##### 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 1934
  For the fiscal year ended December 31, 2006
  o  TRANSITION
    REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934
  For the transition period from
    
    to
  Commission file number 0-29291
      Corillian Corporation
 (Exact name of registrant as
    specified in its charter)
  Oregon(State or other
    Jurisdiction of
    Incorporation or Organization)

91-1795219(I.R.S. Employer
    Identification Number)3400 NW John Olsen Place
    Hillsboro, Oregon(Address of principal
    executive offices)

97124(Zip
    Code)   (503) 629-3300 (Telephone number)
  Securities registered pursuant to Section 12(b) of the
    Act:
   Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, no par value

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




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##### 



FORM 10-K
  TABLE OF
    CONTENTS
  PART IItem 1.

Business


2Item 1A.

Risk
    Factors


14Item 1B.

Unresolved Staff
    Comments


21Item 2.

Properties


21Item 3.

Legal
    Proceedings


21Item 4.

Submission of
    Matters to a Vote of Security Holders


21PART IIItem 5.

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


22Item 6.

Selected Financial
    Data


23Item 7.

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


24Item 7A.

Quantitative and
    Qualitative Disclosures About Market Risk


33Item 8.

Financial
    Statements and Supplementary Data


34Item 9.

Changes in and
    Disagreements With Accountants on Accounting and Financial
    Disclosure


34Item 9A.

Controls and
    Procedures


34Item 9B.

Other
    Information


37PART IIIItem 10.

Directors,
    Executive Officers and Corporate Governance


37Item 11.

Executive
    Compensation


37Item 12.

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


37Item 13.

Certain
    Relationships and Related Transactions, and Director
    Independence


39Item 14.

Principal
    Accountant Fees and Services


39PART IVItem 15.

Exhibits and
    Financial Statement Schedules


40EXHIBIT 10.6EXHIBIT 10.15EXHIBIT 21.1EXHIBIT 23.1EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1   1




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##### Table of Contents



PART I  Item 1.
    Business  Special
    Note Regarding Forward-Looking Statements
  This Annual Report on
    Form 10-K
    and the documents incorporated herein by reference contain
    forward-looking statements within the meaning of the Private
    Securities Litigation Reform Act of 1995. All statements other
    than statements of historical fact made in this Annual Report on
    Form 10-K
    are forward-looking including but not limited to, expectations
    and beliefs regarding the acquisition of the company and its
    timing; statements regarding industry prospects; future results
    of operations or position; our expectations and beliefs
    regarding future revenue growth; the future capabilities and
    functionality of our products and services; our strategies and
    intentions regarding acquisitions and their integration; the
    outcome of any litigation to which we are a party; our
    accounting and tax policies; our future strategies regarding
    investments, product offerings, research and development, market
    share, and strategic relationships and collaboration; our
    dividend policies; our future capital requirements; and our
    intentions and expectations regarding credit facilities. These
    statements relate to future events or our future financial
    performance. In some cases, you can identify forward-looking
    statements by terminology including intend,
    could, may, will,
    should, expect, plan,
    anticipate, believe,
    estimate, predict,
    potential, future, or
    continue, the negative of these terms or other
    comparable terminology. These statements are only predictions.
    Actual events or results may differ materially from those
    expressed or implied in such forward-looking statements. In
    evaluating these statements, you should specifically consider
    various factors, including the risks described in greater detail
    in Part 1, Item 1A,Risk Factors, our
    registration statements and reports filed with the Securities
    and Exchange Commission, and contained in our press releases
    from time to time.
  We do not guarantee future results, levels of activity,
    performance or achievements. We do not intend to update any of
    the forward-looking statements after the date of this document
    to conform them to actual results or to changes in our
    expectations.
  The following discussion should be read in conjunction with
    our Consolidated Financial Statements and the related notes and
    other financial information appearing elsewhere in this Annual
    Report on
    Form 10-K.
  Overview
      www.corillian.com/investors/ Form 10-K, Form 10-Q, Form 8-K,
 2




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##### Table of Contents



Pending
    Acquisition of Corillian
    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 TRANSACTIONS.
    Form 10-K,
  Industry
    Background
    
    twenty-four hour, real-time, secure access to information and
    financial services from any Internet device;
    convenient and inexpensive money movement tools;
    improved personal finance management; and
    the presentation of comprehensive consolidated financial data.  time-to-market
  time-to-market
 3




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##### Table of Contents



The
    Corillian Solutions
      Accelerated Time to Market.
  Highly Scalable and Extensible Platform. point-of-presence.
  Flexibility and Control.
  Advanced Technology and Continued
    Innovation.
  Reduced Cost of Internet Operations.
 4




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Strategy
    Increase Market Share.
  Expand Breadth of Product and Service
    Offerings.
  Leverage and Expand Strategic
    Relationships.
  Collaborate with Technology Leaders.
  Products
    and Services
    Corillian
    Voyager (tm)
  point-of-presence.
 5




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##### Table of Contents



Line
    of Business Applications
  Consumer Banking.
  Small Business Banking.
  Corporate Banking. up-to-date
  Credit Card Management.
  Wealth Management.
  Enterprise
    Applications
  Corillian Payments.
  Corillian Alerts. text-to-speech,
 6




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##### Table of Contents



Corillian eStatements.
  Corillian OFX.
  Corillian Personal Money Manager.
  ACH and Wire Transfers. up-to-date
  Enterprise Entitlements.
  Corillian Security Solutions.
  
    Corillian Fraud Detection System.  Early
    warning system for Internet-based attacks against web sites;
    Corillian Intelligent Authentication.  Solution
    designed to provide multi-layered, multi-factor authentication
    without sacrificing usability;
    Web site Investigation &
    Forensics.  Tools and techniques for separating
    normal from abusive or fraudulent web site activity;
    Secure Coding Workshop.  Workshop covering
    state-of-the-art
    secure coding techniques for web sites;
    Delivery System Security Review.  Delivery
    system review to help ensure resistance to security
    threats; and
    Code-level Security Review.  Code-level
    review by Senior Security Engineers for potential security
    issues (Voyager-Specific).  Corillian MultiPoint Integrator.
  Corillian
    Member
    Advantage (tm)
  best-in-class
 7




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##### Table of Contents



Professional
    Services
    Implementation Services.
  Hosting Services.
  Consulting Services.
  Support Services.
  Directory Management Services.
  Training Services.
 8




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##### Table of Contents



Systems
    and Technology
  Corillian
    Voyager
    mark-up
  Corillian
    Technology
    
    Scalable Framework.  Each of the layers of
    Corillian Voyager is a software component that can be replicated
    within the Corillian Voyager configuration for redundancy and
    scalability. By adding an incremental component, work is
    distributed among servers across a network.
    Flexible Interfaces.  Our solutions are
    designed to integrate with virtually any existing host system,
    providing a means for financial service providers to easily
    bring existing applications to the Internet. Our host server
    technology allows multiple simultaneous access to different
    existing and third-party systems. In addition, browser
    interfaces are customizable in form and function, allowing the
    financial service provider to display unique branding,
    advertising, and extended functionality.
    Advanced Architecture.  The open architecture
    of Corillian Voyager enables flexible integration and rapid
    deployment of our line of business applications, as well as
    Corillian-certified applications from our partners. Powered by
    Microsoft®
    Windows Server 2003 and Microsoft.NET, Corillian Voyager is
    built to incorporate emerging Internet finance technology. This
    architectural standard allows our applications to interoperate
    with other application servers, such as teller and call center
    platforms and automated teller machine delivery systems.
    Open Financial Exchange Data Standard.  Our
    solutions employ the Open Financial Exchange data standard,
    which was developed by Microsoft, CheckFree and Intuit to
    provide a unified specification for the electronic exchange of
    financial data among financial institutions, businesses and
    consumers over the Internet. This data specification
    standardizes the connection to financial data centers and to
    personal financial management software. By using the Open
    Financial Exchange data standard, all financial information
    retrieved from a financial institution can be quickly downloaded
    to consumer software programs, such as Microsoft Money and
    Quicken.  Customers
    Strategic
    Alliances and Partnerships
   9




