition report pursuant to
    Section 13 or 15(d) of the Securities Exchange Act of
    1934   Commission File Number:
    0-25871
  INFORMATICA
    CORPORATION
 (Exact name of registrant as
    specified in its charter)
  Delaware

77-0333710(State or other jurisdiction of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)   100 Cardinal Way
 Redwood City, California
    94063
 (Address of principal executive
    offices and zip code)
  (650) 385-5000
 (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, par value
    $0.001 per share

The NASDAQ Stock Market LLC(Including associated Preferred
    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
 Large accelerated
    filer þ Accelerated
    filer o Non-accelerated
    filer o
  Rule 12b-2 o þ
      DOCUMENTS INCORPORATED BY
    REFERENCE
  Form 10-K




---



##### 



INFORMATICA
    CORPORATION
  TABLE OF
    CONTENTS
  Page No.PART IItem 1.


Business


2Item 1A.


Risk
    Factors


9Item 1B.


Unresolved Staff
    Comments


21Item 2.


Properties


21Item 3.


Legal
    Proceedings


22Item 4.


Submission of
    Matters to a Vote of Security Holders


23Executive Officers
    of the Registrant


23PART IIItem 5.


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


24Item 6.


Selected Financial
    Data


26Item 7.


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


28Item 7A.


Quantitative and
    Qualitative Disclosures About Market Risk


43Item 8.


Financial
    Statements and Supplementary Data


44Item 9.


Changes in and
    Disagreements with Accountants on Accounting and Financial
    Disclosure


85Item 9A.


Controls and
    Procedures


85Item 9B.


Other
    Information


85PART IIIItem 10.


Directors,
    Executive Officers and Corporate Governance


85Item 11.


Executive
    Compensation


85Item 12.


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


86Item 13.


Certain
    Relationships and Related Transactions, and Director
    Independence


86Item 14.


Principal
    Accountant Fees and Services


86PART IVItem 15.


Exhibits and
    Financial Statement Schedules


86Signatures


88EXHIBIT 2.1EXHIBIT 21.1EXHIBIT 23.1EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1   1




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PART I  ITEM 1.
    BUSINESS  Overview
          and/or
   2




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(650) 385-5000. www.informatica.com
  Form 10-K, Form 10-Q, Form 8-K, www.sec.gov.
  Recent
    Developments
        Our
    Products
           3




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##### Table of Contents



PowerCenter 8 Standard Edition (SE)
  PowerCenter 8 Advanced Edition (AE)
  Informatica PowerExchange
  Informatica Data Explorer easy-to-use
  Informatica Data Quality
  Additional Options.
  1.
    Data Cleanse and Match Optionsupplies powerful,
    integrated cleansing and matching capabilities. This option
    corrects and removes duplicate customer data to maximize the
    value of an organizations information assets.2.
    Data Federation Optionprovides virtual data
    federation services or Enterprise Information Integration (EII)
    capabilities. Combining traditional physical and virtual data
    integration approaches in a single platform, this option creates
    a powerful tool for delivering holistic data quickly, easily,
    and cost-effectively.3.
    Data Profiling Optionoffers comprehensive,
    accurate information about the content, quality, and structure
    of data in virtually any operational system.4.
    Enterprise Grid Optionprovides scalability within
    a grid computing environment. This option reduces the
    administrative overhead of supporting a grid. It also delivers
    optimal performance by automatically load balancing in response
    to runtime changes in data volumes or node utilization rates.5.
    High Availability Optionprovides high
    availability and seamless failover and recovery of all
    PowerCenter components. This option minimizes service
    interruption in the event of a hardware
    and/or
    software outage and reduces costs associated with data downtime.6.
    Mapping Generation Optionprovides the ability to
    automatically generate PowerCenter data integration mappings
    from best practice templates, as well as the ability to
    reverse-engineer existing mappings into reusable template form.
    This option increases developer productivity, reduces
    time-to-results,
    and simplifies the data integration lifecycle. 4




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7.
    Metadata Exchange Optionscoordinate technical and
    business metadata from data modeling tools, business
    intelligence tools, source and target database catalogs, and
    PowerCenter repositories. This family of options helps
    organizations leverage the time and effort already invested in
    defining data structures.8.
    Partitioning Optionexecutes optimal parallel
    sessions by dividing data processing into subsets that run in
    parallel and are spread among available CPUs in a
    multi-processor system. This option helps organizations maximize
    their technology investments by enabling hardware and software
    to jointly scale to handle large volumes of data and users.9.
    PowerCenter Connect Optionsextend broad
    connectivity to enterprise data. This family of options
    eliminates the need for manually coding data extraction programs
    and ensures that mission-critical operational data can be
    leveraged across the enterprise.10.
    Pushdown Optimization Optionenables data
    transformation processing, where appropriate, to be pushed
    down into any relational database. This option saves
    hardware costs by making better use of existing database assets
    and helps organizations cost-effectively scale to meet increased
    data demand.  
    Real Time Optionextends PowerCenters
    capabilities to transform and process operational data in real
    time. This option helps organizations integrate real-time
    operational data with historical information stored in
    enterprise data warehouses, powering business processes and
    accelerating decision-making.
    Unstructured Data Option expands
    PowerCenters data access capabilities to include
    unstructured and semi-structured data formats. This option
    provides organizations with virtually unlimited access to all
    enterprise data formats, creating a powerful tool to help
    organizations achieve a holistic view of data, increase IT
    productivity, and achieve regulatory compliance.  Services
         5




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Our
    Strategic Partners
  and/or
  Our
    Customers
  end-to-end
  Our
    Market Strategy
  Broader Enterprise Data Integration: Beyond the Data
    Warehouse.
  Data Quality: Strategic Product and Market Opportunity.
  Horizontal Data Integration Solutions: Migration and
    Consolidation.
  Informatica On Demand: Solving the Cross-Enterprise Data
    Integration Challenge.
 6




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Complex Data Exchange: Integrating Additional Data
    Formats.
  Customers and Developers: Leveraging Installed Base and
    Community to Extend Informaticas Presence.
  Partnerships and Strategic Alliances: Extending the
    Ecosystem.
  Sales,
    Marketing, and Distribution
          Research
    and Development
   7




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Future
    Revenues (New Orders, Backlog, and Deferred Revenue)
    Competition
      If we do not compete effectively
    with companies selling data integration products, our revenues
    may not grow and could decline
 8




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Seasonality
    Intellectual
    Property and Other Proprietary Rights
      Employees
   ITEM 1A. RISK
    FACTORS  Form 10-K,
  If we
    do not compete effectively with companies selling data
    integration products, our revenues may not grow and could
    decline.
     9




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New
    product introductions and product enhancements may impact market
    acceptance of our products and affect our results of
    operations.
  and/or
  n
    delay in completion, launch, delivery, or availability;n
    delay in customer purchases in anticipation of new products not
    yet released;n
    product quality issues, including the possibility of defects;n
    market confusion based on changes to the product packaging and
    pricing as a result of a new product release;n
    interoperability issues with third-party technologies;n
    loss of existing customers that choose a competitors
    product instead of upgrading or migrating to the new
    product; andn
    loss of maintenance revenues from existing customers that do not
    upgrade or migrate.    We
    have experienced and could continue to experience fluctuations
    in our quarterly operating results, especially the amount of
    license revenues we recognize each quarter, and such
    fluctuations have caused and could cause our stock price to
    decline.
       10




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quarter-to-quarter
  If we
    are unable to accurately forecast revenues, we may fail to meet
    stock analysts and investors expectations of our
    quarterly operating results, which could cause our stock price
    to decline.
    We
    have experienced reduced sales pipeline and pipeline conversion
    rates in prior years, which have adversely affected the growth
    of our company and the price of our common stock.
    We
    rely on our relationships with our strategic partners. If we do
    not maintain and strengthen these relationships, our ability to
    generate revenue and control expenses could be adversely
    affected, which could cause a decline in the price of our common
    stock.
   11




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Our
    international operations expose us to greater risks, including
    but not limited to those regarding intellectual property,
    collections, exchange rate fluctuations, and regulations, which
    could limit our future growth.
         12




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n
    greater difficulty in protecting our ownership rights to
    intellectual property developed in foreign countries, which may
    have laws that materially differ from those in the United States;n
    communication delays between our main development center in
    Redwood City, California and our development centers in India,
    Ireland, Israel, the Netherlands, and the United Kingdom as a
    result of time zone differences, which may delay the
    development, testing, or release of new products;n
    greater difficulty in relocating existing trained development
    personnel and recruiting local experienced personnel, and the
    costs and expenses associated with such activities; andn
    increased expenses incurred in establishing and maintaining
    office space and equipment for the development centers.    n
    greater risk of uncollectible accounts and longer collection
    cycles;n
    greater risk of unexpected changes in regulatory practices,
    tariffs, and tax laws and treaties;n
    greater risk of a failure of our foreign employees to comply
    with both U.S. and foreign laws, including antitrust
    regulations, the Foreign Corrupt Practices Act, and any trade
    regulations ensuring fair trade practices;n
    potential conflicts with our established distributors in
    countries in which we elect to establish a direct sales presence;n
    our limited experience in establishing a sales and marketing
    presence and the appropriate internal systems, processes, and
    controls in Asia-Pacific, especially China, Hong Kong, South
    Korea, and Taiwan;n
    fluctuations in exchange rates between the U.S. dollar and
    foreign currencies in markets where we do business, if we
    continue to not engage in hedging activities; andn
    general economic and political conditions in these foreign
    markets.    Although
    we believe we currently have adequate internal control over
    financial reporting, we are required to assess our internal
    control over financial reporting on an annual basis, and any
    future adverse results from such assessment could result in a
    loss of investor confidence in our financial reports and have an
    adverse effect on our stock price.
  Form 10-K
     13




