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UNITED STATES SECURITIES AND EXCHANGE
COMMISSION

Washington, D.C. 20549




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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,
	2001

Commission file number 0-29291



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Corillian Corporation

(Exact name of registrant as specified in its
charter)


|                                                                |  |                                         
|--------------------------------------------------------------- |  | ----------------------------------------
|Oregon                                                          |  | 91-1795219                              
|(State or other Jurisdiction of
	Incorporation or Organization) |  | (I.R.S. Employer
	Identification Number)
|                                                               
|3400 NW John Olsen Place Hillsboro,
	Oregon                     |  | 97124                                   
|(Address of principal executive
	offices)                       |  | (Zip Code)                              

(503) 629-3300

(Telephone number)


Securities registered pursuant to
Section 12(b) of the Act: None

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

Common Stock, no par value


(Title of class)


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

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

The aggregate market value of the voting and
nonvoting common stock held by non-affiliates as of
March 18, 2002 was $57,135,334 based on the closing price
of the Common Stock as reported on the Nasdaq Stock Market for
that date. There were 35,239,057 shares of the
Registrants Common Stock issued outstanding on
March 18, 2002.

DOCUMENTS INCORPORATED BY REFERENCE

The information required by Part III of this
Report, to the extent not set forth herein, is incorporated
herein by reference from the Registrants definitive proxy
statement relating to the annual meeting of shareholders to be
held on May 8, 2002, which definitive proxy statement shall
be filed with the Securities and Exchange Commission within
120 days after the end of the fiscal year to which this
Report relates.



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TABLE OF CONTENTS



|                  |                                                                                               |                                       |  |  |  |  |  | 
|----------------- | --------------------------------------------------------------------------------------------- | ------------------------------------- |  |  |  |  |  | 
|PART I           
|                  | Item 1. Business                                                                             
|                  | Item 2. Properties                                                                           
|                  | Item 3. Legal Proceedings                                                                    
|                  | Item 4. Submission of Matters to a Vote of Security Holders                                  
|PART II          
|                  | Item 5. Market for the Registrants Common Stock and Related Shareholder Matters             
|                  | Item 6. Selected Financial Data                                                              
|                  | Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                  | Item 7A. Quantitative and Qualitative Disclosure About Market Risk                           
|                  | Item 8. Financial Statements and Supplementary Data                                          
|                  | Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 
|PART III         
|                  | Item 10. Directors and Executive Officers of the Registrant                                  
|                  | Item 11. Executive Compensation                                                              
|                  | Item 12. Security Ownership of Certain Beneficial Owners and Management                      
|                  | Item 13. Certain Relationships and Related Transactions                                      
|PART IV          
|                  | Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K                    
|SIGNATURES       
|                  |                                                                                               | CONSOLIDATED BALANCE SHEETS          
|                  |                                                                                               | CONSOLIDATED STATEMENTS OF OPERATIONS
|INDEX TO EXHIBITS
|EXHIBIT 10.9     
|Exhibit 23.1     



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FORM 10-K

TABLE OF CONTENTS

|         |  |                                                                                        |  |      |    | 
|-------- |  | -------------------------------------------------------------------------------------- |  | ---- | -- | 
|         |  |                                                                                        |  | Page
|         |  |                                                                                        |  |     
|PART I  
|Item 1.  |  | Business                                                                               |  |      | 2  | 
|Item 2.  |  | Properties                                                                             |  |      | 20 | 
|Item 3.  |  | Legal Proceedings                                                                      |  |      | 20 | 
|Item 4.  |  | Submission of Matters to a Vote of Security
	Holders                                   |  |      | 20 | 
|        
|PART II 
|Item 5.  |  | Market for the Registrants Common Stock and
	Related Shareholder Matters              |  |      | 21 | 
|Item 6.  |  | Selected Financial Data                                                                |  |      | 22 | 
|Item 7.  |  | Managements Discussion and Analysis of
	Financial Condition and Results of Operations |  |      | 23 | 
|Item 7A. |  | Quantitative and Qualitative Disclosure About
	Market Risk                             |  |      | 31 | 
|Item 8.  |  | Financial Statements and Supplementary Data                                            |  |      | 32 | 
|Item 9.  |  | Changes in and Disagreements With Accountants on
	Accounting and Financial Disclosure  |  |      | 32 | 
|        
|PART III
|Item 10. |  | Directors and Executive Officers of the Registrant                                     |  |      | 32 | 
|Item 11. |  | Executive Compensation                                                                 |  |      | 32 | 
|Item 12. |  | Security Ownership of Certain Beneficial Owners
	and Management                        |  |      | 33 | 
|Item 13. |  | Certain Relationships and Related Transactions                                         |  |      | 33 | 
|        
|PART IV 
|Item 14. |  | Financial Statements, Financial Statement
	Schedules, Exhibits and Reports on Form 8-K |  |      | 33 | 

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PART I




Item 1.     Business

Overview

We are a leading provider of solutions that
enable banks, brokers, financial portals and other financial
service providers to rapidly deploy Internet-based financial
services. Our solutions allow consumers to conduct financial
transactions, view personal and market financial information,
pay bills and access other financial services on the Internet.
Corillian Voyager is a software platform combined with a set of
applications for Internet banking, electronic bill presentment
and payment, targeted marketing, data aggregation, web content
management and online customer relationship management. Our
Corillian Voyager Standard Edition (SE) is a hosted
Internet banking solution tailored to the specific needs of
small to mid-sized financial institutions looking for the same
scalability and reliability of Corillian Voyager in a more
rapidly deployable, economical solution. Our solutions integrate
into existing database applications and systems and enable our
customers to monitor transactions across all systems in real
time. Our solutions are also designed to scale to support
millions of users. Our current Corillian Voyager customers
include Chase Manhattan Bank, Bank One, Wachovia Bank and
SunTrust Bank.

Industry Background

The Internet has become an integral part of the
daily lives of millions of consumers because of the
functionality and convenience it offers. In addition to more
traditional uses such as email, the Internet is being used
increasingly to conduct financial transactions and deliver
financial services. Internet users are increasingly demanding
Internet-based financial services, such as access to financial
information over the Internet, real-time access to stock quotes
and investment portfolio information, and Internet bill payment
services. The benefits that consumers derive from Internet-based
financial services include:



| |   |                                                                                           
| | - | ------------------------------------------------------------------------------------------
| |  | 24 hour, real-time access to information and
	financial services from any Internet device;
|
| |  | convenient and inexpensive bill presentment and
	payment tools;                           
|
| |  | improved personal finance management; and                                                 
|
| |  | the presentation of comprehensive, consolidated
	financial data.                          

As a result of these benefits, personal finance
content is one of the most popular content categories on the
Internet.

The growth in Internet usage and the popularity
of personal finance content have changed the competitive
landscape of the financial service industry by attracting new
competitors that face lower barriers to entry. Examples of these
are Internet brokerages and portals, such as E*Trade, Schwab,
AOL, Quicken.com, MSN and Yahoo!, that have established Internet
sites that offer consumers real-time access to personalized
financial information. We believe these new competitors within
the financial service industry will need to enhance and expand
their Internet-based financial services to attract new customers
and retain and capture greater attention from their existing
customers.

Within this environment, we believe many
traditional financial institutions, such as banks, insurance
companies and full-service brokerages, risk losing customers if
they do not use the Internet to offer Internet-based financial
services. Financial institutions, especially banks, have
traditionally adopted technologies that have allowed them to
create closer, more profitable relationships with their
customers. With the rise of the Internet, many financial
institutions are recognizing they will require more
cost-effective Internet-based financial solutions with greater
functionality to help them differentiate their service and
product offerings and expand their market share.

Traditional financial institutions, online
brokerages, Internet portals and other Internet financial
service providers are competing to become full-service financial
portals that offer consumers a simple, one-stop site

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for all of their financial needs. To offer
competitive Internet-based financial products and services on
their Internet sites, we believe these competitors will need to
deploy comprehensive Internet finance solutions.


Significant challenges are involved in deploying
Internet finance solutions. Most notably, multiple heterogeneous
computing environments, including existing systems, packaged
applications, Internet application servers and other emerging
technologies, must be integrated and must be able to communicate
with each other to provide customers with real-time data and to
allow them to conduct financial transactions. In addition,
external systems, such as those of credit card companies and
bill payment providers, must be integrated with internal systems
in a secure and reliable manner. These technical challenges are
magnified by the speed with which these services must be brought
to market. Most financial institutions do not have the technical
skills or resources to rapidly design and deploy these services.
In addition, although some online brokers and financial portals
have the technical skills and resources to develop and deploy
Internet finance solutions, they are subject to significant
time-to-market competitive pressures and seek to maintain their
focus on their core competencies. For most of these financial
service providers, internally developing and deploying Internet
finance solutions can be expensive and take in excess of one
year. As a result, many of these financial service providers are
realizing that if they want to deploy an Internet-based
financial product or service more quickly and efficiently, they
need a comprehensive, outsourced packaged software and service
solution.

The Corillian Solution

We are a leading provider of solutions that
enable financial service providers to deploy Internet-based
financial services. Our solutions include a comprehensive suite
of software and a hosted service, both of which are combined
with our professional services to form a complete outsourced
solution for offering Internet-based financial services.

Corillian Voyager consists of a software platform
and a menu of applications built upon that platform, all of
which we can provide on a hosted basis or which can run on our
customers premises. Corillian Voyager integrates with our
customers existing databases and systems and enables them
to monitor transactions across all systems in real time. We have
developed software applications for Internet banking, electronic
bill presentment and payment, targeted marketing, data
aggregation, web content management and online customer
relationship management. We can provide our customers with
wireless delivery capabilities for all of these applications.

Corillian Voyager SE is a hosted Internet
banking solution tailored to the specific needs of small to
mid-sized financial institutions looking for the same
scalability and reliability as Corillian Voyager in a more
rapidly deployable, economical solution. Voyager SE
services include Internet banking, bill payment, the complete
integration of the Open Financial Exchange (OFX) data
standard, online customer relationship management, targeted
marketing and web content management. Voyager SE can be
connected to a variety of host systems in as little as 60 to
90 days and involves less customization than the Corillian
Voyager platform. Voyager SE is hosted in Corillians
state-of-the-art data center in Oregon.

We believe our products and services provide the
following benefits to our customers:

Accelerated Time to
Market.Using the Corillian Voyager
platform or Corillian Voyager SE, financial institutions
can deploy Internet-based financial services to their customers
within as little as 60 to 90 days, depending on the
complexity of the project and the degree of customization
involved with the project. In addition, we provide comprehensive
systems integration and implementation services and customer
support to complement the flexible architecture of our solutions.