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##### Table of Contents



CheckFree
    Corporation
    Microsoft
    Corporation
    NCR
    Corporation
  tm
      Matrix
    Ltd.
  Matrix Ltd.
  Online
    Resources Corporation
  end-to-end,
 10




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##### Table of Contents



Quova,
    Inc.
  tm
  Sales and
    Marketing
        Research
    and Development
    
    Enhancements to Existing Products and
    Services.  We continue to update and modify our
    solutions to enhance quality, performance and scalability, to
    extend functionality to address our customers changing
    needs, and to take advantage of improved technology within our
    industry.
    Developing New Products and Services.  We are
    working to expand our product and service offerings. We intend
    to expand our product offerings to include new consumer banking
    functions, as well as applications for wealth management and
    corporate cash management.
    Participating in Technology Testing and
    Collaboration.  We have participated in the
    development of industry data standards and will continue to
    collaborate with companies to develop new technologies and to
    encourage the adoption and implementation of open standards that
    can foster and simplify the exchange of financial information
    through the Internet.  Competition
   11




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##### Table of Contents




    our market presence with financial service providers;
    the reliability, scalability, security, speed and performance of
    our solutions and services;
    the comprehensiveness, ease of use and service level of our
    products and services;
    our ability to continue to interface with financial service
    providers and their technology;
    our pricing policies and the pricing policies of our competitors
    and suppliers;
    the timing of introductions of new products and services by us
    and our competitors; and
    our ability to meet our customers expectations.    Intellectual
    Property
     12




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Government
    Regulation
          Backlog
    Employees
    Certain
    Financial Information
   13




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##### Table of Contents



Item 1A.
    Risk
    Factors  Certain risk factors may affect our business, financial
    condition, results of operation and cash flows, or may cause our
    actual results to vary from the forward-looking statements
    contained in this Annual Report on
    Form 10-K.
    You should carefully consider the following factors regarding
    information included in this Annual Report. The risks and
    uncertainties described below are not the only ones we face.
    Additional risks and uncertainties not presently known to us or
    that we currently deem immaterial also may impair our business
    operations. If any of the following risks actually occur, our
    business, financial condition and operating results could be
    materially adversely affected.
  The
    Announced Merger with CheckFree May Adversely Affect the Market
    Price of Our Common Stock and Our Results of
    Operations.
    If the
    Merger Does Not Occur, We Will Not Benefit from the Expenses We
    Have Incurred in Preparation for the Merger.
  out-of-pocket
  We
    Have a History of Losses and May Incur Losses in Future Periods
    if We are Not Able to, Among Other Things, Increase Our Sales to
    New and Existing Customers
    Our
    Quarterly Results Fluctuate Significantly and May Fall Short of
    Anticipated Levels, Which May Cause the Price of Our Common
    Stock to Decline
  percentage-of-completion period-to-period
 14




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A
    Small Number of Customers Account for a Substantial Portion of
    Our Revenues in Each Period; Our Results of Operations and
    Financial Condition Could Suffer if We Lose Customers or Fails
    to Add Additional Customers to Our Customer Base
    If We,
    or Our Implementation Partners, Do Not Effectively Implement Our
    Solutions, We May Not Achieve Anticipated Revenues or Gross
    Margins
  percentage-of-completion
    If Our
    Goodwill or Amortizable Intangible Assets Become Impaired, We
    May Be Required to Record a Significant Charge to
    Earnings
    The
    Lengthy Sales Cycles of Our Products May Cause Revenues and
    Operating Results to Be Unpredictable and to Vary Significantly
    from Period to Period
   15




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Subscription-Based
    Licensing of Our Products and Services May Have An Adverse
    Effect On Near-Term Revenue
    We May
    Not Achieve Anticipated Revenues If We Do Not Successfully
    Introduce New Products or Develop Upgrades or Enhancements to
    Our Existing Products
    Acquisitions
    May Be Costly and Difficult to Integrate, Divert Management
    Resources or Dilute Shareholder Value
    
    issue stock that would dilute our current shareholders
    percentage ownership;
    incur debt and assume liabilities; and
    incur amortization expenses related to intangible assets or
    incur large impairment charges.    
    problems combining the purchased operations, technologies or
    products;
    problems integrating the business models of acquisition targets
    with ours;
    unanticipated costs;
    diversion of managements attention from our core business;
    adverse effects on existing business relationships with
    suppliers and customers;
    entering markets in which we have no or limited prior
    experience; and
    potential loss of key employees, particularly those of the
    purchased organization. 16




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Our
    Partners May Be Unable to Fulfill Their Service Obligations and
    Cause Us to Incur Penalties or Other Expenses with Our
    Customers
    Our
    Facility and Operations May Be Disabled by a Disaster or Similar
    Event, Which Could Damage Our Reputation and Require Us to Incur
    Financial Loss
    Competition
    in the Market for Internet-Based Financial Services is Intense
    and Could Reduce Our Sales and Prevent Us from Achieving
    Profitability
        
    a longer operating history;
    more extensive name recognition and marketing power;
    preferred vendor status with our existing and potential
    customers; and
    significantly greater financial, technical, marketing and other
    resources, giving them the ability to respond more quickly to
    new or changing opportunities, technologies and customer
    requirements. 17




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Consolidation
    in the Financial Services Industry Could Reduce the Number of
    Our Customers and Potential Customers
      If We
    Lose Key Personnel, We Could Experience Reduced Sales, Delayed
    Product Development and Diversion of Management
    Resources
    If We
    Do Not Develop International Operations as Expected or Fail to
    Address International Market Risks, We May Not Achieve
    Anticipated Sales Growth
    
    longer accounts receivable collection cycles;
    expenses associated with localizing products for foreign markets;
    difficulties in managing operations and partners across
    disparate geographic areas;
    difficulties in hiring qualified local personnel, finding
    qualified partners and complying with disparate labor laws;
    foreign currency exchange rate fluctuations;
    difficulties associated with enforcing agreements and collecting
    receivables through foreign legal systems; and
    unexpected changes in regulatory requirements that impose
    multiple conflicting tax laws and regulations.   18




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If We
    Become Subject to Intellectual Property Infringement Claims,
    These Claims Could Be Costly and Time Consuming to Defend,
    Divert Management Attention or Cause Product
    Delays
      Network
    or Internet Security Problems Could Damage Our Reputation and
    Business
      New
    Technologies Could Render Our Products Obsolete
      Defects
    in Our Solutions and System Errors in Our Customers Data
    Processing Systems After Installing Our Solutions Could Result
    in Loss of Revenues, Delay in Market Acceptance and Injury to
    Our Reputation
   19




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Our
    Products and Services Must Interact With Other Vendors
    Products, Which May Result in System Errors
    If We
    Become Subject to Product Liability Litigation, it Could be
    Costly and Time Consuming to Defend
    If We
    are Unable to Protect Our Intellectual Property, We May Lose a
    Valuable Competitive Advantage or be Forced to Incur Costly
    Litigation to Protect Our Rights
        Increasing
    Government Regulation of the Internet and the Financial Services
    Industry Could Limit the Market for Our Products and Services,
    Impose on Our Liability for Transmission of Protected Data and
    Increase Our Expenses
     20