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Form 8-K/A
      As a
    result of our products lengthy sales cycles, our expected
    revenues are susceptible to fluctuations, which could cause us
    to fail to meet stock analysts and investors
    expectations, resulting in a decline in the price of our common
    stock.
    n
    our customers budgetary constraints and internal
    acceptance review procedures;n
    the timing of our customers budget cycles;n
    the seasonality of technology purchases, which historically has
    resulted in stronger sales of our products in the fourth quarter
    of the year, especially when compared to lighter sales in the
    first quarter of the year;n
    our customers concerns about the introduction of our
    products or new products from our competitors; orn
    potential downturns in general economic or political conditions
    that could occur during the sales cycle.    If our
    products are unable to interoperate with hardware and software
    technologies developed and maintained by third parties that are
    not within our control, our ability to develop and sell our
    products to our customers could be adversely affected, which
    would result in harm to our business and operating
    results.
   14




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The
    loss of our key personnel, an increase in our sales force
    personnel turnover rate, or the inability to attract and retain
    additional personnel could adversely affect our ability to grow
    our company successfully and may negatively impact our results
    of operations.
          If the
    market in which we sell our products and services does not grow
    as we anticipate, we may not be able to increase our revenues at
    an acceptable rate of growth, and the price of our common stock
    could decline.
    n
    not fully value the benefits of using our products;n
    not achieve favorable results using our products;n
    experience technical difficulties in implementing our
    products; orn
    use alternative methods to solve the problems addressed by our
    products.   15




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If the
    current improvement in the U.S. and global economies does not
    result in increased sales of our products and services, our
    operating results would be harmed, and the price of our common
    stock could decline.
      We
    rely on the sale of a limited number of products, and if these
    products do not achieve broad market acceptance, our revenues
    would be adversely affected.
    We may
    not be able to successfully manage the growth of our business if
    we are unable to improve our internal systems, processes, and
    controls.
    The
    price of our common stock fluctuates as a result of factors
    other than our operating results, such as the actions of our
    competitors and securities analysts, as well as developments in
    our industry and changes in accounting rules.
    n
    the announcement of new products or product enhancements by our
    competitors;n
    quarterly variations in our competitors results of
    operations;n
    changes in earnings estimates and recommendations by securities
    analysts;n
    developments in our industry; andn
    changes in accounting rules. 16




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The
    recognition of share-based payment compensation expense for
    employee stock option and employee stock purchase plans has
    adversely impacted our results of operations.
  Share-Based Payment Share-Based Payments Summary of
    Significant Accounting Policies
  We
    rely on a number of different distribution channels to sell and
    market our products. Any conflicts that we may experience within
    these various distribution channels could result in confusion
    for our customers and a decrease in revenue and operating
    margins.
    Any
    significant defect in our products could cause us to lose
    revenue and expose us to product liability claims.
      If we
    are unable to successfully respond to technological advances and
    evolving industry standards, we could experience a reduction in
    our future product sales, which would cause our revenues to
    decline.
   17




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We
    recognize revenue from specific customers at the time we receive
    payment for our products, and if these customers do not make
    timely payment, our revenues could decrease.
    We
    have a limited operating history and a cumulative net loss,
    which makes it difficult to evaluate our operations, products,
    and prospects for the future.
    The
    conversion provisions of our Notes could dilute the ownership
    interests of stockholders, and the level of debt represented by
    such Notes could adversely affect our liquidity and could impede
    our ability to raise additional capital.
    If we
    are not able to adequately protect our proprietary rights, third
    parties could develop and market products that are equivalent to
    our own, which would harm our sales efforts.
       18




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Litigation
  We may
    face intellectual property infringement claims that could be
    costly to defend and result in our loss of significant
    rights.
    n
    we may be forced to enter into royalty or licensing agreements,
    which may not be available on terms favorable to us, or at all;n
    we may be required to indemnify our customers or obtain
    replacement products or functionality for our customers;n
    we may be forced to significantly increase our development
    efforts and resources to redesign our products as a result of
    these claims; andn
    we may be forced to discontinue the sale of some or all of our
    products.  Our
    effective tax rate is difficult to project and changes in such
    tax rate could adversely affect our operating
    results.
     19




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We may
    not successfully integrate Similaritys or Itemfields
    technologies, employees, or business operations with our own. As
    a result, we may not achieve the anticipated benefits of our
    acquisitions, which could adversely affect our operating results
    and cause the price of our common stock to
    decline.
    n
    the failure to capture the value of the businesses we acquired,
    including the loss of any key personnel, customers, and business
    relationships;n
    any inability to generate revenue from the combined products
    that offsets the associated acquisition and maintenance costs,
    including addressing issues related to the availability of
    offerings on multiple platforms;n
    the assumption of any contracts or agreements from Similarity
    and/or
    Itemfield that contain terms or conditions that are unfavorable
    to us; andn
    the potential impairment of our goodwill and a need for a
    subsequent write-off or write-down of our goodwill balance based
    upon a failure to meet our revenue goals and objectives in the
    future in relation to our company market value.    We may
    engage in future acquisitions or investments that could dilute
    our existing stockholders or cause us to incur contingent
    liabilities, debt, or significant expense.
    We
    have substantial real estate lease commitments that are
    currently subleased to third parties, and if subleases for this
    space are terminated or cancelled, our operating results and
    financial condition could be adversely affected.
  Facilities
    Restructuring Charges
 20




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Delaware
    law and our certificate of incorporation and bylaws contain
    provisions that could deter potential acquisition bids, which
    may adversely affect the market price of our common stock,
    discourage merger offers, and prevent changes in our management
    or Board of Directors.
      Business
    interruptions could adversely affect our business.
  Voice-Over-Internet
   ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS     ITEM 2.
    PROPERTIES       21




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ITEM 3.
    LEGAL
    PROCEEDINGS  In re
    Informatica Corporation Initial Public Offering Securities
    Litigation, Civ.
    No. 01-9922
    (SAS) (S.D.N.Y.), In re Initial Public
    Offering Securities Litigation, 21 MC 92 (SAS) (S.D.N.Y.) and/or and/or
      In re Initial
    Public Offering Securities Litigation
   22




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ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS    Executive
    Officers of the Registrant    Name

Age

Position(s)Sohaib Abbasi


50


Chairman of the Board, Chief
    Executive Officer and PresidentEarl Fry


48


Chief Financial Officer, Executive
    Vice President, and SecretaryPaul Hoffman


56


Executive Vice President,
    Worldwide Field OperationsGirish Pancha


42


Executive Vice President, ProductsBrian Gentile


43


Chief Marketing Officer, Executive
    Vice President of Marketing     Mr. Abbasi
  Mr. Fry
  Mr. Hoffman
 23




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Mr. Pancha
  Mr. Gentile
  PART II   ITEM 5.
    MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
    AND ISSUER PURCHASES OF EQUITY SECURITIES  Price
    Range of Common Stock
    High


LowYear ended December 31,
    2006:Fourth quarter

$
14.29


$
11.37Third quarter

$
16.24


$
11.60Second quarter

$
17.00


$
12.40First quarter

$
17.07


$
11.98Year ended December 31,
    2005:Fourth quarter

$
12.63


$
10.20Third quarter

$
12.54


$
8.35Second quarter

$
9.02


$
7.23First quarter

$
8.50


$
6.99   Holders
    of Record
   24




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Dividends
    Purchases
    of Equity Securities by the Issuer and Affiliated
    Purchasers
      (2)ApproximateDollar Value ofTotal Number of


SharesShares Purchased


That May Yet(1)





as Part of Publicly


Be PurchasedTotal Number of


Average Price


Announced Plans


Under the PlansPeriod

Shares Purchased


Paid per Share


or Programs


or Programs(in thousands)April 24 - April 30


145,000


$
15.76



145,000


$
27,714May 1 - May 31


660,000


$
14.12



660,000


$
18,398June 1 - June 30


-


$
-



-


$
18,398July 1 - July 31


110,000


$
13.22



110,000


$
16,944August 1 - August 31


283,000


$
13.85



283,000


$
13,025September 1 -
    September 30


-


$
-



-


$
13,025October 1 - October 31


295,000


$
12.53



295,000


$
9,328November 1 - November 30


640,000


$
12.36



640,000


$
1,416December 1 - December 31


-


$
-



-


$
1,416Total


2,133,000


$
13.40



2,133,000   (1)
    
    All shares repurchased in open-market transactions under the
    repurchase program.(2)
    
    We announced the repurchase program in April 2006. It authorizes
    the repurchase of up to $30 million of our common stock at
    any time until April 2007. 25




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ITEM 6.
    SELECTED
    FINANCIAL DATA   26




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##### Table of Contents



Years Ended December 31,2006


2005


2004


2003


2002(In thousands, except per share data)Selected Consolidated Statements
    of Operations Data:Revenues:License

$
146,092


$
120,182


$
97,941


$
94,590


$
99,943Service


178,506



147,249



121,740



110,943



95,498Total revenues


324,598



267,431



219,681



205,533



195,441Cost of revenues:License


6,978



4,465



3,778



3,139



6,185Service (1)