Highly Scalable and Extensible
Platform.Our software platform has
been designed to be highly scalable to meet the evolving needs
of our customers. Independent laboratory test results indicate
that Corillian Voyager can support Internet banking programs for
more than 3.5 million users. In addition, Corillian Voyager
has been designed using universal standards, including
eXtensible Markup Language for communication, Open Financial
Exchange for financial transactions, and Microsofts
Distributed interNet Applications Architecture for Financial
Services for interoperability. This architecture enables our
customers

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to deploy new Internet-based financial services
by adding applications to our platform at any time and by
integrating future applications to any Internet-connected
point-of-presence.


Flexibility and
Control.We offer our customers the
option of hosting the Corillian Voyager platform on their own
premises or having Corillian Voyager hosted in our managed
facility. Our customers may request that we host their Corillian
Voyager deployment because they lack sufficient resources or the
appropriate systems to host Voyager on their premises. In
addition, our customers can reduce their information technology
costs by outsourcing application hosting services with us. We
offer customers the opportunity to transfer operation of
Corillian Voyager to their own premises at any time. Corillian
Voyager SE is hosted in our state-of-the-art data center,
but each financial institution has the option of migrating the
software to its own premises at any time. This flexibility
provides our customers with the option to gain operational
control of a Corillian Voyager SE deployment over time as
their needs and desires change.

Advanced Technology and Continued
Innovation.We believe our solutions
provide the only comprehensive solution with a broad range of
retail applications that can be delivered on the desktop or by
wireless access. We offer certified Internet financial
applications using the Open Financial Exchange data standard,
and we have helped to define industry standards such as
Microsofts Distributed interNet Applications Architecture
for Financial Services.

Reduced Cost of Internet
Operations.Our products lower the
costs associated with our customers Internet operations
primarily by reducing the cost of internal development. Our
software solutions provide all of the functionality for
Internet-based financial services in a single comprehensive
package. This eliminates the cost of purchasing, integrating and
installing separate solution components from multiple vendors.

Strategy

Our objective is to be the leading global
provider of Internet finance solutions to both traditional and
emerging Internet financial service providers. To that end, we
seek to establish Corillian Voyager and Corillian
Voyager SE as the platforms of choice for Internet finance.
To achieve this objective, we intend to pursue the following
strategies:

Increase Market
Share.To date, we have focused our
sales and marketing efforts to target the largest financial
service providers. We intend to continue targeting large,
industry-leading financial service providers by increasing our
sales and marketing efforts. We have developed other markets,
including small to mid-size financial institutions, insurance
companies and brokerages, and we intend to continue to focus our
efforts on expanding our penetration of these markets with
products and services like Corillian Voyager SE.

Expand Breadth of Product and Service
Offerings.Our current financial
applications include features for Internet banking, electronic
bill presentment and payment, interfacing with personal finance
managers through the Open Financial Exchange data standard,
small business banking, data aggregation, online customer
relationship management, web content management and access to
wireless devices like the Palm VII. We intend to expand our
product offerings to include new features, such as wealth
management.

Leverage and Expand Strategic
Relationships.We intend to leverage
our relationships with leading systems integrators and
value-added resellers to extend our reach and provide our
customers with more comprehensive, customized solutions. We
intend to continue to expand and build additional relationships
with value-added resellers. In addition, we believe that forging
relationships with key technology vendors is critical to
delivering a comprehensive solution to financial service
providers. Our strategic partners include Microsoft, Compaq,
Unisys and NCR Corporation. We intend to develop additional
relationships to expand the scope of our functionality, and for
co-marketing and distribution purposes.

Increase International
Sales.As the Internet adoption rate
accelerates internationally, we believe international financial
services will rapidly follow the transformation seen in the
United States. We believe significant international market
demand will exist for Internet finance solutions as financial
institutions in Europe and Asia, in particular, move to deliver
services on the Internet. In 2000, we opened an office in
London, England, to serve as the headquarters for our
international expansion and signed our first European customer,
Eurobank. In 2001, we opened an office in Kuala Lumpur, Malaysia
and signed three of the top five

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banks in Malaysia. We intend to continue to
leverage our assets internationally, both through direct sales
channels and indirect sales partners.


Collaborate with Technology
Leaders.Our products and services
adhere to existing industry standards and have been designed to
meet the openness and scalability required of Internet
solutions. We will continue to collaborate with companies to
develop new technologies and to encourage the adoption and
implementation of universal standards that can foster and
simplify the exchange of financial information through the
Internet. We intend to continue investing in research and
development to meet the needs of our customers as they evolve
their Internet offerings.

Products and Services

Our solutions enable financial institutions,
Internet portals and other Internet financial service providers
to offer their customers a variety of financial services over
the Internet, including Internet banking, electronic bill
presentment and payment, web content management and data
aggregation. We also offer a variety of services to support our
customers throughout the process of implementing and maintaining
our solutions.



| |                                                
| | -----------------------------------------------
| | Voyager  The Operating
	System for
	eFinanceTM

Corillian Voyager.Corillian Voyager is a software
platform upon which we have built a menu of applications, all of
which we can provide on a hosted basis or which can run on our
customers premises. Corillian Voyager has been designed to
be highly scalable to meet the evolving needs of our customers.
Independent laboratory test results indicate that Corillian
Voyager can support Internet banking programs for more than
3.5 million users. In addition, Corillian Voyager has been
designed using universal standards, including eXtensible Markup
Language for communication, Open Financial Exchange for
financial transactions, and Microsofts Distributed
interNet Applications Architecture for Financial Services for
interoperability. This architecture enables our customers to
deploy new Internet-based financial services by adding
applications to our platform at any time and by integrating
future applications to any Internet connected point-of-presence.

Corillian Voyager SE.Corillian Voyager Special
Edition (SE) is a hosted Internet banking solution tailored
to the specific needs of small to mid-sized financial
institutions looking for the same scalability and reliability of
Corillian Voyager in a more rapidly deployable, economical
solution. Corillian Voyager SE applications include all
applications available within the Corillian Voyager platform.
Corillian Voyager SE can be connected to a variety of host
systems in as little as 60 to 90 days and involves less
customization than the Corillian Voyager platform. Corillian
Voyager SE is hosted in Corillians state-of-the-art
data center in Oregon.



| |                          
| | -------------------------
| | Applications for eFinance

Consumer Banking.Our Consumer Banking application
enables financial institutions to offer their retail customers
secure, real-time access to transactional banking services
through the Internet. These services can be delivered to the
desktop or accessed by wireless devices. Internet users can
receive their consolidated account information and transaction
history and conduct financial transactions, such as transfers
and loan payments, over the Internet 24 hours a day, seven
days a week. The financial institutions can choose standard
browser-based user interfaces or more customized Internet
templates and online screens.

Corillian Payments.Our Corillian Payments application
enables financial service providers to offer their customers
electronic bill payment services and to deliver bills to their
customers through a standard Internet page, through supported
personal finance management software, such as Quicken or
Microsoft Money, or as a digital image of a scanned paper bill.
A financial service provider can choose to deliver its own
bills, the bills of direct billing businesses, or the bills of
third-party bill presentment providers, such as CheckFree or
Metavante. By consolidating all bill presentment and payment
options, our solution enables Internet users to pay bills in the
same program where they do most of their financial transactions.
This application also enables financial institutions to extend
their product and service features for their customers and to
present bills on behalf of their business customers.

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Open Financial Exchange
Publishing.Our OFX Publishing
application enables financial institutions to offer their
customers the ability to integrate their financial information
with personal financial management software, such as Quicken,
QuickBooks and Microsoft Money, or Internet portals such as
Yahoo! Finance and MSN MoneyCentral. Each of our solutions was
designed using the Open Financial Exchange data standard. This
data specification streamlines the process financial service
companies must employ to connect with financial data centers and
to interface with personal financial management software.

eCRM.Our eCRM
application provides financial institutions with the tools to
gather, organize and capitalize on information collected within
the Voyager system and to monitor and administer other
applications in the Voyager system. Using this application,
financial institutions can generate comprehensive reports
regarding the financial transactions of their customers, view
Internet usage, track new customer additions and manage targeted
advertising campaigns. Advertisements can be customized using
customer profile information gathered from the financial
institutions data systems and from data derived from
customer usage of the Voyager system. For example, a financial
institution can segment customers who have a balance of $10,000
or greater in a savings account, pay three credit cards online,
and have a high profitability index, and establish a targeted
marketing campaign for selling certificates of deposit to these
customers. Our application can react immediately to customer
profile changes and terminate messages to customers who have
already purchased the marketed product.

Small Business
Banking.Our Small Business Banking
application enables financial institutions to offer their small
business customers secure, real-time access to account history
and the ability to conduct cash management functions through an
Internet browser or accounting packages like QuickBooks.
Businesses can control access to business banking and account
features to provide financial and audit controls for their staff
and can reconcile accounts instantly.

Corillian OneSource Register.Our Corillian OneSource
Register (OSR) application enables a financial institution
to provide its customers with a customer-driven online check
registry and to control and enhance its data aggregation
offering. Data aggregation allows a financial institution to
acquire and aggregate financial information from different
banks, brokerages and other financial service providers and
deliver this content to its customers through its website. Using
Corillian OSR, a financial service provider can control
elements of the data aggregation process itself, supplement the
content provided by data aggregation service providers, such as
Yodlee, with content acquired through the OFX data standard and
enhance the presentation of aggregated content for its customers
through online check registries. As a result, a financial
institutions customer can see all of his or her financial
information from different accounts in one place in a
comprehensive and feature-rich manner and only needs to remember
one login identification name and password to access all of this
financial information.

Corillian Personalization
Manager.Corillian Personalization
Manager provides financial institutions with a complete set of
presentation layer tools that enable rapid and easy
administration of their websites. Corillian Personalization
Manager enables the integration of different feeds of content
from different business sites and applications, either within a
financial institution or from third parties. Financial
institutions can also deliver personalized content to consumers
based on their profile information. This can include different
content for different consumers or consumer segments, as well as
a selection of different presentation themes. In addition,
consumers can personalize their websites by choosing content and
placing it on the page in the order they would like to view it
and by choosing different website presentation themes.

Certified Solutions.We seek to provide our customers with a comprehensive solution
for their Internet finance initiatives. Our products adhere to
existing industry standards and have been designed using open
standards so that they can integrate with the products developed
by third parties. Voyager-Certified Solutions are software
packages developed by our technology partners for integration
into the Corillian Voyager platform. Voyager-Certified Solutions
include applications such as the Wireless Finance application
and the Data Aggregation application and are offered through
partnerships with companies such as 724 Solutions, Air2Web
and Yodlee. These solutions are put through the rigors of our
certification testing, so our customers are able to seamlessly
integrate best-of-breed solutions into their Internet platforms.