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##### Table of Contents



Item 1B:
    Unresolved
    Staff Comments    Item 2.
    Properties      Item 3.
    Legal
    Proceedings    Item 4.
    Submission
    of Matters to a Vote of Security Holders   21




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PART II  Item 5.
    Market
    for the Registrants Common Equity, Related Shareholder
    Matters and Issuer Purchases of Equity Securities    High


LowYear ended December 31, 2006First Quarter

$
3.93


$
2.69Second Quarter

$
4.12


$
2.68Third Quarter

$
2.99


$
2.44Fourth Quarter

$
3.82


$
2.58Year ended December 31, 2005First Quarter

$
4.95


$
2.82Second Quarter

$
3.67


$
3.01Third Quarter

$
3.46


$
3.02Fourth Quarter

$
3.27


$
2.43       The stock price performance shown on the
    graph below is not necessarily indicative of future price
    performance.
  Total
    Shareholder Return
  
   22




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Item 6.  Selected
    Financial Data   Year Ended December 31,2006


2005


2004


2003


2002(In thousands, except for per share amounts)Consolidated Statement of
    Operations Data(1):Revenues

$
60,958


$
49,220


$
50,794


$
46,132


$
39,141Gross profit


30,675



28,924



32,345



25,631



18,719(Loss) income from operations(4)(5)


(2,117
)(2)


1,856



11,185
(2)


6,396



(15,910
)(3)Net (loss) income(4)(5)


(1,072
)


2,653



10,480



5,126



(17,257
)Net (loss) income per share:Basic

$
(0.02
)

$
0.06


$
0.28


$
0.14


$
(0.49
)Diluted

$
(0.02
)

$
0.06


$
0.26


$
0.14


$
(0.49
)Weighted average shares:Basic


44,938



41,039



37,727



36,431



35,477Diluted


44,938



42,146



40,474



37,813



35,477     (1)
    
    Our Consolidated Financial Statements and notes thereto reflect
    our acquisitions of qbt Systems, Inc. and InteliData
    Technologies on August 8, 2005 and August 18, 2005,
    respectively. The occurrence of the acquisitions in 2005 affects
    comparability of financial information for 2006.(2)
    
    We recorded impairment charges of $396 and $491 during the years
    ended December 31, 2006 and 2004, respectively. See
    Note 10 to the Consolidated Financial Statements for
    further discussion.(3)
    
    We recorded restructuring and litigation settlement charges of
    $682 and $2,580, respectively, during the year ended
    December 31, 2002.(4)
    
    In 2006, net income and net income per share includes
    $2.3 million of stock-based compensation from the impact of
    adopting Statement of Financial Accounting Standards
    (FAS) No. 123 (revised 2004), Share-Based
    Payment, (FAS 123(R)). See Note 6 to
    the Consolidated Financial Statements for further discussion.(5)
    
    In 2006 and 2005, we had $1.6 million and $644,000 of
    amortization of acquisition related intangibles from the
    acquisitions of qbt Systems, Inc. and InteliData Technologies on
    August 8, 2005 and August 18, 2005, respectively. 23




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Year Ended December 31,2006


2005


2004


2003


2002(In thousands, except for per share amounts)Consolidated Balance Sheet
    Data(1):Cash and cash equivalents

$
17,166


$
16,722


$
29,200


$
16,943


$
13,221Restricted cash


















1,003Short-term investments


8,050



8,800



10,150



9,901



4,410Working capital


22,793



20,393



29,417



14,417



5,924Total assets


80,596



79,339



55,269



42,818



37,479Debt and capital leases, long-term
    portion










629



1,075



1,600Total shareholders equity


56,761



54,733



32,602



19,554



13,121Cash dividends declared


















     (1)
    
    Our Consolidated Financial Statements and notes thereto reflect
    our acquisitions of qbt Systems, Inc. and InteliData
    Technologies on August 8, 2005 and August 18, 2005,
    respectively. The occurrence of the acquisitions in 2005 affects
    comparability of financial information on December 31, 2006
    and 2005.  Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Forward-Looking
    Statements
  The following discussion contains forward-looking statements
    that involve risks and uncertainties. Our actual results could
    differ materially from those anticipated in the forward-looking
    statements as a result of certain factors, including the risks
    described in greater detail in Part 1, Item 1A,
    Risk Factors, and elsewhere in this
    Form 10-K.
    See Part I, Item 1, Business  Special
    Note Regarding Forward Looking Statements.
  We do not guarantee future results, levels of activity,
    performance or achievements. We do not intend to update any of
    the forward-looking statements after the date of this document
    to conform them to actual results or to changes in our
    expectations.
  Pending
    Acquisition of Corillian
    Form 10-K,
  Overview
   24




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Critical
    Accounting Policies and Estimates
    Allowance for Doubtful Accounts.
  Impairment of Goodwill and Intangible Assets and Long-Lived
    Assets. Goodwill and
    Other Intangible Assets Accounting for the Impairment or
    Disposal of Long-Lived Assets
  Stock-Based Compensation.
 25




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Accounting for Stock-Based Compensation
        Revenue Recognition. No. 97-2, Software Revenue Recognition, SOP No. 98-9, Modification of
    SOP No. 97-2,
    Software Revenue Recognition, with Respect to Certain
    Transactions (SOP No. 97-2). percentage-of-completion SOP No. 81-1, Accounting for Performance of Construction-Type and Certain
    Production-Type Contracts (SOP No. 81-1). 00-3, Application of AICPA Statement of Position
    97-2 to
    Arrangements that Include the Right to Use Software Stored on
    Another Entitys Hardware.
    percentage-of-completion percentage-of-completion
 26




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##### Table of Contents



SOP No. 81-1,
        SOP No. 97-2
  Revenue
    Recognition in Financial Statements.
  contract-by-contract
  
    whether the fees associated with our products and services are
    fixed or determinable;
    whether or not collection of our fees is reasonably assured;
    whether we have the ability to make reasonably dependable
    estimates in the application of the percentage of completion
    method; and
    whether we have vendor-specific objective evidence of fair value
    for our products and services. 27




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
    percentage of labor hours incurred to date to the estimated
    total labor hours for each contract;
    provisions for estimated losses on uncompleted
    contracts; and
    the need for an allowance for doubtful accounts or billing
    adjustments.    Recent Accounting Pronouncements.
  Results
    of Operations
    Year Ended December 31,2006


2005


2004Revenues


100.0
%


100.0
%


100.0
%Cost of revenues


49.7



41.2



36.3Gross profit


50.3



58.8



63.7Operating expenses:Sales and marketing


14.4



15.9



14.3Research and development


22.2



21.9



13.2General and administrative


16.5



17.1



13.2Impairment charges


0.7







1.0Total operating expenses


53.8



55.0



41.7(Loss) income from operations


(3.5
)


3.8



22.0Other income (expenses), net


1.9



1.7



(1.1
)Net (loss) income before income
    taxes


(1.6
)%


5.5
%


20.9
%Income taxes


0.2



0.1



0.3Net (loss) income


(1.8
)%


5.4
%


20.6
%   Comparison
    of Years Ended December 31, 2006, 2005 and
    2004
  Revenues
  Years
    Ended December 31, 2006 and 2005
     28




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Years
    Ended December 31, 2005 and 2004
      Backlog
      Cost of
    Revenues
        Operating
    Expenses
  Sales and Marketing Expenses.
 29




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Research and Development Expenses.
        General and Administrative Expenses.
       30




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Impairment Charges.
    Other
    Income (Expense), Net
        Income
    Taxes
        Liquidity
    and Capital Resources
     31




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32




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Contractual Obligations.
  Less than