58,402



46,801



40,346



38,856



39,250Amortization of acquired technology


2,118



922



2,322



1,031



1,040Total cost of revenues


67,498



52,188



46,446



43,026



46,475Gross profit


257,100



215,243



173,235



162,507



148,966Operating expenses:Research and development (1)


54,997



42,585



51,322



47,730



45,836Sales and marketing (1)


138,851



118,770



94,900



86,810



86,770General and administrative (1)


28,187



20,583



20,755



20,921



20,286Amortization of intangible assets


653



188



197



147



100Facilities restructuring charges


3,212



3,683



112,636



-



17,030Purchased in-process research and
    development


1,340



-



-



4,524



-Total operating expenses


227,240



185,809



279,810



160,132



170,022Income (loss) from operations


29,860



29,434



(106,575)



2,375



(21,056)Interest income and other, net


11,823



6,544



3,391



7,059



6,363Income (loss) before income taxes


41,683



35,978



(103,184)



9,434



(14,693)Income tax provision


5,477



2,174



1,220



2,124



921Net income (loss) (2)

$
36,206


$
33,804


$
(104,404)


$
7,310


$
(15,614)Basic net income (loss) per common
    share (2)

$
0.42


$
0.39


$
(1.22)


$
0.09


$
(0.20)Diluted net income (loss) per
    common share (2)

$
0.39


$
0.37


$
(1.22)


$
0.09


$
(0.20)Shares used in computing basic net
    income (loss) per common share


86,420



87,242



85,812



82,049



79,753Shares used in computing diluted
    net income (loss) per common share


92,942



92,083



85,812



85,200



79,753   Years Ended December 31,2006


2005


2004


2003


2002(In thousands)Selected Consolidated Balance
    Sheet Data:Cash and cash equivalents

$
120,491


$
76,545


$
88,941


$
82,903


$
105,590Short-term investments


280,149



185,649



152,160



140,890



130,285Restricted cash


12,016



12,166



12,166



12,166



12,166Working capital (3)


309,949



187,759



173,816



167,011



180,750Total assets


696,765



441,022



409,768



402,808



365,194Long-term obligations, less current
    portion


-



-



-



-



-Total stockholders equity


227,163



222,730



195,722



289,599



252,403   (1)
    
    Amortization of stock-based
    compensation has been reclassified for periods prior to
    December 31, 2004 to cost of service revenues, research and
    development, sales and marketing, and general and administrative
    expense.(2)
    
    In fiscal 2006, net income and net
    income per share include the impact of SFAS 123(R)
    stock-based compensation ($4.1 million and
    $14.1 million for three and twelve months ended
    December 31, 2006, respectively), neither of which were
    present in prior years. See Note 2. Summary of Significant
    Accounting Polices.(3)
    
    A portion of deferred revenues has
    been reclassified to long-term for periods prior to
    December 31, 2004. 27




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ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
    OF OPERATIONS  Form 10-K
    Overview
             28




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
    Competition: Inherent in our industry are risks
    arising from competition with existing software solutions,
    technological advances from other vendors, and the perception of
    cost-savings by solving data integration challenges through
    customer hand-coded development. Our prospective customers may
    view these alternative solutions as more attractive than our
    offerings. Additionally, the consolidation activity in our
    industry (including Business Objects acquisition of
    FirstLogic, and Oracles acquisition of Sunopsis) could
    pose challenges as competitors could potentially offer our
    prospective customers a broader suite of software products or
    solutions.
    New Product Introductions: To address the
    expanding data integration and data integrity needs of our
    customers and prospective customers, we continue to introduce
    new products and technology enhancements on a regular basis. For
    example, in May 2006, we delivered the generally available
    release of PowerCenter 8, which included new products,
    Informatica Data Quality and Informatica Data Explorer that
    deliver advanced data quality capabilities. In September 2006,
    we delivered general availability of the PowerCenter Connect for
    salesforce.com to enable joint customers to integrate data
    managed by salesforce.com. Also, in November 2006, we announced
    general availability of new versions of Informatica Data Quality
    and Informatica Data Explorer. New product introductions
    and/or
    enhancements have inherent risks including, but not limited to,
    product availability, product quality and interoperability, and
    customer adoption or the delay in customer purchases. Given the
    risks and new nature of the products, we cannot predict their
    impact on overall sales and revenues.
    Quarterly and Seasonal Fluctuations: Historically,
    purchasing patterns in the software industry have followed
    quarterly and seasonal trends and they are likely to do so in
    the future. We typically recognize a substantial portion of our
    new license orders in the last month of each quarter and
    sometimes in the last few weeks of each quarter although such
    fluctuations are mitigated by backlog orders entering into a
    quarter. Seasonally, in recent years, the fourth quarter has
    generated the highest level of license revenue and order
    backlog, and we have generally had lower levels of demand for
    our software products and services in the first and third
    quarters. Additionally, our consulting and education services
    have sometimes been negatively impacted in the fourth quarter
    and first quarter due to the holiday season and internal
    meetings, which result in fewer billable hours for our
    consultants and fewer education classes.    We rely on our relationships with
    our strategic partners. If we do not maintain and strengthen
    these relationships, our ability to generate revenue and control
    expenses could be adversely affected, which could cause a
    decline in the price of our common stock
   29




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##### Table of Contents



Critical
    Accounting Policies and Estimates
  Summary of Significant Accounting Policies
  Revenue
    Recognition    97-2 Software Revenue Recognition, together with other
    authoritative literature. For other authoritative literature,
    see the subsection Revenue Recognition Summary of Significant Accounting Policies
 30




---



##### Table of Contents



and/or
    time-and-materials
  Facilities
    Restructuring Charges      Facilities Restructuring Charges
 31




---



##### Table of Contents



Accounting
    for Income Taxes
  Accounting for
    Income Taxes. Accounting for
    Contingencies.
    Accounting for Uncertainty in
    Income Taxes Accounting for Income Taxes
  Accounting
    for Impairment of Goodwill
  Goodwill and Other Intangible
    Assets
   32




---



##### Table of Contents



Acquisitions
      Share-Based
    Payments
     33




---



##### Table of Contents



Results
    of Operations
    Years Ended December 31,2006


2005


2004Revenues:License


45
%


45
%


45
%Service


55



55



55Total revenues


100



100



100Cost of revenues:License


2



2



2Service


18



18



18Amortization of acquired technology


1



-



1Total cost of revenues


21



20



21Gross margin


79



80



79Operating expenses:Sales and marketing


43



44



43Research and development


17



16



23General and administrative


9



8



10Amortization of intangible assets


-



-



-Purchased in-process research and
    development


-



-



-Restructuring charges


1



1



52Total operating expenses


70



69



128Income (loss) from operations


9



11



(49
)Interest income and other, net


4



3



2Income (loss) before income taxes


13



14



(47
)Income taxes provision


2



1



1Net income (loss)


11
%


13
%


(48
)%     Revenues
      Percentage Change2005


2004Years Ended December 31,


to


to2006


2005


2004


2006


2005(In thousands, except percentages)License

$
146,092



120,182



97,941



22%



23%Service revenues:Maintenance


124,955



103,573



87,470



21%



18%Consulting and education


53,551



43,676



34,270



23%



27%Total service revenues


178,506



147,249



121,740



21%



21%Total revenues

$
324,598



267,431



219,681



21%



22%  34




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##### Table of Contents



Service
    Revenues
  Maintenance
    Revenues
    Consulting
    and Education Services Revenues
    International
    Revenues
     35




---



##### Table of Contents



Cost of
    Revenues
  Years Ended December 31,


Percentage Change2006


2005


2004


2005 to 2006


2004 to 2005(In thousands, except percentages)Cost of license revenues

$
6,978


$
4,465


$
3,778



56%



18 %Cost of service revenues


58,402



46,801



40,346



25%



16 %Amortization of acquired technology


2,118



922



2,322



130%



(60)%Total cost of revenues

$
67,498


$
52,188


$
46,446



29%



12 %Cost of license revenues, as a
    percentage of license revenues


5%



4%



4%



1%



- %Cost of service revenues, as a
    percentage of service revenues


33%



32%



33%



1%



(1)%   Cost
    of License Revenues
    Cost
    of Service Revenues
    Amortization
    of Acquired Technology
   36




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##### Table of Contents



Operating
    Expenses
  Research
    and Development
  Years Ended December 31,

Percentage Change2006

2005

2004

2005 to 2006

2004 to 2005(In thousands, except percentages)Research and development

$
54,997


$
42,585


$
51,322



29%



(17)%     Sales
    and Marketing
  Years Ended December 31,

Percentage Change2006

2005

2004

2005 to 2006

2004 to 2005(In thousands, except percentages)Sales and marketing

$
138,851


$
118,770


$
94,900



17%



25%     General
    and Administrative
  Years Ended December 31,

Percentage Change2006

2005

2004

2005 to 2006

2004 to 2005(In thousands, except percentages)General and administrative

$
28,187


$
20,583


$
20,755



37%



(1)%    37




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##### Table of Contents



Purchased
    In-Process Research and Development (IPR&D)
  Years Ended December 31,2006

2005

2004(In thousands, except percentages)Purchased in-process research and
    development

$
1,340


$
-


$
-
       Facilities
    Restructuring Charges
  Years Ended December 31,


Percentage Change2006


2005


2004


2005 to 2006


2004 to 2005(In thousands, except percentages)Facilities restructuring charges

$
3,212


$
3,683


$
112,636



(13)%



(97)%         2004 Restructuring Plan.
  2001 Restructuring Plan.
 38




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##### Table of Contents



Interest
    Income and Other, Net
  Years Ended December 31,


Percentage Change2006


2005


2004


2005 to 2006


2004 to 2005(In thousands, except percentages)Interest income

$
18,188


$
7,256


$
3,503



151
%


107
%Interest expense


(5,782
)