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| |                      
| | ---------------------
| | Professional Services

We offer a package of professional services
designed to fulfill our customers needs throughout the
process of product design, implementation and operation. Our
services include:

Implementation
Services.Our implementation services
begin during the pre-sales stage. Our implementation experts
perform an analysis of a potential customers product
requirements and determine how these products can best be
integrated with the customers existing host
infrastructure. We then develop a site survey and a project plan
recommendation. Once we are chosen to install our applications,
our professional service team works with the customer to ensure
that every solution is integrated with the customers
existing financial transaction system for delivery over the
Internet. If necessary, we write custom interfaces to handle
transaction requests, validate those requests and convert them
to a standard format for Internet-based presentation or to the
Open Financial Exchange format for delivery to personalized
financial management software. We also customize our Internet
templates to provide our customers with a user interface that
complements their brand recognition, design elements, color
schemes and corporate logos. The implementation process is
generally completed in 90 to 270 days, depending on the
complexity of the project. The fees for our implementation
services vary from project to project, depending on the size of
the customer and the products and services selected by the
customer.

Hosting Services.We
offer hosting services to our customers that prefer to have us
handle all of their Internet-based financial systems. Under this
service option, the Corillian Voyager servers reside at our
managed facility, and our staff monitors and maintains the
servers. Our services include weekly log auditing, installation
and configuration of servers, and staff to help our customers
manage system performance and daily operations. For Corillian
Voyager customers, we charge a monthly hosting fee that varies
based on the needs of the customer and the scope of its online
services. Hosting is included in all Corillian Voyager SE
sales, and the hosting fees are included in the monthly fees we
charge for this product.

Consulting Services.By consulting with our staff, our customers can select and
design an electronic commerce strategy. In addition to
consulting with our customers on the range of products and
services available to them, we help our customers with product
and Internet site design. For customers that lack in-house
network security professionals, we help develop the appropriate
network and security protection features to ensure a secure
system.

Support Services.We
offer several levels of technical and maintenance support for
our customers. These levels are designed to meet our
customers needs and those of their customers. Our support
fees vary based on which level of support the customer selects.
In addition to technical support, we provide annual maintenance
support for each customer. These maintenance services entitle
the customer to updates and modifications of our solutions.

Training Services.We make available to our customers a variety of training
services and supporting materials to help them use our
applications. All courses are led by our staff and can be
conducted at either a customers location or at our
headquarters.

Customers

We target large financial institutions, financial
portals and other financial service providers that are seeking
scalable, reliable and advanced solutions that enable them to
offer Internet-based financial services. We have provided our
solutions primarily to two major industry groups 
large financial institutions (primarily banks) and large credit
unions. In 2001, one customer represented more than 10% of our
revenue. As of December 31, 2001, we had 56 Internet
banking customers, compared to 44 as of December 31, 2000.

Strategic Alliances and Partnerships

We have marketing, technology and resale
alliances with a number of companies in the technology and
financial services industries and will continue to pursue new
alliances with additional companies within these industries.
These alliances are intended to help us address new vertical
markets and market segments and to

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enable us to provide our customers with access to
additional resources and technology to enhance and customize our
solutions. Some of our more significant strategic partners
include:




| |              
| | -------------
| | 724 Solutions

In April 2000, we entered an agreement with
724 Solutions to establish a strategic relationship aimed
at offering financial service providers a platform for mobile
consumer Internet-based financial services using handheld
devices.



| |          
| | ---------
| | CheckFree

CheckFree designs, develops and markets services
that enable consumers to make electronic payments and
collections, automate paper-based recurring financial
transactions and conduct secure transactions on the Internet.
CheckFree is our primary partner for remittance processing and
was a developer with Intuit and Microsoft of the Open Financial
Exchange data standard. We have developed a number of Voyager
interfaces to CheckFree systems.



| |          
| | ---------
| | Microsoft

Microsoft is the publisher of the Windows 2000
Server network, the Microsoft Money personal financial
management program and Microsofts new Money Explorer and
MSN Money Professional products and services, and the
provider of the financial portal, MoneyCentral. In 2001,
Corillian and Microsoft signed a multi-year alliance agreement
to deliver a joint enterprise eFinance solution to financial
institutions worldwide. The agreement spans technology
development, marketing, sales and support of solutions based on
the Corillian Voyager platform, Microsoft Windows 2000
Server network operating system, and .NET, Microsofts
platform for XML web services. Corillian also became the
preferred reseller for Microsofts new Money Explorer and
MSN Money Professional products and services.



| |    
| | ---
| | NCR

In February 2001, we entered into an agreement
with NCR that provides for NCR to use the Corillian Voyager
platform as its core consumer banking component for mid- to
large-sized financial institutions. NCR is a leader in providing
Relationship TechnologyTM solutions to customers
worldwide in the retail, financial, communications,
manufacturing, travel and transportation, and insurance markets.
NCR will customize the Corillian Voyager software to allow
financial institutions greater flexibility in delivering
Internet financial services to their customers. NCRs
Internet banking service is run in a managed server model from
its secure and high availability data centers in
Columbia, Md. and Dallas, Texas.



| |                       
| | ----------------------
| | PricewaterhouseCoopers

In November 2000, we entered into an agreement
with PricewaterhouseCoopers to collaborate on software
development and systems integration for the financial services
industry. PricewaterhouseCoopers is the worlds largest
professional services organization. As part of the agreement,
PricewaterhouseCoopers will implement the Corillian Voyager
platform to help financial institutions worldwide provide
Internet finance-enabling products and services to their
customers.



| |       
| | ------
| | Unisys

In January 2001, we entered into a reseller and
integration agreement with Unisys. Unisys is a global
full-service provider of financial services solutions, providing
domain knowledge and expertise, front- to back-office software
applications, innovative technology, and comprehensive services.
Utilizing its systems integration experience and expertise,
Unisys will sell, implement and support the Corillian Voyager
platform to help financial institutions worldwide provide
Internet-based financial services to their customers.

8



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| |       
| | ------
| | Yodlee

In July 2000, we entered into an agreement with
Yodlee to develop and market a product that integrates our
Corillian Voyager platform with Yodlees data aggregation
service. Under the terms of the agreement, Corillian and Yodlee
will jointly market and sell a new, integrated banking and
aggregation solution to global financial institutions. The
bundled offering utilizes our expertise with the OFX data
standard and Yodlees industry-leading data aggregation
platform. The service can either be deployed on a hosted basis
by Yodlee or through our Corillian Voyager platform.

Sales and Marketing

We sell our software and services primarily
through our direct sales organization. As of December 31,
2001, our sales force consisted of 17 personnel operating
worldwide. Our direct sales efforts have historically been
focused on domestic financial service providers, such as banks,
insurance companies and credit unions, but in the third quarter
of 2000, we increased our focus on international financial
service providers. We complement our direct sales efforts
through joint sales and marketing arrangements with
Internet-based technology vendors, such as Unisys and NCR.

Our sales process features a multi-tiered
approach that requires the involvement of our field sales
personnel, our technical professionals and members of our senior
management. Our sales process simultaneously targets senior
business executives, personnel responsible for Internet-based
initiatives and systems engineers. We employ this multi-level
approach to accelerate the purchasing cycle. For
Voyager SE, which is targeted at small to mid-sized
financial institutions, we rely on a combination of
telemarketing, Internet-based marketing and direct sales.

Our products are complex, and sales and
implementations can be delayed due to our customers
procedures for approving large capital expenditures and
deploying new technologies within their networks. As a result,
our sales cycle can vary significantly and typically ranges from
three to nine months.

Research and Development

As of December 31, 2001, our product
development staff consisted of 104 engineers. Their
development efforts are focused on:



| |   |                                                                                                                                                                                                                                                                                                                                                                       
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 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 retail functions, such as wealth
	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

The market for providing solutions to the
Internet financial services industry is highly competitive, and
we expect that competition will intensify in the future. We
compete with a variety of companies in various segments of the
Internet-based financial services industry, and our competitors
vary in size and in the scope and breadth of the products and
services they offer. In the area of Internet consumer banking,
we primarily compete with other companies that provide
outsourced Internet finance solutions to large financial
institutions, including S1 and Financial Fusion. Within this
market segment, we also compete with companies that offer
software platforms designed for internal development of
Internet-based financial services software, such as IBMs
WebSphere, and the internal information technology personnel of
financial institutions that want to develop their own solutions.
In addition, vendors such as Digital Insight, FundsXpress, and
Online Resources

9



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and Communications, who primarily target
community financial institutions, occasionally compete with us
for large financial institutions and compete with us regularly
for smaller financial institutions to which we primarily market
our Corillian Voyager SE product. Several of the vendors
offering data processing services to financial institutions,
including EDS, Fiserv, Jack Henry and M&I Data
Services, offer their own Internet banking solutions. Local
competition for Internet consumer banking services is provided
by many smaller Internet service outsourcing companies located
throughout the United States. Our primary competition for
providing the business banking services that financial
institutions offer their commercial customers are vendors of
cash management systems for large corporations such as ADP,
Magnet and Politzer & Haney.


Our applications also compete with companies that
offer solutions with similar functionality to our solutions,
such as Broadvision and Vignette for targeted marketing
solutions; Just-in-Time for electronic bill presentment and
payment solutions; and Yodlee for aggregated financial data
solutions. We also compete with businesses delivering financial
services through Internet portals, banks marketing their own
Internet-based financial services, and non-bank financial
institutions, such as brokerages and insurance companies,
seeking to expand the breadth of their Internet product and
services offerings.

We also face competition from our customers and
potential customers who develop their own Internet finance
solutions. Rather than purchasing Internet finance solutions and
services from third-party vendors, our customers and potential
customers could develop, implement and maintain their own
services and applications. We give no assurance that these
financial service providers will perceive sufficient value in
our products and services to justify investing in them.

We believe that our ability to compete
successfully depends upon a number of factors, including:



| |   |                                                                                              
| | - | ---------------------------------------------------------------------------------------------
| |  | 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.                                            

We expect competition to increase significantly
as new companies enter our market and existing competitors
expand their product lines and services. In addition, many
companies that provide outsourced Internet finance solutions are
consolidating, creating larger competitors with greater
resources and more products than us. For example, in the past
two years, S1 acquired Edify, F.I.C.S. and QUp, and Digital
Insight acquired nFront and Virtual Financial.