1-3


3-5Total


1 Year


Years


Years


ThereafterOperating lease commitments

$
10,175


$
2,784


$
5,204


$
2,128


$
59Purchase obligations


1,686



771



913



2



Total contractual obligations

$
11,861


$
3,555


$
6,117


$
2,130


$
59     Off-Balance
    Sheet Arrangements
    Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk  Foreign
    Exchange Rate Sensitivity
      Interest
    Rate Sensitivity
  held-to-maturity. available-for-sale available-for-sale held-to-maturity
 33




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##### Table of Contents



Item 8.
    Financial
    Statements and Supplementary Data    Annual Financial Statements
  Form 10-K
  INDEX TO
    FINANCIAL STATEMENTS
  PageReport of Independent Registered
    Public Accounting Firm


F-1Consolidated Balance Sheets as of
    December 31, 2006 and 2005


F-2Consolidated Statements of
    Operations for the years ended December 31, 2006, 2005 and
    2004


F-3Consolidated Statements of
    Shareholders Equity for the years ended December 31,
    2006, 2005 and 2004


F-4Consolidated Statements of Cash
    Flows for the years ended December 31, 2006, 2005 and 2004


F-5Notes to Consolidated Financial
    Statements


F-6   2.
    Financial Statement Schedules    3.
    Selected Quarterly Results of Operations    Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures    Rule 13a-15(e))
    Rules 13a-15(f) 15d-15(f)
 34




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##### Table of Contents



Internal Control  Committee of Sponsoring
    Organizations of the Treadway Commission
           35




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##### Table of Contents



Internal Control 
    Integrated Framework issued by the Committee of Sponsoring
    Organizations of the Treadway Commission (COSO).
        Internal
    Control  Integrated Framework issued by the Committee
    of Sponsoring Organizations of the Treadway Commission
    (COSO). Internal Control  Integrated Framework issued by
    the Committee of Sponsoring Organizations of the Treadway
    Commission (COSO).
    
  
 36




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##### Table of Contents



Item 9B.
    Other
    Information   PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance  www.corillian.com www.corillian.com
    Item 11.
    Executive
    Compensation    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Shareholder Matters    Equity
    Compensation Plan Information
    Securities Authorized for IssuanceUnder Equity Compensation PlansNumber of Shares





Number of Sharesto be Issued Upon


Weighted-Average


Remaining Available forExercise of


Exercise Price of


Issuance Under EquityOutstanding Options


Outstanding Options


Compensation PlansEquity compensation plans approved
    by shareholders


5,863,737
(1)

$
3.78



1,277,137
(2)(3)Equity compensation plans not
    approved by shareholders


568,500



5.67



277,6256,432,237


$
3.95



1,554,762     (1)
    
    Excludes 390 shares of our common stock that are issuable
    upon the exercise of outstanding options that were assumed in
    connection with our acquisition of Hatcher Associates Inc., with
    a weighted average exercise price of $6.41.(2)
    
    Includes 1,177,831 shares remaining available for issuance
    under our 2000 Stock Incentive Compensation Plan. The 2000 Stock
    Incentive Compensation Plan includes an evergreen formula
    pursuant to which the number of shares authorized for grant will
    be increased annually by the lesser of
    (1) 400,000 shares, and (2) an amount equal to
    one percent of the average outstanding shares of common stock as
    of the end of the immediately preceding fiscal year on a
    fully-diluted basis; plus any shares subject to outstanding
    awards under our 1997 Stock Option Plan as of the effective date
    of the 2000 Stock Incentive Compensation Plan that cease to be
    subject to such awards other than by reason of exercise or
    payment of such awards. Excludes 400,000 additional shares of
    common stock that became available for purchase under the 2000
    Stock Incentive Compensation Plan 37




---



##### Table of Contents



on January 1, 2007 pursuant to the evergreen formula.
    Shares that remain available for purchase under our 2000 Stock
    Incentive Compensation Plan may be granted as stock options,
    stock awards, restricted stock awards or restricted stock units.  (3)
    
    Includes 99,306 shares remaining available for issuance
    under our 2000 Employee Stock Purchase Plan. The 2000 Employee
    Stock Purchase Plan includes an evergreen formula pursuant to
    which the number of shares authorized for grant will be
    increased annually by the lesser of
    (1) 333,333 shares, (2) an amount equal to two
    percent of the average number of shares of common stock
    outstanding on a fully diluted basis as of the end of our
    immediately preceding fiscal year, and (3) a lesser amount
    determined by our Board of Directors. Excludes 333,333
    additional shares of common stock that became available for
    issuance under the 2000 Employee Stock Purchase Plan on
    January 1, 2007 pursuant to the evergreen formula.  2003 Nonqualified Stock Incentive Compensation
    Plan.
           38




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##### Table of Contents



Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence    Item 14.
    Principal
    Accountant Fees and Services   39




---



##### Table of Contents



PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules    Financial Statements
    Financial Statement Schedules
    Exhibits
  Form 10-K.
 40




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##### Table of Contents



SIGNATURES
      By:
    /s/  PAUL
    K. WILDE  Chief Financial Officer
     Signature

Capacities/s/  ALEX
    P. HARTAlex
    P. Hart

Chief Executive Officer and
    DirectorPrincipal Executive Officer/s/  PAUL
    K. WILDEPaul
    K. Wilde

Chief Financial OfficerPrincipal Financial and Accounting Officer/s/  ERIC
    DUNNEric
    Dunn

Director/s/  TYREE
    B. MILLERTyree
    B. Miller

Director/s/  JAMES
    R. STOJAKJames
    R. Stojak

Director/s/  JAY
    N. WHIPPLE IIIJay
    N. Whipple III

Director  41




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##### Table of Contents



ExhibitNo.

Description2
.1

Agreement and Plan of Merger,
    dated March 31, 2005, by and among Corillian Corporation,
    InteliData Technologies Corporation and Wizard Acquisition
    Corporation (incorporated by reference to Exhibit 2.1 of
    our report on
    Form 8-K
    dated March 31, 2005)2
.2

Agreement and Plan of Merger,
    dated August 5, 2005, by and among Corillian Corporation,
    qbt Systems Inc., Quantum Acquisition Corporation, Quarry
    Acquisition LLC and the Shareholders of qbt Systems Inc.
    (incorporated by reference to Exhibit 2.1 of our report on
    Form 8-K
    dated August 5, 2005)2
.3

Agreement and Plan of Merger by
    and among CheckFree Corporation, CF Oregon Inc., and Corillian
    Corporation, dated February 13, 2007 (incorporated by
    reference to Exhibit 2 of our report on
    Form 8-K
    dated February 13, 2007)3
.1

Articles of Incorporation
    (incorporated by reference to Exhibit 3.2 of our
    Form S-1,
    as amended, File
    No. 333-95513)3
.2

Bylaws (incorporated by reference
    to Exhibit 3.4 of our
    Form S-1,
    as amended, File
    No. 333-95513)3
.3

Second Restated Bylaws of
    Corillian, as amended April 10, 2006 (incorporated by
    reference to Exhibit 3.1 of our
    Form 10-Q
    for the quarter ended March 31, 2006)4
.1

Form of Common Stock certificate
    (incorporated by reference to Exhibit 4.1 of our
    Form S-1,
    as amended, File
    No. 333-95513)10
.1*

Corillians Amended and
    Restated 2000 Stock Incentive Compensation Plan (incorporated by
    reference to Exhibit 99.2 of our
    Form S-8
    filed on November 1, 2001, File
    No. 333-72652)10
.2*

Corillians 2000 Employee
    Stock Purchase Plan (incorporated by reference to
    Exhibit 99.1 of our
    Form S-8
    filed on November 1, 2001, File
    No. 333-72652)10
.3*

Corillians Amended and
    Restated 1997 Stock Option Plan (incorporated by reference to
    Exhibit 10.3 of our report on
    Form 10-K
    for the year ended December 31, 2005)10
.4