-



(54
)


*
%


(100)
%Other expense, net


(583
)


(712
)


(58
)


(18)
%


1,128
%$
11,823


$
6,544


$
3,391



81
%


93
%       Income
    Tax Provision
  Years Ended December 31,2006


2005


2004


2005 to 2006


2004 to 2005(In thousands, except percentages)Income tax provision

$
5,477


$
2,174


$
1,220



152
%


78
%      39




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##### Table of Contents



Liquidity
    and Capital Resources
      Operating Activities:
      Investing Activities:
 40




---



##### Table of Contents



Financing Activities:
       41




---



##### Table of Contents



Contractual
    Obligations and Operating Leases
    Payment Due by Period2008 and


2010 and


2012 andTotal


2007


2009


2011


BeyondOperating lease obligations:Operating lease payments

$
124,268


$
21,985


$
36,166


$
35,856


$
30,261Future sublease income


(13,305
)


(3,075
)


(4,344
)


(2,217
)


(3,669
)Net operating lease obligations


110,963



18,910



31,822



33,639



26,592Debt obligations:Principal payments


230,000



-



-



-



230,000Interest payments


134,550



6,900



13,800



13,800



100,050Other obligations *


1,200



600



600



-



-$
476,713


$
26,410


$
46,222


$
47,439


$
356,642   *
    
    Other purchase obligations and commitments include minimum
    royalty payments under license agreements and do not include
    purchase obligations discussed below.    Contractual
    Obligations
    agreed-upon
  Operating
    Leases
       42




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##### Table of Contents



Other
    Uses of Cash
    Letter
    of Credit
    Off-Balance
    Sheet Arrangements
    Recent
    Accounting Pronouncements
  For recent accounting pronouncements, see
    Note 2.
   ITEM 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK   43




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##### Table of Contents



Interest
    Rate Risk
      Years EndedDecember 31,2006


2005Cash and short-term investments

$
351,373


$
221,967Average rate of return


4.9%



3.0%     Foreign
    Currency Risk
         ITEM 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA  Form 10-K.
 44




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##### Table of Contents



REPORT OF
    MANAGEMENT ON INTERNAL CONTROL OVER FINANCIAL
    REPORTING
  Rules 13a-15(f) 15d-15(f)
  
    pertain to the maintenance of records that, in reasonable
    detail, accurately and fairly reflect the transactions and
    dispositions of the assets of the company;
    provide reasonable assurance that transactions are recorded as
    necessary to permit preparation of financial statements in
    accordance with generally accepted accounting principles, and
    that receipts and expenditures of the company are being made
    only in accordance with authorizations of management and
    directors of the company; and
    provide reasonable assurance regarding prevention or timely
    detection of unauthorized acquisition, use or disposition of the
    companys assets that could have a material effect on the
    financial statements.          
    Chief Executive Officer
   
   Chief Financial Officer
  45




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##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
                
  
 46




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
              
  
 47




---



##### Table of Contents



INFORMATICA
    CORPORATION
  CONSOLIDATED
    BALANCE SHEETS
 (In
    thousands, except par value)
  December 31,2006


2005AssetsCurrent assets:Cash and cash equivalents

$
120,491


$
76,545Short-term investments


280,149



185,649Accounts receivable, net of
    allowances of $1,666 in 2006 and $1,094 in 2005


65,407



50,533Prepaid expenses and other current
    assets


10,424



9,342Total current assets


476,471



322,069Restricted cash


12,016



12,166Property and equipment, net


14,368



21,026Goodwill


170,683



81,066Other intangible assets, net


16,634



4,163Other assets


6,593



532Total assets

$
696,765


$
441,022Liabilities and
    Stockholders EquityCurrent liabilities:Accounts payable

$
3,641


$
3,404Accrued liabilities


26,505



17,424Accrued compensation and related
    expenses


25,793



20,450Income taxes payable


6,461



4,566Accrued facilities restructuring
    charges


18,758



18,718Deferred revenues


85,364



69,748Total current liabilities


166,522



134,310Convertible senior notes


230,000



-Accrued facilities restructuring
    charges, less current portion


65,052



75,815Deferred revenues, less current
    portion


7,035



8,167Deferred tax liability, non-current


993



-Total liabilities


469,602



218,292Commitment and contingenciesStockholders equity:Common stock, $0.001 par
    value; 200,000 shares authorized; 85,933 shares and
    87,341 shares issued and outstanding at December 31,
    2006 and 2005, respectively


86



87Additional paid-in capital


350,359



384,653Deferred stock-based compensation


-



(187
)Accumulated other comprehensive
    income (loss)


1,796



(539
)Accumulated deficit


(125,078
)


(161,284
)Total stockholders equity


227,163



222,730Total liabilities and
    stockholders equity

$
696,765


$
441,022    48




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##### Table of Contents



INFORMATICA
    CORPORATION
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
 (In
    thousands, except per share data)
  Years Ended December 31,2006


2005


2004Revenues:License

$
146,092


$
120,182


$
97,941Service


178,506



147,249



121,740Total revenues


324,598



267,431



219,681Cost of revenues:License


6,978



4,465



3,778Service


58,402



46,801



40,346Amortization of acquired technology


2,118



922



2,322Total cost of revenues


67,498



52,188



46,446Gross profit


257,100



215,243



173,235Operating expenses:Research and development


54,997



42,585



51,322Sales and marketing


138,851



118,770



94,900General and administrative


28,187



20,583



20,755Amortization of intangible assets


653



188



197Facilities restructuring charges


3,212



3,683



112,636Purchased in-process research and
    development


1,340



-



-Total operating expenses


227,240



185,809



279,810Income (loss) from operations


29,860



29,434



(106,575
)Interest income


18,188



7,256



3,503Interest expense


(5,782
)


-



(54
)Other expense, net


(583
)


(712
)


(58
)Income (loss) before income taxes


41,683



35,978



(103,184
)Income tax provision


5,477



2,174



1,220Net income (loss)

$
36,206


$
33,804


$
(104,404
)Basic net income (loss) per common
    share

$
0.42


$
0.39


$
(1.22
)Diluted net income (loss) per
    common share

$
0.39


$
0.37


$
(1.22
)Shares used in computing basic net
    income (loss) per common share


86,420



87,242



85,812Shares used in computing diluted
    net income (loss) per common share


92,942



92,083



85,812    49




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##### Table of Contents



INFORMATICA
    CORPORATION
  CONSOLIDATED
    STATEMENTS OF STOCKHOLDERS EQUITY
 (In
    thousands)
  AccumulatedAdditional


Deferred


Other





TotalCommon Stock


Paid-in


Stock-based


Comprehensive


Accumulated


StockholdersShares


Amount


Capital


Compensation


Income (Loss)


Deficit


EquityBalances, December 31,
    2003


84,629


$
85


$
382,470


$
(4,058
)

$
1,786


$
(90,684
)

$
289,599Components of comprehensive loss:Net loss


-



-



-



-



-



(104,404
)


(104,404
)Foreign currency translation
    adjustment


-



-



-



-



786



-



786Unrealized loss on investments


-



-



-



-



(797
)


-



(797
)Comprehensive loss


























(104,415
)Common stock options exercised


2,392



2



8,848



-



-



-



8,850Common stock issued under employee
    stock purchase plan


805



1



4,447



-



-



-



4,448Compensation expense related to
    stock options


-



-



1,341



-



-



-



1,341Repurchase and retirement of common
    stock


(1,055
)


(1
)


(6,117
)


-



-



-



(6,118
)Deferred stock-based compensation
    adjustments and other


-



-



(1,041
)


1,041



-



-



-Amortization of stock-based
    compensation


-



-



-



2,017



-



-



2,017Balances, December 31,
    2004


86,771



87



389,948



(1,000
)


1,775



(195,088
)


195,722Components of comprehensive income:Net income


-



-



-



-



-



33,804



33,804Foreign currency translation
    adjustment


-



-



-



-



(2,257
)


-



(2,257
)Unrealized loss on investments


-



-



-



-



(57
)


-



(57
)Comprehensive income


























31,490Common stock options exercised


2,504



2



16,736



-



-



-



16,738Common stock issued under employee
    stock purchase plan


909



1



4,764



-



-



-



4,765Repurchase and retirement of common
    stock


(2,843
)


(3
)


(26,705
)


-



-



-



(26,708
)Deferred stock-based compensation
    adjustments and other


-



-



(90
)


90



-



-



-Amortization of stock-based
    compensation


-



-



-



723



-



-



723Balances, December 31,
    2005


87,341



87



384,653



(187
)


(539
)


(161,284
)


222,730Components of comprehensive income:Net income


-



-



-



-



-



36,206



36,206Foreign currency translation
    adjustment


-



-



-



-



1,776



-



1,776Unrealized gain on investments


-



-



-



-



559



-



559Comprehensive income


























38,541Common stock options exercised


2,709



3



17,019



-



-



-



17,022Common stock issued under employee
    stock purchase plan


1,126



1



6,814



-



-



-



6,815Issuance of common stock and
    assumption of stock options in conjunction with acquisitions


122



-



6,458



-



-



-



6,458Share-based payments


-



-



14,138



-



-



-



14,138Repurchase and retirement of common
    stock


(5,365
)


(5
)


(78,536
)


-



-



-



(78,541
)Deferred stock-based compensation
    adjustments and other


-



-



(187
)