Intellectual Property

Although we believe our success is more dependent
upon our technical expertise than our proprietary rights, our
future success and ability to compete is dependent in part upon
our proprietary technology. We have received registrations for
Corillian and our logo as our trademarks. None of our technology
is patented, but we have established an internal patent team of
engineers and in-house counsel to monitor and evaluate as part
of the new product development cycle our technologies and
business methods for patentability. We have several patent
applications pending in the United States Patent and Trademark
Office but have not been issued any patents.

We rely on a combination of contractual rights
and copyright, trademark and trade secret laws to establish and
protect our proprietary technology. We require all of our
employees to sign an assignment of patents and inventions
agreement and generally enter into confidentiality agreements
with our employees, consultants, resellers, customers and
potential customers. We also limit access to and distribution of
our source code, and further limit the disclosure and use of
other proprietary information. We do not assure you

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that the steps taken by us in this regard will be
adequate to prevent misappropriation of our technology or that
our competitors will not independently develop technologies that
are substantially equivalent or superior to our technology. We
also do not assure you that we will not infringe upon the
intellectual property rights of third parties.


Despite our efforts to protect our proprietary
rights, unauthorized parties may attempt to copy or otherwise
obtain or use our products or technology. In addition, the laws
of some foreign countries do not protect our proprietary rights
to the same extent as do the laws of the United States. The
costs of defending our proprietary rights or claims that we
infringe third-party proprietary rights may be high.

Government Regulation

Numerous federal agencies have recently adopted
rules and regulations protecting consumer privacy and
establishing guidelines for financial institutions to follow in
selecting technology vendors for solutions such as our
solutions. We believe our business does not currently subject us
to any of these rules or regulations that would adversely affect
our business. However, these rules and regulations are new and
may be interpreted to apply to our business in a manner that
could make our business more onerous or costly.

As the Internet continues to evolve, we expect
federal, state and foreign governments to adopt more laws and
regulations covering issues such as user privacy, taxation of
goods and services provided over the Internet, pricing, content
and quality of products and services. If enacted, these laws and
regulations could limit the market for Internet-based financial
services.

If enacted or deemed applicable to us, some laws,
rules or regulations applicable to financial service activities
could render our business or operations more costly and less
viable. The financial services industry is subject to extensive
and complex federal and state regulation, and financial
institutions operate under high levels of governmental
supervision. Our customers must ensure that our services and
related products work within the extensive and evolving
regulatory requirements applicable to them. We may become
subject to direct regulation as the market for our business
evolves. Federal, state or foreign authorities could adopt laws,
rules or regulations affecting our business operations, such as
requiring us to comply with data, record keeping and other
processing requirements. Any of these laws, rules or
regulations, or new laws, rules and regulations affecting our
customers businesses, could lead to increased operating
costs and could also reduce the convenience and functionality of
our services, possibly resulting in reduced market acceptance.

A number of proposals at the federal, state and
local level and by the governments of significant foreign
countries would, if enacted, expand the scope of regulation of
Internet-based financial services and could impose taxes on the
sale of goods and services and other Internet activities. Any
development that substantially impairs the growth of the
Internet or its acceptance as a medium for transaction
processing could have a material adverse effect on our business,
financial condition and operating results.

Employees

As of December 31, 2001, we had a total of
327 full-time employees, including 152 in operations, 16 in
marketing, 51 in sales, 62 in technology and 46 in general and
administration. None of our work force is unionized. We have not
experienced any work stoppages and consider our relations with
our employees to be good.

Risk Factors

You should carefully consider the following
factors regarding forward-looking statements and other
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.

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| |                                                                                                                                    
| | -----------------------------------------------------------------------------------------------------------------------------------
| | We May Need to Raise Additional Financing
	to Fund Our Operations and May Not Be Able to Raise Funds on
	Beneficial Terms or at All

Because we have a history of losses and have
limited cash resources, we may have to raise financing in the
near future to fund our operations. If we are required to raise
financing, we may be required to sell equity or debt securities
at severely discounted prices and with terms that are superior
to the rights of our common shareholders, or we may not be able
to raise financing at all. If we sell equity or debt securities,
the price of our common stock could decrease significantly, and
the interests of our common shareholders could be diluted
substantially.



| |                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------
| | We Have a History of Losses, We Expect to
	Continue to Incur Losses and We May Not Achieve or Maintain
	Profitability

We may never generate sufficient revenues for
profitability. We have incurred substantial net losses in every
quarter since we began operations, and we expect that we will
continue to lose money at least through the end of 2002. We
incurred net losses of $49.3 million for the year ended
December 31, 2001 and as of that date we had an accumulated
deficit of $95.8 million. If we do not sign contracts with
new customers or license additional software to existing
customers, we will incur significant operating losses in future
quarters.



| |                                                                                                                                                          
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------
| | We Have a Limited Operating History and Are
	Subject to the Risks that Our Solutions Are Not Adopted by
	Financial Service Providers or Used by Consumers

We were incorporated in April 1997. Accordingly,
we have a limited operating history with which you can evaluate
our business and prospects. Our business is new and will not be
successful unless consumers adopt wide usage of Internet-based
financial services and financial service providers choose our
solutions to deliver those services. In addition, our prospects
must be considered in light of the risks and uncertainties
encountered by early stage companies in new and rapidly evolving
markets such as the Internet-based financial services market.



| |                                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------
| | Our Quarterly Results Fluctuate
	Significantly and May Fall Short of Anticipated Levels, Which
	May Cause the Price of Our Common Stock to Decline

Our quarterly operating results have varied in
the past and we expect they will continue to vary from quarter
to quarter in the future. In future quarters, our operating
results may be below the expectations of public market analysts
and investors, which could cause the price of our common stock
to decline. In addition, we have difficulty predicting the
volume and timing of orders and recognize a substantial portion
of our revenues on a percentage completion of contract basis.
Any delays in closing orders or implementation of products or
services can cause our operating results to fall substantially
short of anticipated levels for any quarter. As a result of
these and other factors, we believe period-to-period comparisons
of our historical results of operations are not necessarily
meaningful and are not a good predictor of our future
performance.



| |                                                                                      
| | -------------------------------------------------------------------------------------
| | The Market Price for Our Common Stock, Like
	Other Technology Stocks, May Be Volatile

The value of your investment in Corillian could
decline due to the impact of any of the following factors upon
the market price of our common stock:



| |   |                                                             
| | - | ------------------------------------------------------------
| |  | variations in our actual and anticipated
	operating results;
|
| |  | changes in our earnings estimates by analysts;              
|
| |  | our failure to meet analysts performance
	expectations; and
|
| |  | lack of liquidity.                                          

The stock markets have recently experienced stock
price and volume volatility that has affected companies
stock prices. The stock markets may continue to experience
volatility that may adversely affect the market price of our
common stock. Stock prices for many companies in the technology
sector have

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experienced wide fluctuations that have often
been unrelated to their operating performance. Fluctuations such
as these may affect the market price of our common stock.


As of December 31, 2001, the 52-week high
and low trading prices of our common stock, as reported on
Nasdaq, were $14.00 and $1.10, respectively.



| |                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------
| | Our Products Lengthy Sales Cycles May
	Cause Revenues and Operating Results to Be Unpredictable and to
	Vary Significantly From Period to Period

The sale and implementation of our products and
services are often subject to delays because of our
customers internal budgets and procedures for approving
large capital expenditures and deploying new technologies within
their networks. As a result, the time between the date of
initial contact with a potential customer and the execution of a
contract with the customer typically ranges from three to nine
months. In addition, our prospective customers
decision-making processes require us to provide a significant
amount of information to them regarding the use and benefits of
our products. We may expend substantial funds and management
resources during a sales cycle and fail to make the sale.



| |                                                                                                                                                                                        
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We May Not See Increased Demand for Our New
	Corillian Voyager SE Product, and We May Need to Raise
	Additional Financing If We Experience Significant Demand for
	Corillian Voyager SE

Our Corillian Voyager SE product is relatively
new, and we do not have a significant number of customers using
this product. We may not be successful in obtaining customers
for this new product. We have recently reengineered our software
to be able to install multiple financial institutions on a
single set of hardware, which we expect will allow us to achieve
cost savings and compete more effectively in the smaller
financial institution market. However, we may experience
difficulties in installing this new software and achieving the
cost savings we anticipate achieving through installing multiple
financial institutions on a single set of hardware. If we
encounter significant difficulties, our expenses on Corillian
Voyager SE transactions may exceed our revenue from such
transactions.

The payment terms for a standard Corillian
Voyager SE transaction require the financial institution to pay
for the software, hosting and support over a three-year period.
However, most of the expenses associated with a Corillian
Voyager SE transaction are incurred in the first year
following the transaction. For this reason, we do not expect to
recoup our cash investment in a Corillian Voyager SE transaction
until the second or third year of the transaction. If we
experience significant demand for Corillian Voyager SE, we
may need to raise additional financing.



| |                                                                                                                                                        
| | -------------------------------------------------------------------------------------------------------------------------------------------------------
| | We May Not Achieve Anticipated Revenues if
	We Do Not Successfully Introduce New Products or Develop
	Upgrades or Enhancements to Our Existing Products

To date, we have derived substantially all of our
revenues from licenses and professional and support services
related to our Corillian Voyager product and its related
applications. We expect to add new products by acquisition,
partnering or internal development and to develop enhancements
to our existing products. New or enhanced products may not be
released on schedule and may not achieve market acceptance. New
products or upgrades to existing products may contain defects
when released, which could damage our relationship with our
customers or partners and further limit market acceptance of our
products and services. If we are unable to ship or implement new
or enhanced products and services when planned, or fail to
achieve timely market acceptance of our new or enhanced products
and services, we may lose sales and fail to achieve anticipated
revenues.



| |                                                                                                                                                                                          
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | If We, or Our Implementation Partners, Do
	Not Effectively Implement Our Solutions at Financial Service
	Providers Facilities, We May Not Achieve Anticipated
	Revenues or Gross Margins

Our solutions are complex and must integrate with
complex data processing systems at our customers
facilities. Implementing our solutions at these facilities is a
lengthy process, generally taking between 90 and 270 days
to complete. In addition, we generally recognize revenue on a
percentage completion basis, so our revenue is often dependent
on our ability to complete implementations within the time
periods that we

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establish for our projects. We rely on a
combination of internal implementation teams and outsourced
implementation teams for our implementations. If these teams
encounter significant delays in implementing our solutions for a
customer or fail to implement our solutions effectively or at
all at a customers facility, we may not be able to
recognize any revenue from the contract or be required to
recognize negative revenue from the contract if our revised
project estimates indicate that we recognized excess revenues in
prior periods. In addition, we may incur monetary damages or
penalties if we are not successful in completing projects on
schedule.




| |                                                                                                                                                       
| | ------------------------------------------------------------------------------------------------------------------------------------------------------
| | If We Do Not Develop International
	Operations as Expected or Fail to Address International Market
	Risks, We May Not Achieve Anticipated Sales Growth

To increase our revenues, we are pursuing
international sales and partnership opportunities and have
opened international offices. International expansion of our
business may be more difficult or take longer than we
anticipate, and we may not be able to successfully market, sell,
deliver and support our products internationally. We will need
to form additional relationships with partners worldwide. These
activities require investments of time and capital from us. If
we are unable to develop international operations and
international sales on a timely basis or at all, we may not
achieve anticipated sales growth, gross margins or operating
results. If we are successful in developing international sales,
we will be subject to a number of risks associated with
international operations, including:



| |   |                                                                                                                 
| | - | ----------------------------------------------------------------------------------------------------------------
| |  | longer accounts receivable collection cycles;                                                                   
|
| |  | expenses associated with localizing products for
	foreign markets;                                              
|
| |  | difficulties in managing operations across
	disparate geographic areas;                                         
|
| |  | difficulties in hiring qualified local personnel
	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.       