Lease between CarrAmerica Realty
    Corporation and Corillian, dated May 22, 2000 (incorporated
    by reference to Exhibit 10.4 of our report on
    Form 10-K
    for the year ended December 31, 2005)10
.5*

Form of Stock Option Agreement
    with certain employees (incorporated by reference to
    Exhibit 10.6 of our report on
    Form 10-K
    for the year ended December 31, 2005)10
.6*

Form of Indemnification Agreement
    between Corillian and its directors and executive officers10
.7*

Form of Severance Agreement with
    Executive Officers and Certain Other Key Employees (incorporated
    by reference to Exhibit 10.1 of our report on
    Form 10-Q
    for the quarter ended June 30, 2002)10
.8*

Corillian Corporation 2003
    Nonqualified Stock Incentive Compensation Plan (incorporated by
    reference to Exhibit 10.1 of our report on
    Form 10-Q
    for the quarter ended June 30, 2003)10
.9*

Form of Stock Option Agreement
    under Corillian Corporation 2003 Nonqualified Stock Incentive
    Compensation Plan (incorporated by reference to
    Exhibit 10.2 of our report on
    Form 10-Q
    for the quarter ended June 30, 2003)10
.10*

Form of Stock Option Agreement
    with certain employees under Corillian Corporation 2003
    Nonqualified Stock Incentive Compensation Plan (incorporated by
    reference to Exhibit 10.3 of our report on
    Form 10-Q
    for the quarter ended June 30, 2003)10
.11*

Form of Amendment to Stock Option
    Letter Agreements for Certain Employees under the 2000 Stock
    Incentive Compensation Plan (incorporated by reference to
    Exhibit 10.1 of our report on
    Form 10-Q
    for the quarter ended September 30, 2003)10
.12*

Form of Severance Agreement for
    Certain Employees (incorporated by reference to
    Exhibit 10.2 of our report on
    Form 10-Q
    for the quarter ended September 30, 2003)10
.13

First Amendment to Lease Agreement
    between CarrAmerica Realty Operating Partnership, L.P. and
    Corillian Corporation, dated August 23, 2004 (incorporated
    by reference to Exhibit 99.1 of our report on
    Form 8-K
    dated August 23, 2004)10
.14*

Separation Agreement and General
    Release between Corillian Corporation and an Executive Officer,
    dated February, 17, 2005 (incorporated by reference to
    Exhibit 10.1 of our report on
    Form 8-K
    dated February 17, 2005)10
.15

Key terms of Executive
    compensation arrangements 42




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##### Table of Contents



ExhibitNo.

Description10
.16*

Key terms of Director compensation
    arrangements (incorporated by reference to Exhibit 10.20 of
    our report on
    Form 10-K
    for the year ended December 31, 2005)21
.1

Subsidiaries of Corillian
    Corporation23
.1

Consent of KPMG LLP, Independent
    Registered Public Accounting Firm31
.1

Certification Pursuant to
    18 U.S.C. Section 1350, as Adopted Pursuant to
    Section 302 of the Sarbanes-Oxley Act of 200231
.2

Certification Pursuant to
    18 U.S.C. Section 1350, as Adopted Pursuant to
    Section 302 of the Sarbanes-Oxley Act of 200232
.1

Certification Pursuant to
    18 U.S.C. Section 1350, as Adopted Pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002     *
    
    Management contract or compensatory plan 43




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##### Table of Contents



Report of
    Independent Registered Public Accounting Firm
  
        Share-Based
    Payment Considering the
    Effects of Prior Year Misstatements when Quantifying
    Misstatements in the Current Year Financial Statements.
  Internal Control 
    Integrated Framework issued by the Committee of Sponsoring
    Organizations of the Treadway Commission (COSO)
      F-1




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##### Table of Contents



CORILLIAN
    CORPORATION
  CONSOLIDATED
    BALANCE SHEETS
  December 31,2006


2005(In thousands)ASSETSCurrent assets:Cash and cash equivalents

$
17,166


$
16,722Short-term investments


8,050



8,800Accounts receivable, net


12,659



12,063Other receivables


1,112



780Revenue in excess of billings


3,474



2,387Prepaid expenses and deposits


2,151



2,527Total current assets


44,612



43,279Property and equipment, net


4,085



3,548Goodwill


26,899



26,899Intangibles, net


2,283



3,856Other assets


2,717



1,757Total assets

$
80,596


$
79,339LIABILITIES AND
    SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable

$
1,411


$
2,672Accrued liabilities


3,579



3,589Current portion of deferred revenue


14,950



14,740Capital lease obligations






3Other current liabilities


1,879



1,882Total current liabilities


21,819



22,886Deferred revenue, less current
    portion


1,299



782Other long-term liabilities


717



938Total liabilities


23,835



24,606Commitments and contingenciesShareholders equity:Common stock, no par value;
    150,000 shares authorized; 45,101 and 44,696 shares
    issued and outstanding at December 31, 2006 and 2005,
    respectively


153,517



149,447Accumulated other comprehensive
    income


46



61Accumulated deficit


(96,802
)


(94,775
)Total shareholders equity


56,761



54,733Total liabilities and
    shareholders equity

$
80,596


$
79,339    F-2




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##### Table of Contents



CORILLIAN
    CORPORATION
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
  Year Ended December 31,2006


2005


2004(In thousands, except per share data)Revenues

$
60,958


$
49,220


$
50,794Cost of revenues


30,283



20,296



18,449Gross profit


30,675



28,924



32,345Operating expenses:Sales and marketing


8,799



7,850



7,291Research and development


13,533



10,789



6,690General and administrative


10,064



8,429



6,688Impairment charges


396







491Total operating expenses


32,792



27,068



21,160(Loss) income from operations


(2,117
)


1,856



11,185Other income (expense), net:Interest income


1,136



1,003



412Interest expense


(22
)


(25
)


(140
)Loss on joint venture






(128
)


(813
)Other income (expense), net


10



8



(4
)Total other income (expense), net


1,124



858



(545
)Net (loss) income before income
    taxes


(993
)


2,714



10,640Income taxes


79



61



160Net (loss) income

$
(1,072
)

$
2,653


$
10,480Basic net (loss) income per share

$
(0.02
)

$
0.06


$
0.28Diluted net (loss) income per share

$
(0.02
)

$
0.06


$
0.26Shares used in computing basic net
    (loss) income per share


44,938



41,039



37,727Shares used in computing diluted
    net (loss) income per share


44,938



42,146



40,474    F-3




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##### Table of Contents



CORILLIAN
    CORPORATION
  CONSOLIDATED
    STATEMENTS OF SHAREHOLDERS EQUITY
  AccumulatedOtherComprehensive





TotalCommon Stock


Income


Accumulated


ShareholdersShares


Amount


(Loss)


Deficit


EquityBalance, December 31, 2003


36,891


$
127,414


$
48


$
(107,908
)

$
19,554Exercise of common stock options


1,009



1,969











1,969Issuance of common shares under
    employee stock purchase plan


508



505











505Income tax benefit of equity
    transactions






81











81Foreign currency translation










13







13Net income














10,480



10,480Balance, December 31, 2004


38,408


$
129,969


$
61


$
(97,428
)

$
32,602Issuance of common stock in
    InteliData acquisition, net of registration costs


4,917



16,309











16,309Issuance of common stock in qbt
    acquisition


643



2,059











2,059Exercise of common stock options


334



470











470Issuance of common shares under
    employee stock purchase plan


394



620











620Income tax benefit of equity
    transactions






20











20Net income














2,653



2,653Balance, December 31, 2005


44,696


$
149,447


$
61


$
(94,775
)