187



-



-



-Balances, December 31,
    2006


85,933


$
86


$
350,359


$
-


$
1,796


$
(125,078
)

$
227,163    50




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##### Table of Contents



INFORMATICA
    CORPORATION
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
 (In
    thousands)
  Years Ended December 31,2006


2005


2004Operating activities:Net income (loss)

$
36,206


$
33,804


$
(104,404
)Adjustments to reconcile net income
    (loss) to net cash provided by operating activities:Depreciation and amortization


10,104



9,198



9,261Share-based payments and
    amortization of stock-based compensation


14,138



723



3,358Amortization of intangible assets
    and acquired technology


3,605



1,144



2,519Impairment of property and equipment


2,668



-



-Allowance (recovery) for doubtful
    accounts and sales returns allowances


(32
)


350



5Purchased in-process research and
    development


1,340



-



-Non-cash facilities restructuring
    charges


3,212



3,683



21,556Investment impairment charges


-



-



500Changes in operating assets and
    liabilities:Accounts receivable


(11,434
)


(8,348
)


(8,165
)Prepaid expenses and other assets


(172
)


(3,596
)


(2,876
)Accounts payable and accrued
    liabilities


997



(2,571
)


(6,784
)Accrued compensation and related
    expenses


4,328



4,769



1,430Income taxes payable


1,624



1,606



917Deferred tax liability


993



-



-Accrued facilities restructuring
    charges


(13,772
)


(18,299
)


94,084Deferred revenues


13,098



15,472



11,131Net cash provided by operating
    activities


66,903



37,935



22,532Investing activities:Purchases of property and equipment


(3,767
)


(9,913
)


(12,515
)Purchases of investments


(462,367
)


(227,132
)


(217,849
)Maturities of investments


249,624



104,586



75,930Sales of investments


118,802



89,000



129,852Business acquisitions, net of cash
    acquired


(95,763
)


-



-Net cash used in investing
    activities


(193,471
)


(43,459
)


(24,582
)Financing activities:Proceeds from issuance of common
    stock


23,837



21,503



13,298Repurchases and retirement of
    common stock


(78,541
)


(26,500
)


(6,118
)Issuance of convertible senior notes


230,000



-



-Payment of issuance costs on
    convertible senior notes


(6,242
)


-



-Net cash provided by (used in)
    financing activities


169,054



(4,997
)


7,180Effect of foreign exchange rate
    changes on cash and cash equivalents


1,460



(1,875
)


908Net increase (decrease) in cash and
    cash equivalents


43,946



(12,396
)


6,038Cash and cash equivalents at
    beginning of the year


76,545



88,941



82,903Cash and cash equivalents at end of
    the year

$
120,491


$
76,545


$
88,941Supplemental
    disclosures:Interest paid

$
3,488


$
122


$
-Income taxes paid

$
2,905


$
1,014


$
304Supplemental disclosures of
    non-cash investing and financing activities:Deferred stock-based compensation
    related to options granted and other

$
-


$
90


$
(1,041
)Common stock issued for acquisitions

$
1,583


$
-


$
-Unrealized gain (loss) on
    investments

$
559


$
(57
)

$
(797
)    51




---



##### Table of Contents



INFORMATICA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  1.
    Organization
    and Business    2.
    Summary
    of Significant Accounting Policies    Reclassifications
    Use of
    Estimates
    Cash,
    Cash Equivalents, and Restricted Cash
    Allowance
    for Doubtful Accounts
    Allowance
    for Sales Returns
   52




---



##### Table of Contents



INFORMATICA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Investments
  available-for-sale available-for-sale available-for-sale
  Property
    and Equipment
    Software
    Development Costs
  Accounting for the Costs of
    Computer Software to Be Sold, Leased, or Otherwise Marketed
  No. 98-1 ,
    Accounting for Costs of Computer Software Developed or Obtained
    for Internal Use,
  Goodwill
  Goodwill and Other Intangible Assets,
 53




---



##### Table of Contents



INFORMATICA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Impairment
    of Long-Lived Assets
  Accounting for the
    Impairment or Disposal of Long-Lived Assets,
  Fair
    Value of Financial Instruments, Concentrations of Credit Risk,
    and Credit Evaluations
        Revenue
    Recognition
  SOP 97-2, Software Revenue Recognition, SOP 98-9, Modification of
    SOP 97-2,
    Software Revenue Recognition, With Respect to Certain
    Transactions, SOP 81-1 ,
    Accounting for Performance of Construction-type and Certain
    Production-type Contracts, , Revenue Recognition in Financial Statements, , Revenue Recognition,
  SOP 97-2,
  Persuasive evidence of an arrangement exists.
  Delivery has occurred.
 54




---



##### Table of Contents



INFORMATICA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    The fee is fixed or determinable.
  Collection is probable.
  and/or
  and/or
    time-and-materials
    Facilities
    Restructuring Charges
  Accounting
    for Costs Associated with Exit or Disposal Activities. No. 88-10, Costs Associated with Lease Modification or Termination. No. 88-10 Facilities Restructuring Charges.
   55




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##### Table of Contents



INFORMATICA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     and/or No. 88-10. No. 88-10, and/or and/or
  Shipping
    and Handling Costs
  cost-of-license
  Advertising
    Expense
    Net
    Income (Loss) per Common Share
  Earnings per
    Share,
    Years Ended December 31,2006


2005


2004Net income (loss)

$
36,206


$
33,804


$
(104,404
)Weighted-average shares outstanding


86,420



87,266



85,919Weighted-average unvested common
    shares subject to repurchase


-



(24
)


(107
)Shares used in computing basic net
    income (loss) per common share


86,420



87,242



85,812Effect of dilutive securities
    (stock options)


6,522



4,841



-Shares used in computing diluted
    net income (loss) per common share


92,942



92,083



85,812Basic net income (loss) per common
    share

$
0.42


$
0.39


$
(1.22
)Diluted net income (loss) per
    common share

$
0.39


$
0.37


$
(1.22
)   Earnings per Share, 12-months
 56




---



##### Table of Contents



INFORMATICA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
       Income
    Taxes
  Accounting for Income Taxes, Accounting for
    Contingencies.
  Share-Based
    Payments
  Changes
    in Accounting Principle
  Share-Based Payment, Accounting for
    Stock-Based Compensation. Accounting for Stock Issued to
    Employees Statement of
    Cash Flows.
  Accounting for Stock
    Issued to Employees, Accounting for Stock-Based
    Compensation Accounting for
    Stock-Based Compensation  Transition and
    Disclosure. Accounting for Stock Appreciation Rights and
    Other Variable Stock Options or Award Plans
   57




---



##### Table of Contents



INFORMATICA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Summary
    of Assumptions
      Years Ended December 31,2006


2005


2004Option grants:Expected volatility


43-52
%


57
%


80
%Weighted-average volatility


48
%


57
%


80
%Expected life (in years)


3.9



3.3



3.0Expected dividends


-



-



-Risk-free interest rate


4.8
%


3.9
%


3.0
%ESPP:Expected volatility


40
%


44
%


60
%Weighted-average volatility


40
%


44
%


60
%Expected dividends


-



-



-Expected term of ESPP (in years)


1.25



1.25



1.25Risk-free interest
    rate  ESPP


5.1
%


3.5
%


1.8
%  58




---



##### Table of Contents



INFORMATICA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Stock
    Option Plan Activity
    WeightedWeighted-


AverageAverage


Remaining


AggregateNumber of


Exercise Price


Contractual


IntrinsicShares


per Share


Term (years)


ValueOutstanding at December 31,
    2003


15,585


$
7.26Granted


7,901



6.97Exercised


(2,392
)


3.70Forefeited or expired


(3,209
)


8.06Outstanding at December 31,
    2004


17,885



7.47



6.34


$
24,064Granted


3,735



8.99Exercised


(2,504
)


6.68Forefeited or expired


(2,003
)


10.51Outstanding at December 31,
    2005


17,113



7.56



5.63


$
78,980Granted


3,866



12.79Exercised


(2,709
)


6.28Forefeited or expired


(987
)


11.29Outstanding at December 31,
    2006


17,283


$
8.72



5.11


$
69,835Exercisable at December 31,
    2006


10,215


$
7.48



4.53


$
50,765    59




---



##### Table of Contents



INFORMATICA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Options Outstanding


Options ExercisableWeighted-Average


Weighted





WeightedNumber


Remaining


Average


Number


AverageRange of

of


Contractual Life


Exercise Price


of


Exercise PriceExercise Prices

Options


(Years)


per Share


Options


per Share$ 0.07 to $ 4.05



937



3.95



$ 2.08



849



$ 2.14$ 4.51 to $ 5.69



2,789



7.27



$ 5.63



1,713



$ 5.61$ 5.72 to $ 7.26



2,881



4.09



$ 6.89



2,020



$ 6.88$ 7.30 to $ 7.86



2,232



4.79



$ 7.63



1,148



$ 7.62$ 7.88 to $ 7.90



2,538



3.39



$ 7.90



2,496



$ 7.90$ 7.91 to $12.00



2,499



5.12



$10.01



1,360



$ 9.19$12.11 to $48.63



3,407



6.03



$14.98



629



$16.0317,283



5.11



$ 8.72



10,215



$ 7.48   Pro
    Forma Disclosure for Years Ended December 31, 2005 and
    2004
    Years Ended December 31,2005


2004(In thousands,except per share data)Net income (loss) as reported in
    prior year (1)