If we fail to address these risks, our results of
operations and financial condition may be adversely affected.



| |                                                                                                                                                                                                                                
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Market for Internet-Based Financial
	Services Has Only Recently Begun to Develop, and if Consumers Do
	Not Widely Use Internet-Based Financial Services, Our Results of
	Operations and Financial Condition Could Be Harmed

We cannot predict the size of the market for
Internet-based financial services, the rate at which that market
will grow, or whether consumers will widely accept
Internet-based financial services such as those enabled by our
products. Any event that results in decreased consumer use of
financial services in general and Internet-based financial
services in particular could harm our results of operations and
financial condition. We expect to continue to depend on
Internet-based financial products and services for substantially
all of our revenues in the foreseeable future. However, the
market for Internet-based financial services has only recently
begun to develop. Critical issues concerning commercial use of
the Internet for financial services  including
security, reliability, privacy, ease and cost of access, and
quality of service  are still evolving. Changes in
economic conditions and unforeseen events, including recession,
inflation or other adverse occurrences, may result in a decline
in the use of financial services in general, and less consumer
demand for Internet-based financial products and services in
particular, each of which could have a material adverse effect
on our results of operations and financial condition.

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| |                                                                                                                                                     
| | ----------------------------------------------------------------------------------------------------------------------------------------------------
| | Competition in the Market for
	Internet-Based Financial Services Is Intense and Could Reduce
	Our Sales and Prevent Us from Achieving
	Profitability

The market for Internet-based financial services
is new, intensely competitive, highly fragmented and rapidly
changing. We expect competition to persist and intensify, which
could result in price reductions, reduced gross margins and loss
of market share for our products and services. We compete with a
number of companies in various segments of the Internet-based
financial services industry, and our competitors vary in size
and in the scope and breadth of the products and services they
offer. Our primary competitors for software platforms designed
to enable financial institutions to offer Internet-based
financial services, both domestically and internationally,
include S1, Digital Insight, Financial Fusion, Online Resources
and Communications and Metavante. We also compete with companies
that offer software platforms designed for internal development
of Internet-based financial services software, such as
IBMs WebSphere. Within this segment of our industry, many
companies are consolidating, creating larger competitors with
greater resources and a broader range of products.

Some of our applications also compete with
companies that offer solutions with similar functionality to our
solutions, such as Broadvision and Vignette for targeted
marketing solutions, Just-in-Time for electronic bill
presentment and payment solutions, and Yodlee for aggregated
financial data solutions. We also compete with businesses
delivering financial services through Internet portals, banks
marketing their own Internet-based financial services, and
non-bank financial service providers, such as brokerages and
insurance companies, seeking to expand the breadth of their
Internet product and services offerings. In addition, our
customers may develop competing products. For example, a bank or
brokerage may choose to develop its own software platform for
Internet-based financial services. Several of the vendors
offering data processing services to financial institutions,
including EDS, Fiserv, Jack Henry and Metavante, also offer
Internet banking solutions that compete with our solutions.

Many of our competitors and potential competitors
have a number of significant advantages over us, including:



| |   |                                                                                                                                                                                                        
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 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.

Our competitors may also bundle their products in
a manner that may discourage users from purchasing our products.
Existing and potential competitors may establish cooperative
relationships with each other or with third parties, or adopt
aggressive pricing policies to gain market share.



| |                                                                                                                                                                                                                                               
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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 Fail to Add Additional Customers to Our Customer
	Base

We derive a significant portion of our revenues
from a limited number of customers in each period. Accordingly,
if we fail to close a sale with a major potential customer, if a
contract is delayed or deferred, or if an existing contract
expires or is cancelled and we fail to replace the contract with
new business, our revenues would be adversely affected. In 2001,
one customer accounted for approximately 16% of our consolidated
revenues. We expect that a limited number of customers will
continue to account for a substantial portion of our revenues in
each quarter in the foreseeable future. If a customer terminates
a Voyager contract with us early, we would lose ongoing revenue
streams from annual maintenance fees, hosting fees, professional
service fees and potential additional license and service fees
for additional increments of end users and for other Voyager
applications.

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| |                                                                                                                    
| | -------------------------------------------------------------------------------------------------------------------
| | Consolidation in the Financial Services
	Industry Could Reduce the Number of Our Customers and Potential
	Customers

As a result of the mergers and acquisitions
occurring in the banking industry today, some of our existing
customers could terminate their contracts with us and potential
customers could break off negotiations with us. An existing or
potential customer may be acquired by or merged with another
financial institution that uses competing Internet-based
financial products and services or does not desire to continue
the relationship with us for some other reason, which could
result in the new entity terminating the relationship with us.

In addition, an existing or potential customer
may be acquired by or merged with one of our existing customers
that licenses our products under a contract with more favorable
terms and that can be applied to the acquired customers
business operations. This may result a reduction in our
anticipated revenue from the acquired customer.

Recently, one of our customers, Wachovia
Corporation, was acquired by First Union. The combined entity
may decide to terminate its relationship with us. This would
substantially reduce the likelihood that we would obtain future
revenue from this customer.



| |                                                                                                                                 
| | --------------------------------------------------------------------------------------------------------------------------------
| | If We Lose Key Personnel, We Could
	Experience Reduced Sales, Delayed Product Development and
	Diversion of Management Resources

Our success depends largely on the continued
contributions of our key management, technical, sales and
marketing and professional services personnel, many of whom
would be difficult to replace. If one or more members of our key
employees were to resign, the loss of personnel could result in
loss of sales, delays in new product development and diversion
of management resources. We do not have employment agreements
with our senior managers or other key personnel. We maintain
key person life insurance in the amount of
$2.0 million on Ted F. Spooner, our Chief Executive
Officer, but this amount likely would be inadequate to
compensate us for the loss of his services.



| |                                                                                                                 
| | ----------------------------------------------------------------------------------------------------------------
| | Acquisitions May Be Costly and Difficult to
	Integrate, Divert Management Resources or Dilute Shareholder
	Value

We have made strategic acquisitions in the past
and in the future may acquire or make investments in
complementary companies, products or technologies. We may not be
able to successfully integrate these companies, products or
technologies. In connection with these acquisitions or
investments, we could:



| |   |                                                                                                                                           
| | - | ------------------------------------------------------------------------------------------------------------------------------------------
| |  | 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 and immediate write-offs of goodwill or
	other intangible assets.

Future acquisitions also could pose numerous
additional risks to our operations, including:



| |   |                                                                                    
| | - | -----------------------------------------------------------------------------------
| |  | 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.

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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

Any intellectual property infringement claims
against us, with or without merit, could be costly and
time-consuming to defend, divert our managements
attention, or cause product delays. We expect that software
product developers and providers of Internet-based financial
services will increasingly be subject to infringement claims as
the number of products and competitors in our industry grows and
the functionality of products overlaps. If our products were
found to infringe a third partys proprietary rights, we
could be required to enter into royalty or licensing agreements
in order to be able to sell our products. Royalty and licensing
agreements, if required, may not be available on terms
acceptable to us or at all.

There has been substantial litigation in the
software and Internet industries regarding intellectual property
rights. We have been subjected to infringement claims in the
past. It is possible that, in the future, third parties may
claim that our current or potential future products infringe
their intellectual property.

In April 2000, KeyBank National Association
brought a lawsuit against one of our employees, alleging that
the employee violated the terms of confidentiality agreements
with KeyBank and misappropriated trade secrets of KeyBank and
used them in performing work for us. We investigated the
allegations and concluded that the employee did not use trade
secrets or confidential information in performing any
substantial services for us. We continue to employ this
employee. In January 2001, KeyBank named us as a party to the
lawsuit, alleging that we misappropriated KeyBanks trade
secrets and confidential information and used them in performing
work for some of our customers. KeyBank is seeking unspecified
monetary damages. We filed a counterclaim against KeyBank,
alleging that KeyBank used proprietary information that we
disclosed to KeyBank when we shared our technology with them in
November 1998. We are seeking unspecified monetary damages. We
intend to vigorously contest KeyBanks claims and pursue
our counterclaim. An outcome that is adverse to us, costs
associated with the lawsuit and the diversion of
managements time and resources to defend the lawsuit could
seriously harm our business, results from operations, financial
condition and liquidity.



| |                                                                                
| | -------------------------------------------------------------------------------
| | Network or Internet Security Problems Could
	Damage Our Reputation and Business

Unknown security risks may result in liability to
us and also may deter financial service providers from
purchasing our products and deter consumers of financial
services from using our products or services. We rely on
standard Internet security systems, all of which are licensed
from third parties, to provide the security and authentication
necessary to effect secure transmission of data over the
Internet. Our networks may be vulnerable to unauthorized access,
computer viruses and other disruptive problems. In addition,
advances in computer capabilities, new discoveries in the field
of cryptography or other events or developments may render our
Internet security measures inadequate. Someone who is able to
circumvent security measures could misappropriate proprietary
information or cause interruptions in our Internet operations.
We may need to expend significant capital or other resources
protecting against the threat of security breaches or
alleviating problems caused by breaches. Eliminating computer
viruses and alleviating other security problems may result in
interruptions, delays or cessation of service to users accessing
Internet sites that deliver our services, any of which could
harm our business.



| |                                                                                                                                                                                     
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We May Incur Substantial Losses From
	Non-Operating Activities, Such as Our Minority Investments in
	Other Companies, or Lose the Entire Amount We Have Invested in
	Other Companies

In the second fiscal quarter of 2000, we made a
$3.0 million minority investment in e-Banc, LLC, a Delaware
limited liability company. We are currently obligated to
contribute an additional $1.0 million in cash to e-Banc and
are in the process of structuring a note to be issued to e-Banc
that would extend the date for payment of this amount until
2003. We may not be successful in structuring this note and may
be required to contribute the additional funds in 2002. Under
applicable accounting rules, our proportionate share of any
losses incurred by e-Banc will be reflected on our statement of
operations as a loss from non-operating activities. These losses
may be substantial. During the year ended December 31,
2001, we incurred $592,000 in losses from non-operating
activities as a result of our investment in e-Banc. We may lose
a portion or all of our investment in e-Banc.