$
54,733Cumulative adjustment under
    SAB 108






955







(955
)


Exercise of common stock options


169



197











197Issuance of common shares under
    employee stock purchase plan


233



595











595Issuance of common stock in qbt
    acquisition


3



9











9Stock-based compensation expense
    under FAS 123R






2,266











2,266Excess tax benefits from
    stock-based transactions






8











8Deferred costs related to employee
    stock-based compensation






40











40Foreign currency translation










(15
)






(15
)Net loss














(1,072
)


(1,072
)Balance, December 31, 2006


45,101


$
153,517


$
46


$
(96,802
)

$
56,761    F-4




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##### Table of Contents



CORILLIAN
    CORPORATION
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
  Year Ended December 31,2006


2005


2004(In thousands)Cash flows from operating
    activities:Net (loss) income

$
(1,072
)

$
2,653


$
10,480Adjustments to reconcile net (loss)
    income to net cash provided by (used in) operating activities:Depreciation


1,924



1,534



2,200Stock-based compensation expense


2,266







Amortization of intangible assets


1,573



644



Impairment charges


396







491Equity losses in joint venture






128



813Recovery of bad debts






(41
)


(199
)Loss (gain) on sale of assets


9



(8
)


(7
)Income tax benefit of equity
    transactions






20



81Excess tax benefits from
    stock-based compensation


(8
)






Changes in operating assets and
    liabilities, net of assets acquired and liabilities assumed
    (see Note 8)Accounts receivable


(596
)


(2,419
)


(1,925
)Other receivables


(332
)


(326
)


20Revenue in excess of billings


(1,087
)


(616
)


(105
)Prepaid expenses, deposits and
    other assets


(544
)


(899
)


(523
)Accounts payable and accrued
    liabilities


(1,288
)


(4,463
)


190Deferred revenue, current and
    long-term


727



(1,697
)


1,070Other liabilities


(473
)


550



(159
)Net cash provided by (used in)
    operating activities


1,495



(4,940
)


12,427Cash flows from investing
    activities:Purchase of property and equipment


(2,583
)


(1,095
)


(728
)Proceeds from sale of property and
    equipment






8



9Purchase of
    available-for-sale
    investments


(3,200
)


(8,250
)


(19,000
)Proceeds from the sales of
    available-for-sale
    investments


3,950



9,600



18,150Purchase of
    held-to-maturity
    investments










(1,200
)Proceeds from the maturities of
    held-to-maturity
    investments










1,801Cash paid for acquisition of
    InteliData, net of cash acquired






(4,509
)


Cash paid for acquisition of qbt,
    net of cash acquired






(3,150
)


Net cash used in investing
    activities


(1,833
)


(7,396
)


(968
)Cash flows from financing
    activities:Proceeds from the issuance of
    common stock


792



1,090



2,474Registration costs associated with
    shares issued in business combinations






(309
)


Payments on line of credit
    borrowings






(911
)


(1,662
)Principal payments on capital lease
    obligations


(3
)


(11
)


(17
)Excess tax benefits from
    stock-based compensation


8







Net cash provided by (used in)
    financing activities


797



(141
)


795Effect of exchange rate
    fluctuations on cash and cash equivalents


(15
)


(1
)


3Increase (decrease) in cash and
    cash equivalents


444



(12,478
)


12,257Cash and cash equivalents at
    beginning of year


16,722



29,200



16,943Cash and cash equivalents at end of
    year

$
17,166


$
16,722


$
29,200Supplemental disclosures of cash
    flow information:Cash paid during the period for:Interest

$
22


$
25


$
140Taxes


70



113



97Supplemental disclosures of
    non-cash investing and financing activities:Common stock issued in InteliData
    acquisition

$



$
16,618


$
Common stock issued in qbt
    acquisition


9



2,059



Deferred costs related to employee
    stock-based compensation


40







    F-5




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##### Table of Contents



CORILLIAN
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  (1)  Description
    of Company
    (2)  Summary
    of Significant Accounting Policies
  Use of
    Estimates
    Principles
    of Consolidation
    Revenue
    Recognition
  No. 97-2, Software Revenue Recognition SOP No. 98-9, Modification of
    SOP No. 97-2,
    Software Revenue Recognition, with Respect to Certain
    Transactions percentage-of-completion SOP No. 81-1, Accounting for Performance of Construction-Type and Certain
    Production-Type Contracts 00-3, Application of AICPA Statement of Position
    97-2 to
    Arrangements that Include the Right to Use Software Stored on
    Another Entitys Hardware
 F-6




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##### Table of Contents



CORILLIAN
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     percentage-of-completion percentage-of-completion
  SOP No. 81-1,
        SOP No. 97-2
   F-7




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##### Table of Contents



CORILLIAN
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Cash
    and Cash Equivalents
    Short-Term
    Investments
  held-to-maturity, held-to-maturity available-for-sale
  other-than-temporary other-than-temporary, held-to-maturity available-for-sale
  held-to-maturity available-for-sale
  Goodwill
  Goodwill and Other Intangible Assets.
  Long-Lived
    Assets Including Finite-Lived Purchased Intangible
    Assets
    Accounting
    for the Impairment or Disposal of
 F-8




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##### Table of Contents



CORILLIAN
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Long-Lived Assets.
  Investment
    in Joint Venture
  03-16, Accounting for Investments in Limited Liability
    Companies
  e-Banc, e-Banc
    Accounts
    Receivable
   F-9




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##### Table of Contents



CORILLIAN
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     2006


2005


2004Beginning allowance balance

$
100


$
101


$
101(Recovery) provision






(41
)


(199
)Charge-offs






40



199Ending allowance balance

$
100


$
100


$
101   Property
    and Equipment
    Research
    and Development
    Capitalized
    Software
  Accounting for the
    Costs of Computer Software to be Sold, Leased or Otherwise
    Marketed.
    SOP No. 98-1, Accounting for the Costs of Computer Software Developed or
    Obtained for Internal Use.
  Concentration
    of Business and Credit Risk
   F-10




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##### Table of Contents



CORILLIAN
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
         Risk
    of Technological Change
    Stock-Based
    Compensation
  Share-Based Payment Accounting for Stock Issued to Employees
     F-11




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##### Table of Contents



CORILLIAN
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Accounting for Stock-Based Compensation
        Net
    (Loss) Income Per Share
    Earnings per Share in-the-money
 F-12




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##### Table of Contents



CORILLIAN
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Comprehensive
    Income (Loss)
  Reporting on Comprehensive
    Income.
  Income
    Taxes
  Accounting for Income
    Taxes.
  Fair
    Value of Financial Instruments
    Reclassifications
    Recent
    Accounting Pronouncements
  Accounting for Uncertainty in Income
    Taxes, an interpretation of FASB Statement
    No. 109. Accounting for Income
    Taxes.
  Fair Value Measurements
 F-13




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##### Table of Contents



CORILLIAN
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Considering the Effects of Prior Year
    Misstatements When Quantifying Misstatements in Current Year
    Financial Statements
    
    Certain stock option grants had measurement dates that differed
    from the recorded grant dates, primarily where the grantee began
    employment services shortly after the grant authorization date
    and therefore the correct measurement date would be the date of
    commencement of employment. Corillian identified 13 option
    grants that resulted in a measurement date that had a higher
    stock price than the recorded grant date and 24 option grants
    that resulted in a measurement date that had a stock price
    either equal to or lower than the recorded grant date. These
    grants were primarily issued from 2000 to 2003.
    Management noted two option grants in 1999 to members of the
    Companys board of directors who subsequently left the
    board to serve the Company on an advisory board as consultants.
    One of the individuals subsequently transitioned from the
    advisory board to a full-time employee of the Company. The
    Company did not appropriately account for the change in status
    from a non-employee director to a non-employee or from
    non-employee to employee.
    Management noted one option grant in 1999 to a full-time
    consultant who served as a contractor for three months prior to
    becoming an employee. The Company did not appropriately account
    for this award as a non-employee award and did not account the
    change in status from non-employee to employee.        1999