$
33,804


$
(104,404)Add: Share-based employee
    compensation expense included in reported net income as
    reported, net of related tax effects (2)


723



3,358Deduce: Total share-based employee
    compensation expense using the fair value method for all awards,
    net of related tax effects (2) and (3)


(16,010)



(18,897)Net income (loss), pro forma

$
18,517


$
(119,943)Basic net income (loss) per common
    share:As reported in prior year (1)

$
0.39


$
(1.22)Pro forma (4)

$
0.21


$
(1.40)Diluted net income (loss) per
    common share:As reported in prior year (1)

$
0.37


$
(1.22)Pro forma (4)

$
0.20


$
(1.40)   (1)
    
    Net income (loss) and net income
    (loss) per share as reported for periods prior to 2006 did not
    include share-based compensation expense for stock options and
    our Employee Stock Purchase Plan because we did not adopt the
    recognition provisions of SFAS No. 123.(2)
    
    Tax effects on share-based
    compensation have been fully reserved by way of a valuation
    allowance.(3)
    
    Share-based compensation expense
    for periods prior to 2006 is calculated based on the pro forma
    application of SFAS No. 123.(4)
    
    Net income and net income per share
    including share-based employee compensation for periods prior to
    2006 are based on the pro forma application of
    SFAS No. 123. 60




---



##### Table of Contents



INFORMATICA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    No. FAS 123(R)-3, Transition Election Related to Accounting for Tax Effects of
    Share-Based Payment Awards (FSP 123R-3). FSP 123R-3
  Summary
    of Plans
  1999
    Stock Incentive Plan
  1-year 7-year
  1999
    Non-Employee Director Stock Incentive Plan
    2000
    Employee Stock Incentive Plan
   61




---



##### Table of Contents



INFORMATICA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Assumed
    Option Plans
    Employee
    Stock Purchase Plan
    , 6-month 24-month
  Disclosures
    Pertaining to All Share-Based Payment Plans
    Reporting
    Segments
  Disclosures About Segments of an
    Enterprise and Related Information
   62




---



##### Table of Contents



INFORMATICA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Foreign
    Currency Translation
    Recent
    Accounting Pronouncements
  Transition Election Related to Accounting for the Tax Effects
    of Share-Based Payment Awards
  Accounting Changes and Error Corrections Accounting Changes Reporting Accounting Changes in Interim Financial
    Statements
  Accounting for Certain Hybrid Financial Instruments Accounting for Derivative Instruments
    and Hedging Activities Accounting for Transfers and Servicing of Financial Assets
    and Extinguishments of Liabilities.
  No. 06-3, How Taxes Collected from Customers and Remitted to
    Governmental Authorities Should Be Presented in the Income
    Statement (That Is, Gross versus Net Presentation) No. 06-3). No. 06-3 No. 06-3
 63




---



##### Table of Contents



INFORMATICA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Accounting for Uncertainty in Income Taxes  an
    Interpretation of FASB Statement 109
  Fair Value Measurements
    3.
    Acquisitions  Itemfield
      Cash paid or committed to pay

$
52,094Transaction costs


792Fair value of options assumed


902Total purchase price

$
53,788  64




---



##### Table of Contents



INFORMATICA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Developed technology

$
6,700Customer relationships


1,400Covenants not to compete


2,000Trade names


700Goodwill


43,202Assumed liabilities, net of assets


(214
)Total purchase price

$
53,788   , Business Combinations, Applicability of FASB Statement No. 2 to
    Business Combinations Accounted for by the Purchase Method
          Similarity
   65




---



##### Table of Contents



INFORMATICA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Cash paid

$
48,329Common stock issued


1,583Fair value of options assumed


3,973Total consideration paid to
    Similarity


53,885Transaction costs


2,266Total purchase price

$
56,151     Net tangible assets acquired

$
1,456Developed technology


5,050Customer relationships


1,830Purchased in-process research and
    development


1,340Goodwill


46,475Total purchase price

$
56,151   , Business Combinations, Applicability of FASB Statement No. 2 to
    Business Combinations Accounted for by the Purchase Method
     66




---



##### Table of Contents



INFORMATICA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Years Ended December 31,2006


2005Pro forma adjusted total revenue

$
330,385


$
277,069Pro forma adjusted net income

$
24,868


$
18,520Pro forma adjusted net income per
    share  basic

$
0.29


$
0.21Pro forma adjusted net income per
    share  diluted

$
0.27


$
0.20Pro forma weighted-average basic
    shares


86,636



87,458Pro forma weighted-average diluted
    shares


93,234



92,375   4.
    Cash,
    Cash Equivalents and Short-Term Investments  available-for-sale available-for-sale
 67




---



##### Table of Contents



INFORMATICA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      December 31, 2006Gross


GrossUnrealized


Unrealized


EstimatedCost


Gains


Losses


Fair ValueCash

$
49,267


$
-


$
-


$
49,267Cash equivalents:Money market funds


14,448



-



-



14,448Commercial paper


37,639



-



(8
)


37,631U.S. government notes and
    bonds


19,138



7



-



19,145Total cash equivalents


71,225



7



(8
)


71,224Total cash and cash equivalents


120,492



7



(8
)


120,491Short-term investments:Money market funds


449



-



-



449Commercial paper


14,575



13



(13
)


14,575Certificates of deposit


750



-



-



750Corporate notes and bonds


29,984



5



(22
)


29,967U.S. government notes and
    bonds


169,482



41



(165
)


169,358Auction rate securities


65,050



-



-



65,050Total short-term investments


280,290



59



(200
)


280,149Total cash, cash equivalents, and
    short-term investments

$
400,782


$
66


$
(208
)

$
400,640   68




---



##### Table of Contents



INFORMATICA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   December 31, 2005Gross


GrossUnrealized


Unrealized


EstimatedCost


Gains


Losses


Fair ValueCash

$
40,227


$
-


$
-


$
40,227Cash equivalents:Money market funds


1,261



-



-



1,261Commercial paper


20,996



-



(3
)


20,993U.S. government notes and
    bonds


14,063



2



(1
)


14,064Total cash equivalents


36,320



2



(4
)


36,318Total cash and cash equivalents


76,547



2



(4
)


76,545Short-term investments:Money market funds


451



-



-



451Commercial paper


997



-



-



997Certificates of deposit


2,000



-



-



2,000Corporate notes and bonds


27,455



-



(184
)


27,271Municipal securities


4,198



-



(9
)


4,189U.S. government notes and
    bonds


109,084



-



(507
)


108,577Auction rate securities


41,850



-



-



41,850French government bonds


314



-



-



314Total short-term investments


186,349



-



(700
)


185,649Total cash, cash equivalents, and
    short-term investments

$
262,896


$
2


$
(704
)

$
262,194   No. 03-1, available-for-sale
  Less Than 12 months


More Than 12 months


TotalGross





Gross





GrossUnrealized





Unrealized





UnrealizedFair Value


Losses


Fair Value


Losses


Fair Value


LossesCorporate notes and bonds

$
19,167


$
(13
)

$
4,748


$
(9
)

$
23,915


$
(22
)Commercial paper


28,993



(21
)


-



-



28,993



(21
)U.S. government notes and bonds


80,127



(112
)


19,446



(53
)


99,573



(165
)$
128,287


$
(146
)

$
24,194


$
(62
)

$
152,481


$
(208
)    69




---



##### Table of Contents



INFORMATICA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Cost


Fair ValueDue within one year

$
232,509


$
232,417Due one year to two years


53,956



53,906Due after two years


65,050



65,050$
351,515


$
351,373     5.
    Property
    and Equipment    December 31,2006


2005Computer and office equipment

$
34,532


$
31,184Furniture and fixtures


3,379



3,130Leasehold improvements


15,554



14,653Capital
    work-in-progress


331



1,17053,796



50,137Less: Accumulated depreciation and
    amortization


(39,428
)


(29,111
)$
14,368


$
21,026    70




---



##### Table of Contents



INFORMATICA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    6.
    Goodwill
    and Intangible Assets    2006


2005Gross


Accumulated





GrossCarrying


Amortization


Net


Carrying


Accumulated


NetAmount


and Impairment


Amount


Amount


Amortization


AmountDeveloped and core technology

$
18,135


$
(7,297
)

$
10,838


$
6,357


$
(5,178
)

$
1,179Purchased technology


2,500



(2,500
)


-



2,500



(35
)


2,465Customer relationships


4,175



(1,057
)


3,118



945



(426
)


519Other:Trade names


700



(8
)


692



-



-



-Covenant not to compete


2,000



(14
)


1,986



-



-



-$
27,510


$
(10,876
)

$
16,634


$
9,802


$
(5,639
)

$
4,163       December 31,2006


2005Beginning balance

$
81,066


$
82,245Goodwill recorded in acquiring
    Similarity


46,415



-Goodwill recorded in acquiring
    Itemfield


43,202



-Subsequent goodwill adjustments


-



(1,179
)Ending balance

$
170,683


$
81,066    71




---



##### Table of Contents



INFORMATICA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    7.
    Facilities
    Restructuring Charges  2004
    Restructuring Plan
      2001
    Restructuring Plan
       72




---



##### Table of Contents



INFORMATICA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Accrued














AccruedRestructuring














RestructuringCharges at














Charges atDecember 31,


Restructuring


Net Cash


Non-cash


December 31,2005


Charges


Adjustments


Payment


Reclass


20062004 Restructuring
    PlanExcess lease facilities

$
78,129


$
4,309


$
(854
)

$
(9,745
)

$
(161
)