17



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We may in the future make similar investments in
other companies. These investments could result in additional
losses for us.



| |                                                     
| | ----------------------------------------------------
| | New Technologies Could Render Our Products
	Obsolete

If we are unable to develop products that respond
to changing technology, our business could be harmed. The market
for Internet-based financial services is characterized by rapid
technological change, evolving industry standards, changes in
consumer demands and frequent new product and service
introductions. Advances in Internet technology or in
applications software directed at financial services could lead
to new competitive products that have better performance or
lower prices than our products and could render our products
obsolete and unmarketable. Our Voyager solutions were designed
to run on servers using the Windows NT and Windows 2000
operating systems. If a new software language or operating
system becomes standard or is widely adopted in our industry, we
may need to rewrite portions of our products in another computer
language or for another operating system to remain competitive.



| |                                                                                                                                                                                                                 
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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

Complex software products like ours may contain
undetected errors or defects that may be detected at any point
in the life of the product. We have in the past discovered
software errors in our products. After implementation, errors
may be found from time to time in our new products or services,
our enhanced products or services, or products or services we
resell for strategic partners, such as Yodlees data
aggregation service. These errors could cause us to lose
revenues or cause a delay in market acceptance of our solutions
or could result in liability for damages, injury to our
reputation or increased warranty costs.



| |                                                                                                       
| | ------------------------------------------------------------------------------------------------------
| | Restrictions on Export of Encrypted
	Technology Could Cause Us to Incur Delays in International
	Sales

Our software uses encryption technology, the
export of which is regulated by the United States government. If
the United States adopts new legislation restricting export of
software and encryption technology, we may experience delay or
reduction in shipment of our products internationally. Existing
or future export regulations could limit our ability to
distribute our products outside of the United States. We cannot
effectively control the unauthorized distribution of software
across the Internet. A delay or reduction in the shipment of our
products internationally or the unauthorized distribution of our
software across the Internet could cause our results from
operations and financial condition to suffer.



| |                                                                                                        
| | -------------------------------------------------------------------------------------------------------
| | Our Products and Services Must Interact
	With Other Vendors Products, Which May Not Function
	Properly

Our products are often used in transaction
processing systems that include other vendors products,
and, as a result, our products must integrate successfully with
these existing systems. System errors, whether caused by our
products or those of another vendor, could adversely affect the
market acceptance of our products, and any necessary
modifications could cause us to incur significant expenses.



| |                                                                                                        
| | -------------------------------------------------------------------------------------------------------
| | If We Become Subject to Product Liability
	Litigation, It Could be Costly and Time Consuming to
	Defend

Since our products are used to deliver services
that are integral to our customers businesses, errors,
defects or other performance problems could result in financial
or other damages to our customers. Product liability litigation
arising from these errors, defects or problems, even if it were
unsuccessful, would be time consuming and costly to defend.
Existing or future laws or unfavorable judicial decisions could
negate any limitation of liability provisions that are included
in our license agreements.

18



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| |                                                                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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

Our future success and ability to compete depend
in part upon our proprietary technology, but our protective
measures may prove inadequate to protect our proprietary rights.
We rely on a combination of copyright, trademark, patent and
trade secret laws and contractual provisions to establish and
protect our proprietary rights. None of our technology is
patented. We have obtained federal trademark registration for
some of our marks. We have applied for, but have not yet
obtained, patents on technology we have developed. If we do not
receive approval for these patents, we may be unable to use this
technology without restriction or prevent others from using this
technology.

Despite our efforts to protect our intellectual
property, a third party could copy or otherwise obtain our
software or other proprietary information without authorization,
or could develop software competitive to ours. Our competitors
may independently develop similar technology, duplicate our
products or design around our intellectual property rights. In
addition, the laws of some foreign countries do not protect our
proprietary rights to as great an extent as do the laws of the
United States, and we expect the use of our products will become
more difficult to monitor if we increase our international
presence.

We may have to litigate to enforce our
intellectual property rights, to protect our trade secrets or
know-how or to determine their scope, validity or
enforceability. Enforcing or defending our intellectual property
rights is expensive, could cause the diversion of our resources
and may not prove successful. If we are unable to protect our
intellectual property, we may lose a valuable competitive
advantage.



| |                                                                                                                                                                                                                                   
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Increasing Government Regulation of the
	Internet and the Financial Services Industry Could Limit the
	Market for Our Products and Services, Impose on Us Liability For
	Transmission of Protected Data and Increase Our
	Expenses

Numerous federal agencies have recently adopted
rules and regulations protecting consumer privacy and
establishing guidelines for financial institutions to follow in
selecting technology vendors for solutions such as our
solutions. We believe our business does not currently subject us
to any of these rules or regulations that would adversely affect
our business. However, these rules and regulations are new and
may be interpreted to apply to our business in a manner that
could make our business more onerous or costly.

As the Internet continues to evolve, we expect
federal, state and foreign governments to adopt more laws and
regulations covering issues such as user privacy, taxation of
goods and services provided over the Internet, pricing, content
and quality of products and services. If enacted, these laws and
regulations could limit the market for Internet-based financial
services.

If enacted or deemed applicable to us, some laws,
rules or regulations applicable to financial service activities
could render our business or operations more costly and less
viable. The financial services industry is subject to extensive
and complex federal and state regulation, and financial
institutions operate under high levels of governmental
supervision. Our customers must ensure our services and related
products work within the extensive and evolving regulatory
requirements applicable to them. We may become subject to direct
regulation as the market for our business evolves. Federal,
state or foreign authorities could adopt laws, rules or
regulations affecting our business operations, such as requiring
us to comply with data, record keeping and other processing
requirements. Any of these laws, rules or regulations, or new
laws, rules and regulations affecting our customers
businesses, could lead to increased operating costs and could
also reduce the convenience and functionality of our services,
possibly resulting in reduced market acceptance.

A number of proposals at the federal, state and
local level and by the governments of significant foreign
countries would, if enacted, expand the scope of regulation of
Internet-based financial services and could impose taxes on the
sale of goods and services and other Internet activities. Any
development that substantially impairs the growth of the
Internet or its acceptance as a medium for transaction
processing could have a material adverse effect on our business,
financial condition and operating results.

19



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You should
not rely on our forward-looking statements

This document contains forward-looking statements
that involve risks and uncertainties that may cause our actual
results to differ materially from any forward-looking statement.
These statements relate to future events or our future financial
performance. In some cases, you can identify forward-looking
statements by terminology including could,
may, will, should,
expect, plan, anticipate,
believe, estimate, predict,
potential or continue, the negative of
these terms or other comparable terminology. These statements
are only predictions. Actual events or results may differ
materially. In evaluating these statements, you should
specifically consider various factors, including the risks
described above, located in 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 are under no duty 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.




Item 2.     Properties

Our corporate headquarters are located in
Hillsboro, Oregon. We lease approximately 122,000 square
feet at our Hillsboro, Oregon World Campus, and the lease for
this space expires in October 2007. We lease approximately
7,300 square feet in London, England, which serves as our
international headquarters. This is a five-year lease, but we
have the right to terminate it at the end of each year. From
time to time, we lease office space in foreign countries on a
daily or weekly basis. We do not own or lease any other
properties or facilities.




Item 3.     Legal
Proceedings

In April 2000, KeyBank National Association
brought a lawsuit in the Court of Common Pleas in Cuyahoga
County, Ohio against one of our employees, alleging that the
employee violated the terms of confidentiality agreements with
KeyBank and misappropriated trade secrets of KeyBank and used
them in performing work for us. We investigated the allegations
and concluded that the employee did not use trade secrets or
confidential information in performing any substantial services
for us. We continue to employ this employee. In January 2001,
KeyBank named us as a party to the lawsuit, alleging that we
misappropriated KeyBanks trade secrets and confidential
information and used them in performing work for some of our
customers. KeyBank is seeking unspecified monetary damages. We
filed a counterclaim against KeyBank, alleging that KeyBank used
proprietary information that we disclosed to KeyBank when we
shared our technology with them in November 1998. We are seeking
unspecified monetary damages. We intend to vigorously contest
KeyBanks claims and pursue our counterclaim.




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

Not applicable.

20



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##### Table of Contents






PART II




Item 5.     Market
for the Registrants Common Stock and Related Shareholder
Matters

Our common stock is traded on the Nasdaq National
Market under the symbol CORI. Public trading of the
common stock commenced on April 12, 2000. Prior to that,
there was no public market for the common stock. The following
table sets forth, for the periods indicated, the high and low
sale price per share of the common stock as reported by the
Nasdaq National Market:

|                                     |  |      |       |     |  |   |      | 
|------------------------------------ |  | ---- | ----- | --- |  | - | ---- | 
|                                     |  | High |       | Low
|                                     |  |      |       |    
|Year ended December 31, 2000         |  |      |       |     |  |   |      | 
|Second Quarter (from April 12, 2000) |  | $    | 32.81 |     |  | $ | 6.88 | 
|Third Quarter                        |  | $    | 18.00 |     |  | $ | 7.00 | 
|Fourth Quarter                       |  | $    | 17.06 |     |  | $ | 9.38 | 
|                                    
|Year ended December 31, 2001         |  |      |       |     |  |   |      | 
|First Quarter                        |  | $    | 14.00 |     |  | $ | 4.81 | 
|Second Quarter                       |  | $    | 5.97  |     |  | $ | 2.56 | 
|Third Quarter                        |  | $    | 4.72  |     |  | $ | 1.10 | 
|Fourth Quarter                       |  | $    | 5.70  |     |  | $ | 1.41 | 

As of March 18, 2002, our common stock was
held by an estimated 214 shareholders of record. Brokers
and other institutions hold many of such shares on behalf of
shareholders.

We have never declared or paid any cash dividends
on our common stock. We currently intend to retain our earnings,
if any, for use in our business and do not anticipate paying any
cash dividends in the foreseeable future.

The effective date of the Registration Statement
for our initial public offering, filed on Form S-1 under
the Securities Act of 1933 (Registration Statement Number
333-95513), was April 12, 2000. The class of securities
registered was common stock. The managing underwriters in the
offering were Credit Suisse First Boston, Chase H&Q,
Donaldson, Lufkin & Jenrette and Friedman Billings
Ramsey.