2000


2001


2002


2003


2004


2005


TotalMeasurement date

$
25


$
61


$
60


$
23


$
72


$
70


$
(35
)

$
276Non-employee and change in status


60



420



146



53















679Total stock-based compensation
    expense


85



481



206



76



72



70



(35
)

$
955Net (loss) income

$
(10,096
)

$
(33,355
)

$
(49,301
)

$
(17,257
)

$
5,126


$
10,480


$
2,653% of net (loss) income


0.8
%


1.4
%


0.4
%


0.4
%


1.4
%


0.7
%


1.3
%  F-14




---



##### Table of Contents



CORILLIAN
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  (3)  Balance
    Sheet Components
  Cash,
    cash equivalents and short-term investments
    December 31,2006


2005(In thousands)Cash and cash equivalents:Cash and money market funds

$
9,056


$
10,744Investments, original maturities
    less than 90 days


8,110



5,978Total cash and cash equivalents

$
17,166


$
16,722Available-for-sale
    investments:Auction rate debt securities

$
8,050


$
8,800   available-for-sale available-for-sale
    Property
    and Equipment, Net
    2006


2005(In thousands)Computer equipment and software

$
15,392


$
13,076Furniture, fixtures and other
    equipment


2,568



2,758Leasehold improvements


3,584



3,85021,544



19,684Less accumulated depreciation and
    amortization


(17,459
)


(16,136
)$
4,085


$
3,548    F-15




---



##### Table of Contents



CORILLIAN
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Accrued
    Liabilities
    2006


2005(In thousands)Payroll and payroll-related
    expenses

$
2,294


$
2,337Other accrued liabilities


1,285



1,252$
3,579


$
3,589   (4)  Income
    Taxes
    2006


2005


2004(In thousands)Domestic

$
(1,436
)

$
2,192


$
9,942Foreign


443



522



698$
(993
)

$
2,714


$
10,640       2006


2005


2004Federal statutory rate


(34.0
)%


34.0
%


34.0
%Changes resulting from:Net operating loss tax benefits
    (realized) not realized


20.5



(31.4
)


(31.9
)Impact of FAS 123(R)
    stock-based compensation expense


18.2







Other


3.3



(0.4
)


(0.6
)8.0
%


2.2
%


1.5
%  F-16




---



##### Table of Contents



CORILLIAN
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2006


2005(In thousands)Deferred tax assets:Research and experimentation
    credit carryforwards

$
3,778


$
3,503Accrued expenses and allowances


657



765Deferred compensation


72



101Domestic net operating loss
    carryforwards


25,035



23,900Foreign net operating loss
    carryforwards


2,390



2,479Goodwill and intangibles


1,023



1,161Depreciable assets


1,140



1,074Alternative minimum tax credit
    carryforwards


317



254Impairment charges


146



Deferred revenue


498



Stock-based compensation


666



Total gross deferred tax asset


35,722



33,237Less valuation allowance


(34,782
)


(31,722
)Total deferred tax assets


940



1,515Deferred tax liabilities:Intangibles


897



1,485Prepaid expenses


43



30Total gross deferred tax
    liabilities


940



1,515Net deferred tax assets

$



$
          F-17




---



##### Table of Contents



CORILLIAN
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      (5)  Net
    (Loss) Income per Share
    Year Ended December 31,2006


2005


2004Net (loss) income(1)

$
(1,072
)

$
2,653


$
10,480Shares for basic net income per
    share:Weighted-average common shares


44,938



41,039



37,727Effect of dilutive securities:Stock options and employee stock
    purchase plan






1,107



2,747Shares for diluted net income per
    share


44,938



42,146



40,474Net (loss) income per
    share  basic

$
(0.02
)

$
0.06


$
0.28Net(loss) income per
    share  diluted

$
(0.02
)

$
0.06


$
0.26     (1)
    
    Net income (loss) for the year ended December 31, 2006
    included stock-based compensation expense under FAS 123(R)
    of approximately $2.3 million. There was no stock-based
    compensation expense related to employee stock options and
    employee stock purchases under the ESPP in accordance with
    FAS 123 for the years ended December 31, 2005 and 2004
    because the Company did not adopt the recognition provisions of
    FAS 123. See Note 6 for additional information.    (6)  Employee
    Stock Benefit Plans
  2000
    Employee Stock Purchase Plan
    24-month
 F-18




---



##### Table of Contents



CORILLIAN
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      1997,
    2000 and 2003 Stock Option Plans
  Stock
    Option Program Description
         F-19




---



##### Table of Contents



CORILLIAN
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   General
    Option Information
    ExerciseNumber of


Price perShares


ShareOutstanding at December 31,
    2003


6,602,248


$
3.51Granted


565,999



4.93Exercised


(1,009,226
)


1.95Canceled/forfeited/expired


(763,516
)


3.11Outstanding at December 31,
    2004


5,395,505



4.01Granted


1,856,250



3.09Exercised


(333,958
)


1.41Canceled/forfeited/expired


(542,468
)


3.42Outstanding at December 31,
    2005


6,375,329



3.94Granted


606,500



3.30Exercised


(168,998
)


1.17Canceled/forfeited/expired


(380,204
)


4.54Outstanding at December 31,
    2006


6,432,627


$
3.95       Options Outstanding


Options ExercisableWeighted-


Weighted-








Weighted-Average


Average








AverageRemaining


Exercise


Aggregate





Exercise


AggregateNumber


Contractual


Price per


Intrinsic


Number


Price per


IntrinsicRange of Exercise Prices

Outstanding


Life (in Years)


Share


Value


Exercisable


Share


Value$0.68-$2.71


971,745



6.25


$
1.09


$
2,604,277



811,872


$
1.07


$
2,192,054$2.75-$2.87


918,583



7.14



2.85


$
845,096



562,396



2.85


$
517,404$2.88-$3.00


1,507,375



7.38



2.97


$
1,205,900



922,251



2.99


$
719,356$3.01-$3.32


695,042



8.26



3.18


$
410,075



258,484



3.18


$
152,506$3.33-$3.77


842,168



6.84



3.55


$
185,277



404,722



3.63


$
56,661$3.78-$6.08


916,922



7.12



5.34







814,082



5.46



$6.40-$19.50


580,792



3.83



12.30







580,790



12.30



Total


6,432,627



6.84


$
3.95


$
5,250,625



4,354,597


$
4.39


$
3,637,981   in-the-money
 F-20




---



##### Table of Contents



CORILLIAN
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Valuation
    and Expense Information under FAS 123(R)
    Cost of revenues

$
469Sales and marketing


447Research and development


479General and administrative


871Total stock-based compensation
    expense

$
2,266       As Reported


If ReportedFollowing FAS 123(R)


Following APB 25(Loss) income from operations

$
(2,117
)

$
149Net (loss) income

$
(1,072
)

$
1,194Basic and diluted net (loss)
    income per share

$
(0.02
)

$
0.03     December 31,2005


2004Net income, as reported

$
2,653


$
10,480Deduct: Stock-based compensation
    expense determined under fair value value based method for all
    awards


(4,138
)


(2,980
)Pro forma net (loss) income

$
(1,485
)

$
7,500Basic net income per
    share  as reported

$
0.06


$
0.28Basic net (loss) income per
    share  pro forma

$
(0.04
)

$
0.20Diluted net income per
    share  as reported

$
0.06


$
0.26Diluted net (loss) income per
    share  pro forma

$
(0.04
)