$
71,6782001 Restructuring
    PlanExcess lease facilities


16,404



-



(244
)


(4,028
)


-



12,132$
94,533


$
4,309


$
(1,098
)

$
(13,772
)

$
(161
)

$
83,810     Accrued














AccruedRestructuring














RestructuringCharges at














Charges atDecember 31,


Restructuring


Net Cash


Non-cash


December 31,2004


Charges


Adjustments


Payment


Reclass


20052004 Restructuring
    PlanExcess lease facilities

$
88,521


$
4,767


$
(1,133
)

$
(13,924
)

$
(102
)

$
78,1292001 Restructuring
    PlanExcess lease facilities


20,730



-



49



(4,375
)


-



16,404$
109,251


$
4,767


$
(1,084
)

$
(18,299
)

$
(102
)

$
94,533       8.
    Convertible
    Senior Notes   73




---



##### Table of Contents



INFORMATICA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Accounting for Derivative Instruments
    and Hedging Activities 00-19, Accounting for Derivative Financial Instruments Indexed to,
    and Potentially Settled in, a Companys Own Stock
      Over-the-Counter
 74




---



##### Table of Contents



INFORMATICA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    9.
    Commitments
    and Contingencies  Lease
    Obligations
          Operating


SubleaseLeases


Income


Net2007


21,985



3,075



18,9102008


18,170



2,752



15,4182009


17,996



1,592



16,4042010


17,876



285



17,5912011


17,980



1,932



16,048Thereafter


30,261



3,669



26,592$
124,268


$
13,305


$
110,963      75




---



##### Table of Contents



INFORMATICA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Warranties
  Accounting for Contingencies.
  Indemnification
        Accounting for Contingencies.
  10.
    Stockholders
    Equity  Preferred
    Stock
   76




---



##### Table of Contents



INFORMATICA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Common
    Stock
    Stockholders
    Rights Plan
    Stock
    Repurchase Plan
    Repurchase
    Rights
    11.
    Interest
    Income, Net and Other Expense, Net   77




---



##### Table of Contents



INFORMATICA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Years Ended December 31,2006


2005


2004Foreign currency gain (loss)

$
(518
)

$
(617
)

$
540Other


(65
)


(95
)


(598
)$
(583
)

$
(712
)

$
(58
)   12.
    Comprehensive
    Income (Loss)      Years Ended December 31,2006


2005


2004Net income (loss), as reported

$
36,206


$
33,804


$
(104,404
)Other comprehensive income (loss):Unrealized gain (loss) on
    investments*


559



(57
)


(797
)Cumulative translation adjustment*


1,776



(2,257
)


786Comprehensive income (loss)

$
38,541


$
31,490


$
(104,415
)   *
    The tax effect on unrealized gain
    (loss) on investment and foreign currency translation adjustment
    has not been significant.    December 31,2006


2005Unrealized loss on
    available-for-sale
    investments

$
(143
)

$
(702
)Cumulative translation adjustment


1,939



163$
1,796


$
(539
)   13.
    Investment
    Impairment   78




---



##### Table of Contents



INFORMATICA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    14.
    Employee
    401(K) Plan    15.
    Income
    Taxes    Years Ended December 31,2006


2005


2004Current:Federal

$
(177
)

$
350


$
211State


1,100



450



150Foreign


3,561



1,374



859Total current


4,484



2,174



1,220Deferred:Federal


853



-



-State


140



-



-Total deferred


993



-



-Income tax provision

$
5,477


$
2,174


$
1,220     Years Ended December 31,2006


2005


2004Domestic

$
52,571


$
42,343


$
(94,384
)Foreign


(10,888
)


(6,365
)


(8,800
)$
41,683


$
35,978


$
(103,184
)  79




---



##### Table of Contents



INFORMATICA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Years Ended December 31,2006


2005


2004Income tax provision (benefit)
    computed at federal statutory income tax rate

$
14,589


$
12,592


$
(36,114
)Federal alternative minimum tax


-



1,062



611State taxes


715



293



98Foreign taxes


3,562



1,374



859Stock-based compensation


1,646



642



1,928Other


(603
)


(554
)


(437
)Valuation allowance


(14,432
)


(13,235
)


34,275$
5,477


$
2,174


$
1,220     December 31,2006


2005Deferred tax assets:Net operating loss carryforwards

$
7,873


$
16,875Tax credit carryforwards


12,790



12,441Deferred revenue


5,648



1,576Reserves and accrued costs not
    currently deductible


2,960



743Depreciable assets


15,986



8,416Accrued restructuring costs


32,949



48,395Amortization of intangibles


3,227



1,131Capitalized research and
    development


1,911



2,329Stock-based compensation


3,654



-Other


214



205Valuation allowance


(82,626
)


(91,678
)Total deferred tax assets


4,586



433Deferred tax liabilities:Non-deductible intangible assets


(5,579
)


(433
)$
(993
)

$
-      80




---



##### Table of Contents



INFORMATICA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
           16.
    Litigation  In re
    Informatica Corporation Initial Public Offering Securities
    Litigation, Civ.
    No. 01-9922
    (SAS) (S.D.N.Y.) In re Initial Public
    Offering Securities Litigation, 21 MC 92 (SAS)
    (S.D.N.Y.). and/or and/or
       81




---



##### Table of Contents



INFORMATICA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   In re
    Initial Public Offering Securities Litigation
        17.
    Related
    Party Transaction    18.
    Significant
    Customer Information and Segment Information   82




---



##### Table of Contents



INFORMATICA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Years Ended December 31,2006


2005


2004Revenues:North America

$
226,731


$
185,118


$
156,565Europe


80,117



73,398



54,951Other


17,750



8,915



8,165$
324,598


$
267,431


$
219,681   December 31,2006


2005Long-lived assets (excluding
    assets not allocated):North America

$
27,995


$
21,708Europe

$
1,984


$
2,571Other

$
1,023


$
910$
31,002


$
25,189     For the Years Ended December 31,2006


2005


2004License

$
146,092


$
120,182


$
97,941Maintenance


124,955



103,573



87,470Consulting and education


53,551



43,676



34,270$
324,598


$
267,431


$
219,681  83




---



##### Table of Contents



INFORMATICA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   19.
    Selected
    Quarterly Financial Information (Unaudited)  Three Months EndedDecember 31,


September 30,


June 30,


March 31,2006


2006


2006


2006(In thousands, except per share data)Total revenues

$
91,801


$
78,930


$
80,810


$
73,057Gross profit


72,008



63,321



63,874



57,897Facilities restructuring charges


(174
)


1,108



1,129



1,149Income from operations


12,382



7,403



6,021



4,054Net income


13,925



9,384



7,629



5,268Net income per common share:Basic

$
0.16


$
0.11


$
0.09


$
0.06Diluted

$
0.15


$
0.10


$
0.08


$
0.06Shares used in computing basic net
    income per common share:Basic


86,168



86,187



85,860



87,566Diluted


103,176



92,412



93,062



97,147   Earning per Share,
  Three Months EndedDecember 31,


September 30,


June 30,


March 31,2005


2005


2005


2005(In thousands, except per share data)Total revenues

$
79,838


$
64,997


$
64,205


$
58,391Gross profit


64,469



52,360



51,450



46,964Facilities restructuring charges


781



1,274



70



1,558Income from operations


11,131



6,804



6,851



4,648Net income


13,553



8,301



7,641



4,309Net income per common share:Basic

$
0.15


$
0.09


$
0.09


$
0.05Diluted

$
0.14


$
0.09


$
0.09


$
0.05Shares used in computing basic net
    income per common share:Basic


87,651



87,568



86,876



86,886Diluted


94,163



93,571



89,760



89,284   period-to-period
 84




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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. Form 10-K.
  Managements annual report on internal control
    over financial reporting. Form 10-K,
  Change in internal control over financial
    reporting.
  ITEM 9B.
    OTHER
    INFORMATION   PART III   ITEM 10.
    DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE  Regulation S-K
   ITEM 11.
    EXECUTIVE
    COMPENSATION   85




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##### Table of Contents



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   PART IV   ITEM 15.
    EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES  Form 10-K:
  1.
    Consolidated Financial Statements:    2.
    Financial Statement Schedule:       86




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##### Table of Contents



Schedule IIValuation
    and Qualifying Accounts (In
    thousands)
  Balance


Charged to








Balanceat Beginning


Costs and








at EndDescription

of Period


Expenses


Acquisitions


Deductions


of PeriodProvision for Doubtful
    Accounts:Year ended December 31, 2006

$
870


$
(32
)

$
837


$
(9
)

$
1,666Year ended December 31, 2005

$
811


$
150


$
-


$
(91
)

$
870Year ended December 31, 2004

$
564


$
361


$
-


$
(114
)

$
811Sales and Returns
    Allowances:Year ended December 31, 2006

$
224


$
-


$
-


$
(224
)

$
-Year ended December 31, 2005

$
38


$
200


$
-


$
(14
)

$
224Year ended December 31, 2004

$
705


$
(356
)

$
-


$
(311
)

$
38   3.
    Exhibits  10-K.
 87




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##### Table of Contents



SIGNATURES    INFORMATICA CORPORATION
  By:
    /s/  Sohaib
    Abbasi   Chief Executive Officer, President, and 
    Chairman of the Board
  Form 10-K
  Signature

Title

Date/s/  Sohaib
    AbbasiSohaib
    Abbasi

Chief Executive Officer,
    President, and Chairman of the Board of Directors (Principal
    Executive Officer)