Pursuant to the Registration Statement, we
registered and sold 4,600,000 of its common stock to an
underwriting syndicate at an initial public offering price of
$8.00 per share. Simultaneous with the closing of the initial
public offering, we received an additional $21.0 million
from the sale of 2,625,000 shares of common stock at $8.00 per
share in private placements to 724 Solutions, Inc.
($7.0 million), Lehman Brothers Holdings Inc.
($7.0 million) and Huntington Bancshares Inc.
($7.0 million). Additionally, simultaneous with the closing
of the initial public offering, Bank One Corporation purchased a
warrant for 250,000 shares of common stock for approximately
$1.4 million. This warrant was immediately exercisable and
has a term of three years.

We realized $54.7 million in proceeds from
our initial public offering and concurrent private placement and
warrant issuance, net of discounts, commissions and issuance
costs.

We have used, and continue to expect to use, the
proceeds from the sale of common stock for general corporate
purposes, including working capital. A portion of the proceeds
may also be used to acquire or invest in complementary
companies, product lines, products or technologies. Pending such
uses, we have invested the net proceeds from the sale of common
stock in investment grade, interest-bearing securities. None of
the net proceeds of the offering were paid by Corillian,
directly or indirectly, to any director, officer or general
partner of Corillian or any of their associates, or to any
persons owning 10% or more of any class of Corillians
equity securities, or any affiliates of Corillian.

21



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##### Table of Contents






Item 6.     Selected
Financial Data

The following selected financial data and other
operating information are derived from our consolidated
financial statements, which have been audited by KPMG LLP,
independent auditors. The tables shown below represent portions
of our consolidated financial statements and are not complete.
This selected financial data should be read in conjunction with
Managements Discussion and Analysis of Financial
Condition and Results of Operations and our consolidated
financial statements and related notes included elsewhere in
this report. Historical results are not necessarily indicative
of the results of operations in future periods.

|                                            |                   |                                          |        |                         |   |      |        |       |   |      |         |       |   |   |         |        |   |   |         |        |  
|------------------------------------------- | ----------------- | ---------------------------------------- | ------ | ----------------------- | - | ---- | ------ | ----- | - | ---- | ------- | ----- | - | - | ------- | ------ | - | - | ------- | ------ | -
|                                            |                   | Period from                              |        |                         |   |      |        |       |   |     
|                                            |                   | April 9, 1997                            |        |                         |   |      |        |       |   |     
|                                            |                   | (Date of                                 |        |                        
|                                            |                   | Inception) to                            |        | Year Ended December 31,
|                                            |                   | December 31,                             |        |                        
|                                            |                   | 1997                                     |        | 1998                    |   | 1999 |        | 2000  |   | 2001
|                                            |                   |                                          |        |                         |   |      |        |       |   |     
|                                            |                   |                                         
|                                            |                   | (In thousands, except per share amounts)
|Consolidated Statement of Operations
	Data: |                   |                                          |        |                         |   |      |        |       |   |      |         |       |   |   |         |        |   |   |         |       
|Revenue                                     |                   | $                                        | 399    |                         |   | $    | 3,393  |       |   | $    | 7,736   |       |   | $ | 30,853  |        |   | $ | 53,848  |       
|Gross profit                                |                   |                                          | 81     |                         |   |      | 1,499  |       |   |      | 1,085   |       |   |   | 8,354   |        |   |   | 23,491  |       
|Loss from operations                        |                   |                                          | (1,423 | )                       |   |      | (1,927 | )     |   |      | (10,393 | )     |   |   | (35,169 | )      |   |   | (48,998 | )(1)  
|Net loss                                    |                   |                                          | (1,396 | )                       |   |      | (1,831 | )     |   |      | (9,994  | )     |   |   | (33,255 | )      |   |   | (49,301 | )     
|Net loss per share:                         |                   |                                          |        |                         |   |      |        |       |   |      |         |       |   |   |         |        |   |   |         |       
|                                            | Basic and diluted |                                          | $      | (0.38                   | ) |      | $      | (0.24 | ) |      | $       | (1.37 | ) |   | $       | (1.33  | ) |   | $       | (1.42  | )
|Weighted average shares:                    |                   |                                          |        |                         |   |      |        |       |   |      |         |       |   |   |         |        |   |   |         |       
|                                            | Basic and diluted |                                          |        | 3,771                   |   |      |        | 7,427 |   |      |         | 7,399 |   |   |         | 25,106 |   |   |         | 34,645 |  



---



|    |                                                                                                             
|--- | ------------------------------------------------------------------------------------------------------------
|(1) | Corillian recorded restructuring and impairment
	charges of $18,097 during the year ended December 31, 2001.

|                                           |  |                |       |      |  |      |        |      |  |      |         |   |  |   |         |  |  |   |        | 
|------------------------------------------ |  | -------------- | ----- | ---- |  | ---- | ------ | ---- |  | ---- | ------- | - |  | - | ------- |  |  | - | ------ | 
|                                           |  |               
|                                           |  | December 31,  
|                                           |  |               
|                                           |  | 1997           |       | 1998 |  | 1999 |        | 2000 |  | 2001
|                                           |  |                |       |      |  |      |        |      |  |     
|                                           |  |               
|                                           |  | (In thousands)
|Consolidated Balance Sheet Data:           |  |                |       |      |  |      |        |      |  |      |         |   |  |   |         |  |  |   |        | 
|Cash and cash equivalents                  |  | $              | 768   |      |  | $    | 290    |      |  | $    | 8,502   |   |  | $ | 49,150  |  |  | $ | 15,798 | 
|Investments                                |  |                |      |      |  |      |       |      |  |      | 10,357  |   |  |   |        |  |  |   | 1,905  | 
|Working capital (deficit)                  |  |                | 424   |      |  |      | (1,392 | )    |  |      | 16,976  |   |  |   | 41,299  |  |  |   | 17,759 | 
|Total assets                               |  |                | 1,164 |      |  |      | 948    |      |  |      | 25,902  |   |  |   | 101,158 |  |  |   | 50,243 | 
|Debt and capital leases, long-term portion |  |                |      |      |  |      |       |      |  |      | 177     |   |  |   | 5,265   |  |  |   | 3,730  | 
|Redeemable convertible preferred stock     |  |                |      |      |  |      |       |      |  |      | 31,501  |   |  |   |        |  |  |   |       | 
|Total shareholders equity (deficit)       |  |                | 659   |      |  |      | (1,165 | )    |  |      | (11,706 | ) |  |   | 72,593  |  |  |   | 28,104 | 

22



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

The discussion in this report contains
forward-looking statements that involve risks and uncertainties.
Corillians actual results could differ materially from
those discussed below. Factors that could cause or contribute to
such differences include, but are not limited to, those
identified below, and those discussed in the section titled
Risk Factors, included elsewhere in this report.
When used in this document, the words believes,
expects, anticipates,
intends, plans and similar expressions
are intended to identify certain of these forward-looking
statements. However, these words are not the exclusive means of
identifying such statements. In addition, any statements that
refer to expectations, projections or other characterizations of
future events or circumstances are forward-looking statements.
The cautionary statements made in this document should be read
as being applicable to all related forward-looking statements
wherever they appear in this document.

Overview

We license software and provide professional
services to financial service providers, such as banks,
brokerages, insurance companies and financial portals. Corillian
Voyager is a software platform combined with a set of
applications for Internet banking, electronic bill presentment
and payment, targeted marketing, data aggregation and online
customer relationship management. Our Corillian Voyager Standard
Edition (SE) is a hosted Internet banking solution tailored
to the specific needs of small to mid-sized financial
institutions looking for the same scalability and reliability of
Corillian Voyager in a more rapidly deployable, economical
solution. The Corillian Voyager SE services include Internet
banking, bill payment and the complete integration of the Open
Financial Exchange (OFX) data standard.

Substantially all of our revenue is derived from
licensing our software and performing professional services for
our customers, both through direct sales channels and indirect
sales partners. These professional services include
implementation, custom software engineering, consulting,
maintenance, training and hosting. In most cases, we recognize
revenues for licenses, implementation and custom engineering
services using the percentage-of-completion method. Revenue
relating to maintenance services is recognized ratably over the
term of the associated maintenance contract. Revenues derived
from training, hosting and consulting services are recognized as
the services are performed. We generally license Corillian
Voyager on an end user basis, with our initial license fee based
on a fixed number of end users. As a customer increases its
installed base of end users beyond the initial fixed number of
end users, our software license requires the customer to pay us
an additional license fee to cover additional increments of end
users. For customers that provide us with significant strategic
advantages, we have in the past and may in the future charge
discounted license fees based on an unlimited number of end
users.

Cost of revenues consists primarily of salaries
and related expenses for professional service personnel and
outsourced professional service providers who are responsible
for the implementation and customization of our software and for
maintenance and support personnel who are responsible for
software maintenance. Our cost of revenues also includes a
royalty and purchases of equipment and materials. In connection
with the purchase of the Voyager technology in 1997, we agreed
to pay a royalty of 7% of our revenues, up to a maximum of
$1.75 million, which we fully recognized and paid as of
December 31, 2000. From time to time to accommodate
specific customers, we resell equipment and materials to these
customers, and the expenses associated with the purchase of this
equipment and materials is included within the cost of revenues
in the year in which the resale occurs.

Since incorporation, we have incurred substantial
costs to develop and market our technology and to provide
professional services. As a result, we have incurred net losses
in each quarter of operation since inception and have
accumulated a deficit of $95.8 million as of
December 31, 2001. Our limited operating history makes it
difficult to forecast future operating results. As a result of
the rapid evolution of our business and our limited operating
history, we believe period-to-period comparisons of our results
of operations, including our revenues and costs of revenues and
operating expenses as a percentage of sales, are not necessarily
indicative of our future performance.

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Customers who individually accounted for more
than 10% of our revenue on a consolidated basis represented 32%,
24% and 16% of our total revenues for the years ended
December 31, 1999, 2000 and 2001, respectively.