$
0.19      F-21




---



##### Table of Contents



CORILLIAN
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Year Ended December 31,2006


2005


2004Weighted average fair value of
    grants

$
2.08


$
1.86


$
3.06Expected volatility


74
%


79
%


84
%Risk-free interest rate


4.8
%


4.1
%


3.4
%Expected dividends


0
%


0
%


0
%Expected life (in years)


4.8



4.0



3.9     Year Ended December 31,2006


2005


2004Weighted average fair value of
    grants

$
0.96


$
1.25


$
2.29Expected volatility


35%-47%



46%-75%



66%-106%Risk-free interest rate


5.0%-5.2%



3.5%-3.9%



0.99%-2.64%Expected dividends


0%



0%



0%Expected life (in years)


0.5-2.0



0.5-2.0



0.5-2.0       Accuracy
    of Fair Value Estimates
   F-22




---



##### Table of Contents



CORILLIAN
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   (7)  Commitments
    and Contingencies
  401(k)
    Plan
    Lease
    Obligations
    Year Ended December 31,2006


2005Computer and other equipment

$
34


$
34Less accumulated depreciation


(34
)


(34
)$



$
       Year ending December 31:2007

$
2,7842008


2,5892009


2,6152010


1,9692011 and thereafter


218Total minimum lease payments

$
10,175    F-23




---



##### Table of Contents



CORILLIAN
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Year ending December 31:2007

$
7712008


6582009


2552010


22011


Total vendor commitments

$
1,686     Environmental
    liability
  clean-up
  2006


2005(In thousands)Receivable due from insurance
    provider, current

$
852


$
589Receivable due from insurance
    provider, long-term


197



283Total receivables due from
    insurance provider

$
1,049


$
872Estimated undiscounted future
    liability, current

$
441


$
280Estimated undiscounted future
    liability, long-term


226



292Total estimated undiscounted
    future liability

$
667


$
572   SOP 96-1, Environmental Remediation Liabilities, Business Combinations. clean-up
   F-24




---



##### Table of Contents



CORILLIAN
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Line
    of credit
        Indemnification
  Accounting for Contingencies.
  (8)  Acquisitions
  InteliData
    Acquisition
    two-day
 F-25




---



##### Table of Contents



CORILLIAN
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Cash paid

$
4,301Stock issued


16,618Merger related transaction costs


242Total purchase price

$
21,161     Cash and cash equivalents

$
34Accounts receivable


1,325Unbilled accounts receivable


335Prepaid expense and other current
    assets


729Property plant and equipment


166Intangible assets


3,200Goodwill(1)


21,892Other long-term assets


458Accounts payable and accrued
    liabilities(2)


(6,197
)Deferred revenue(3)


(489
)Other long-term liabilities


(292
)Total purchase price

$
21,161     (1)
    
    No amounts of goodwill are expected to be deductible for tax
    purposes.(2)
    
    Includes $1.4 million of accrued employee termination costs
    pursuant to
    EITF 95-03,
    Recognition of Liabilities in a Purchase Business
    Combination. All amounts were paid as of December 31,
    2005.(3)
    
    The fair value of deferred revenue represents an amount
    equivalent to the estimated cost to fulfill the maintenance
    obligations assumed associated with bug fixes and phone support
    plus an appropriate profit margin.      Useful Life


Estimated Fair


Accumulated(In years)


Value


Amortization


NetDeveloped Technology


3


$
2,300


$
(1,049
)

$
1,251Bank Customer Relationships


6



900



(205
)


695$
3,200


$
(1,254
)

$
1,946  F-26




---



##### Table of Contents



CORILLIAN
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2006


2005Cost of revenues

$
767


$
282Sales and marketing


150



55Total

$
917


$
337     Fiscal Year

Amount(In thousands)2007

$
9172008


6342009


1502010


1502011


95Total

$
1,946     qbt
    Systems, Inc.
        Cash paid

$
3,160Stock consideration


2,059Merger related transaction costs


131Liabilities assumed


38Total purchase price

$
5,388  F-27




---



##### Table of Contents



CORILLIAN
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Cash and cash equivalents

$
141Accounts receivable


59Employee and other receivable


240Unbilled accounts receivable


73Property, plant, and equipment


21Intangible assets


1,300Goodwill(1)


5,007Other assets


2Accounts payable and accrued
    liabilities


(1,080
)Note Payable


(100
)Deferred revenue(2)


(100
)Long-term note payable


(175
)Total purchase price

$
5,388     (1)
    
    $640,000 of goodwill is expected to be deductible for tax
    purposes.(2)
    
    The fair value of deferred revenue represents an amount
    equivalent to the estimated cost to fulfill the maintenance
    obligations assumed plus an appropriate profit margin.      Useful Life


Estimated Fair


Accumulated(In Years)


Value


Amortization


NetDeveloped Technology


2


$
900


$
(628
)

$
272Backlog


1



300



(300
)


Customer Relationships


4



100



(35
)


65$
1,300


$
(963
)

$
337     2006


2005Cost of revenues

$
631


$
297Sales and marketing


25



10Total

$
656


$
307  F-28




---



##### Table of Contents



CORILLIAN
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Fiscal Year

Amount(In thousands)2007

$
2962008


252009


16Total

$
337     sub-license
  (9)  Segment
    Information
  Disclosures about Segments of an Enterprise and Related
    Information
  Geographic
    Information
    Year Ended December 31,2006


2005


2004(In thousands)Revenues from:United States

$
57,759


$
47,408


$
49,742All foreign countries


3,199



1,812



1,052$
60,958


$
49,220


$
50,794  F-29




---



##### Table of Contents



CORILLIAN
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Major
    Customers
    Year Ended December 31,2006


2005


2004(In thousands)Customer A

$
8,111


$



$
Customer B






5,056



9,739Customer C










5,160   Revenues
      Year Ended December 31,2006


2005


2004(In thousands)License and professional services

$
39,517


$
32,781


$
35,803Post-contractual support


17,762



13,089



11,352Hosting


3,679



3,350



3,639$
60,958


$
49,220


$
50,794   (10)  Impairment
    Charges
  Accounting for Costs
    Associated with Exit or Disposal Activities Accounting for the Impairment or Disposal of
    Long-Lived Assets
  Accounting for Costs Associated with Exit or Disposal
    Activities Accounting for
    the Impairment or Disposal of Long-Lived Assets
  (11)  Related
    Party Transactions
   F-30




---



##### Table of Contents



CORILLIAN
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    (12)  Quarterly
    Financial Information  Unaudited
    Quarter Ended 2006March 31


June 30


September 30


December 31Total Revenues

$
14,273


$
14,625


$
15,567


$
16,493Gross Profit


7,306



6,001



8,246



9,122(Loss) income from operations


(1,219
)


(1,743
)


310



535
(1)Net (loss) income


(971
)


(1,470
)


590



779Basic net (loss) income per share


(0.02
)


(0.03
)


0.01



0.02Diluted net (loss) income per share


(0.02
)


(0.03
)


0.01



0.02   Quarter Ended 2005March 31


June 30


September 30


December 31Total Revenues

$
11,236


$
12,287


$
11,937


$
13,760Gross Profit


6,877



8,136



6,626



7,285Income (loss) from operations


572



1,868



(308
)


(276
)Net income (loss)


654



2,098



(60
)


(39
)Basic net income (loss) per share


0.02



0.05



(0.00
)


(0.00
)Diluted net income (loss) per share


0.02



0.05



(0.00
)


(0.00
)     (1)
    
    The Company recorded an impairment charge of approximately $396
    during the quarter ended December 31, 2006.    (13)  Subsequent
    Event
     F-31