February 28, 2007/s/  Earl
    FryEarl
    Fry

Chief Financial Officer, Executive
    Vice President, and Secretary (Principal Financial and
    Accounting Officer)

February 28, 2007/s/  David
    PidwellDavid
    Pidwell

Director

February 28, 2007/s/  Mark
    BertelsenMark
    Bertelsen

Director

February 28, 2007/s/  Janice
    ChaffinJanice
    Chaffin

Director

February 28, 2007/s/  Charles
    RobelCharles
    Robel

Director

February 28, 2007/s/  Brooke
    SeawellA.
    Brooke Seawell

Director

February 28, 2007/s/  Geoff
    SquireGeoff
    Squire

Director

February 28, 2007/s/  Carl
    YankowskiCarl
    Yankowski

Director

February 28, 2007  88




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##### Table of Contents



INFORMATICA
    CORPORATION
  EXHIBITS TO
    FORM 10-K
    ANNUAL REPORT
  For the
    year ended December 31, 2006
  ExhibitNumber

Document2.1

Share Purchase Agreement for the
    sale and purchase of the entire issued share capital of
    Similarity Systems Limited dated January 26, 2006.3.1

Amended and Restated Certificate of
    Incorporation of Informatica Corporation (incorporated by
    reference to Exhibit 3.1 to Amendment No. 1 of the
    Companys Registration Statement on
    Form S-1
    (Commission File
    No. 333-72677)
    filed on April 8, 1999).3.2

Certificate of Amendment to the
    Companys Amended and Restated Certificate of Incorporation
    to increase the aggregate number of shares of the Companys
    common stock authorized for issuance from 100,000,000 to
    200,000,000 shares (incorporated by reference to
    Exhibit 3.4 to the Companys Quarterly Report on
    Form 10-Q
    filed on August 14, 2000, Commission File
    No. 0-25871).3.3

Certificate of Designation of the
    Rights, Preferences and Privileges of Series A
    Participating Preferred Stock of Informatica Corporation
    (incorporated by reference to Exhibit 3.5 to the
    Companys Registration Statement on
    Form 8-A
    filed on November 6, 2001, Commission File
    No. 0-25871).3.4

Bylaws, as amended, of Informatica
    Corporation (incorporated by reference to Exhibit 3.4 to
    the Companys Annual Report on
    Form 10-Q
    filed on February 28, 2006, Commission File
    No. 0-25871).4.1

Reference is made to
    Exhibits 3.1 through 3.4.4.2

Preferred Stock Rights Agreement,
    dated as of October 17, 2001, between Informatica
    Corporation and American Stock Transfer & Trust Company
    (incorporated by reference to Exhibit 4.2 to the
    Companys Registration Statement on
    Form 8-A
    filed on November 6, 2001, Commission File
    No. 0-25871).4.3

Indenture, dated March 13,
    2006, between the Company and U.S. Bank National
    Association (incorporated by reference to Exhibit 4.1 of
    the Companys Current Report on
    Form 8-K
    filed on March 14, 2006, Commission File
    No. 0-25871).4.4

Form of 3% Convertible Senior
    Note due 2026 (incorporated by reference to Exhibit 4.2 of
    the Companys Current Report on
    Form 8-K
    filed on March 14, 2006, Commission File
    No. 0-25871).4.5

Registration Rights Agreement,
    dated as of March 13, 2006, between the Company and UBS
    Securities LLC (incorporated by reference to Exhibit 4.3 of
    the Companys Current Report on
    Form 8-K
    filed on March 14, 2006, Commission File
    No. 0-25871).10.1*

Companys 2000 Employee Stock
    Incentive Plan, as amended (incorporated by reference to
    Exhibit 10.1 to the Companys Quarterly Report on
    Form 10-Q
    filed on August 8, 2001, Commission File
    No. 0-25871).10.2*

Form of Indemnification Agreement
    between the Company and each of its executive officers and
    directors (incorporated by reference to Exhibit 10.1 to
    Amendment No. 1 of the Companys Registration
    Statement on
    Form S-1
    (Commission File
    No. 333-72677)
    filed on April 8, 1999).10.3*

Companys 1996 Flexible Stock
    Incentive Plan, including forms of agreements thereunder
    (incorporated by reference to Exhibit 10.10 to the
    Companys Registration Statement on
    Form S-1
    (Commission File
    No. 333-72677)
    filed on February 19, 1999).10.4*

Companys 1999 Stock Incentive
    Plan, as amended (incorporated by reference to Exhibit 4.3
    to the Companys Registration Statement on
    Form S-8
    (Commission File
    No. 333-66754)
    filed on August 3, 2001).10.5*

Companys 1999 Employee Stock
    Purchase Plan, as amended, including forms of agreements
    thereunder (incorporated by reference to Exhibit 10.1 to
    the Companys Quarterly Report on
    Form 10-Q
    filed on May 9, 2006, Commission File
    No. 0-25871).10.6*

Companys 1999 Non-Employee
    Director Stock Incentive Plan (incorporated by reference to
    Exhibit 10.13 to Amendment No. 1 of the Companys
    Registration Statement on
    Form S-1
    (Commission File
    No. 333-72677)
    filed on April 8, 1999).10.7

Lease Agreement regarding Building
    1 Lease, dated as of February 22, 2000, by and between the
    Company and Pacific Shores Center LLC (incorporated by reference
    to Exhibit 10.14 to the Annual Report on
    Form 10-K
    filed on March 30, 2000, Commission File
    No. 0-25871).10.8

Lease Agreement regarding Building
    2 Lease, dated as of February 22, 2000, by and between the
    Company and Pacific Shores Center LLC (Incorporated by reference
    to Exhibit 10.15 to the Annual Report on
    Form 10-K
    filed on March 30, 2000, Commission File
    No. 0-25871).10.9*

Description of management
    arrangement with Earl E. Fry (incorporated by reference to
    Exhibit 10.20 to the Companys Quarterly Report on
    Form 10-Q
    filed on November 13, 2002, Commission File
    No. 0-25871).10.10*

Amendment to 1999 Non-Employee
    Director Stock Incentive Plan (incorporated by reference to
    Exhibit 10.21 to the Companys Quarterly Report on
    Form 10-Q
    filed on August 7, 2003, Commission File
    No. 0-25871). 89




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##### Table of Contents



ExhibitNumber

Document10.11*

Agreement on the Forgiveness of
    Employee Loan dated September 13, 2001, by and between the
    Company and Earl E. Fry (incorporated by reference to
    Exhibit 99.1 to Amendment No. 1 of the Companys
    Registration Statement on
    Form S-3
    (Commission File
    No. 333-109683)
    filed on December 24, 2003).10.12*

Employment Agreement dated
    July 19, 2004 by and between Company and Sohaib Abbasi
    (incorporated by reference to Exhibit 10.26 of the
    Companys Quarterly Report on
    Form 10-Q
    filed on August 5, 2004, Commission File
    No. 0-25871).10.13

Lease Agreement dated as of
    October 7, 2004, by and between the Company and Seaport
    Plaza Associates, LLC (incorporated by reference to
    Exhibit 10.28 of the Companys Annual Report on
    Form 10-K
    filed on March 8, 2005, Commission File
    No. 0-25871).10.14*

Form of Executive Severance
    Agreement dated November 15, 2004 by and between the
    Company and each of Earl E. Fry and Girish Pancha (incorporated
    by reference to Exhibit 10.29 of the Companys Annual
    Report on
    Form 10-K
    filed on March 8, 2005, Commission File
    No. 0-25871).10.15*

Offer Letter dated January 4,
    2005, by and between the Company and Paul J. Hoffman
    (incorporated by reference to Exhibit 10.31 of the
    Companys Quarterly Report on
    Form 10-Q
    filed on May 9, 2005, Commission File
    No. 0-25871).10.16*

Executive Severance Agreement dated
    January 4, 2005 by and between the Company and Paul J.
    Hoffman (incorporated by reference to Exhibit 10.31 of the
    Companys Quarterly Report on
    Form 10-Q
    filed on May 9, 2005, Commission File
    No. 0-25871).10.17*

2005 Cash Bonus Plan (incorporated
    by reference to Exhibit 10.31 of the Companys
    Quarterly Report on
    Form 10-Q
    filed on May 9, 2005, Commission File
    No. 0-25871).10.18*

Summary of amended standard
    director cash compensation arrangements (incorporated by
    reference to Item 1.01 of the Companys Current Report
    on
    Form 8-K
    filed on October 20, 2005, Commission File
    No. 0-25871).10.19*

Offer Letter dated
    February 22, 2006 by and between the Company and Brian
    Gentile (incorporated by reference to Exhibit 10.2 to the
    Companys Quarterly Report on
    Form 10-Q
    filed May 9, 2006, Commission File
    No. 0-25871).10.20*

Executive Severance Agreement dated
    February 22, 2006 by and between the Company and Brian
    Gentile (incorporated by reference to Exhibit 10.3 to the
    Companys Quarterly Report on
    Form 10-Q
    filed May 9, 2006, Commission File
    No. 0-25871).21.1

List of Subsidiaries.23.1

Consent of Independent Registered
    Public Accounting Firm.31.1

Certification of Chief Executive
    Officer pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002.31.2

Certification of Chief Financial
    Officer pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002.32.1

Certification of Chief Executive
    Officer and Chief Financial Officer pursuant to 18 U.S.C.
    Section 1350, as adopted pursuant to Section 906 of
    the Sarbanes-Oxley Act of 2002.    *
    
    Indicates management contract or compensatory plan or
    arrangement. 90