Acquisitions

In November 2000, we acquired Hatcher Associates
Inc. (Hatcher), a software integration, implementation and
consulting company focused on applications for consumer banking.
Under the terms of the Stock Purchase Agreement dated
November 24, 2000, between Hatcher and Corillian,
approximately 1.9 million shares of Corillian Common Stock
were issued or reserved for issuance for all outstanding shares
of Hatcher. Corillian also assumed outstanding options for
212,700 shares of the common stock of Hatcher, which converted
into fully vested options for 41,581 shares of Corillian common
stock. The acquisition was accounted for using the purchase
method of accounting and, accordingly, the net assets and
results of operations of Hatcher have been included in
Corillians consolidated financial statements since the
acquisition date. Of the total purchase price of
$25.7 million, approximately $3.7 million was
allocated to tangible assets acquired, offset by approximately
$1.4 million of liabilities assumed, and the remainder was
allocated to intangible assets, including customer relationships
of $2.6 million, workforce of $1.8 million and goodwill of
$19.0 million. The estimate of fair value of the net assets
acquired was based on an independent appraisal and management
estimates. Goodwill and customer relationships are amortized
over their estimated useful lives of three years and workforce
is amortized over its estimated useful life of two years. During
2001, Corillian recorded an impairment charge of approximately
$16.8 million related to goodwill and other intangible
assets resulting from this acquisition (see Note 12 to the
consolidated financial statements for further discussion).

In April 2000, Corillian issued an aggregate of
138,638 shares of our Common Stock to acquire InterTech Systems,
Inc. (InterTech), a Minnesota corporation, which was a developer
of data aggregation intellectual property and technology.
Following the provisions of SFAS No. 86, Accounting for
the Costs of Computer Software to Be Sold, Leased or Otherwise
Marketed, Corillian recorded approximately $1.3 million
in research and development expenses during 2000, consisting of
$1.1 million relating to the 138,638 shares issued to
InterTech and $228,000 for consulting and other services
relating to the acquisition in connection with the InterTech
transaction.

Critical Accounting Policies and
Estimates

Managements discussion and analysis of
financial condition and results of operations is based upon our
consolidated financial statements, which have been prepared in
accordance with accounting principles generally accepted in the
United States of America. The preparation of consolidated
financial statements requires Corillian to make estimates and
judgments that affect the reported amounts of assets,
liabilities, revenues and expenses, and related disclosure of
contingent assets and liabilities. On an on-going basis,
Corillian evaluates its estimates, including those related to
revenue recognition, bad debts, investments, intangible assets,
income taxes, financing operations, restructuring, and
contingencies and litigation. Corillian bases its estimates on
historical experience and on various other assumptions that are
believed to be reasonable under the circumstances, the results
of which form the basis for making judgments about the carrying
values of assets and liabilities that are not readily apparent
from other sources. Actual results may differ from these
estimates under different assumptions or conditions.

Certain of our accounting policies require higher
degrees of judgment than others in their application. These
include software revenue recognition, impairments and estimation
of useful lives of long-term assets, and accruals for loss
contracts and contingencies. Our policy and related procedures
for software revenue recognition are summarized below. In
addition, Note 2 to the Consolidated Financial Statements
includes further discussion of our significant accounting
policies.

Revenue Recognition.Corillian recognizes revenue from software licensing agreements
in accordance with the provisions of Statement of Position (SOP)
No. 97-2, Software Revenue Recognition, as amended
by SOP No. 98-9, Modification of SOP No. 97-2,
Software Revenue Recognition, with Respect to Certain
Transactions. Corillians software licenses are
functionally dependent on implementation and certain custom

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software engineering services; therefore,
software licenses and implementation services, together with
custom software engineering services that are essential to the
functionality of the software, are combined and recognized using
the percentage-of-completion method of contract accounting in
accordance with SOP 81-1, Accounting for Performance of
Construction-Type and Certain Production-Type Contracts.


Revenue on software arrangements involving
multiple elements, which generally include software licenses,
implementation and custom software engineering services,
post-contractual customer support, training services and hosting
services, is allocated to the elements using the residual method
specified in SOP No. 98-9. Corillian has determined that
post-contractual customer support, training and hosting services
can be separated from software licenses, implementation and
custom software engineering services because
(a) post-contractual customer support, training and hosting
services are not essential to the functionality of any other
element in the arrangement, and (b) sufficient
vendor-specific objective evidence exists to permit the
allocation of revenue to these service elements. Vendor-specific
objective evidence has been established on post-contractual
customer support and hosting services using the price the
customer is required to pay when they are sold separately (the
renewal rate), and on training based on the price customers are
charged when these services are sold separately. Under the
residual method, the fair value of post-contractual customer
support, training, and hosting services is deferred and
subsequently recognized as the services are performed, and the
difference between the total software arrangement fee and the
amount deferred for post-contractual customer support, hosting
and training services is allocated to software license,
implementation and custom software engineering services and
recognized using contract accounting.

The percentage-of-completion is measured by the
percentage of contract hours incurred to date compared to the
estimated total contract hours for each contract. Corillian has
the ability to make reasonable, dependable estimates relating to
the extent of progress towards completion, contract revenues and
contract costs. Any estimation process, including that used in
preparing contract accounting models, involves inherent risk.
Corillian reduces the inherent risk relating to revenue and cost
estimates in percentage-of-completion models through corporate
policy, approval and monitoring processes. Risks relating to
service delivery, usage, productivity and other factors are
considered in the estimation process. Cumulative revenues
recognized may be less or greater than cumulative costs and
profits billed at any point in time during a contracts
term. The resulting difference is recognized as revenue in
excess of billing or deferred revenue. Provisions for estimated
losses on uncompleted contracts are made in the period in which
such losses are determined.

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Results of Operations

The following table sets forth the periods
indicated, the percentage of revenues represented by certain
lines in our consolidated statements of operations.

|                            |                                                       |                         |        |      |  |      |        |      |  |  |       |      | 
|--------------------------- | ----------------------------------------------------- | ----------------------- | ------ | ---- |  | ---- | ------ | ---- |  |  | ----- | ---- | 
|                            |                                                       |                        
|                            |                                                       | Year Ended December 31,
|                            |                                                       |                        
|                            |                                                       | 1999                    |        | 2000 |  | 2001
|                            |                                                       |                         |        |      |  |     
|Revenue                     |                                                       |                         | 100.0  | %    |  |      | 100.0  | %    |  |  | 100.0 | %   
|Cost of revenues            |                                                       |                         | 86.0   |      |  |      | 72.9   |      |  |  | 56.4  |     
|                            |                                                       |                         |        |      |  |      |        |      |  |  |       |     
|Gross profit                |                                                       |                         | 14.0   |      |  |      | 27.1   |      |  |  | 43.6  |     
|                            |                                                       |                         |        |      |  |      |        |      |  |  |       |     
|Operating expenses:         |                                                       |                         |        |      |  |      |        |      |  |  |       |     
|                            | Sales and marketing                                   |                         |        | 52.7 |  |      |        | 50.6 |  |  |       | 37.3 | 
|                            | Research and development                              |                         |        | 40.9 |  |      |        | 44.0 |  |  |       | 21.8 | 
|                            | General and administrative                            |                         |        | 42.2 |  |      |        | 26.3 |  |  |       | 25.9 | 
|                            | Amortization of goodwill and other intangible
	assets |                         |        |     |  |      |        | 2.2  |  |  |       | 11.4 | 
|                            | Amortization of deferred stock-based compensation     |                         |        | 12.5 |  |      |        | 18.0 |  |  |       | 4.7  | 
|                            | Restructuring and impairment charges                  |                         |        |     |  |      |        |     |  |  |       | 33.6 | 
|                            |                                                       |                         |        |      |  |      |        |      |  |  |       |     
|Total operating expenses    |                                                       |                         | 148.3  |      |  |      | 141.1  |      |  |  | 134.7 |     
|                            |                                                       |                         |        |      |  |      |        |      |  |  |       |     
|Loss from operations        |                                                       |                         | (134.3 | )    |  |      | (114.0 | )    |  |  | (91.1 | )   
|Other income (expense), net |                                                       |                         | 5.1    |      |  |      | 6.2    |      |  |  | (0.6  | )   
|                            |                                                       |                         |        |      |  |      |        |      |  |  |       |     
|Net loss                    |                                                       |                         | (129.2 | )%   |  |      | (107.8 | )%   |  |  | (91.7 | )%  
|                            |                                                       |                         |        |      |  |      |        |      |  |  |       |     



| |                                                            
| | -----------------------------------------------------------
| | Comparison of Years Ended December 31,
	1999, 2000 and 2001

Revenue

Revenues increased from $7.7 million for
1999, to $30.9 million for 2000, to $53.8 million for
2001. The increase in revenues each year is primarily due to
software license and professional services sales due to an
increased number of new and existing customers, an increase in
our average transaction size, an increase in the number of end
users on our customers platforms and an increase in the
number of our professional services personnel working on
customer projects.

We believe that our customer growth has resulted
from greater market acceptance of our solutions by banks and
other financial institutions. This increase is also due to
increased revenues from our international operations and
Corillian Services, Inc. Our international operations generated
approximately $9.2 million of consolidated revenues for the
year ended December 31, 2001. Our international operations
generated no revenue during the years ended December 31,
1999 and 2000. Corillian Services, Inc. contributed
approximately $8.2 million to our consolidated revenues for
the year ended December 31, 2001. The operations of
Corillian Services, Inc., which we acquired on November 24,
2000, contributed approximately $1.2 million to our
consolidated revenue during the year ended December 31,
2000. We anticipate that the reduction in workforce we affected
at Corillian Services, Inc. in the fourth quarter of 2001 will
result in decreased revenues from Corillian Services, Inc. as a
percentage of total revenue in subsequent fiscal years as
compared to fiscal 2001.

Cost
of Revenue

Cost of revenues consists primarily of salaries
and related expenses for professional service personnel and
outsourced professional service providers who are responsible
for the implementation and customization of our software and for
maintenance and support personnel who are responsible for
post-contractual customer support. Cost of revenues increased
from $6.7 million for 1999, to $22.5 million for 2000,
to $30.4 million for 2001.

Gross profit increased as a percentage of
revenues from 14.0% in 1999 to 27.1% in 2000. The increase from
1999 to 2000 was primarily due to our shift to time and
materials pricing in early 2000, the cessation of

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our royalty obligation to Checkfree during the
third quarter of 2000 and our improved utilization of
professional services personnel implementing our products.


In connection with the purchase of the Voyager
technology in 1997, we agreed to pay a royalty of seven percent
of our revenue, up to a maximum of $1.75 million. Corillian
recorded $493,000, $935,000 and $0 in royalty expenses for the
years ended December 31, 1999, 2000 and 2001, respectively.
We completed our requirements under the royalty agreement during
2000 and paid the entire royalty obligation as of
December 31, 2000.

Gross profit increased as a percentage of
revenues from 27.1% in 2000 to 43.6% in 2001. This increase in
gross profit was primarily due to a reduction of third-party
integration expenses as we transitioned Corillian Services, Inc.
personnel to our implementation projects, an increase in higher
margin revenue sources such as additional seat license sales and
new license sales to existing Voyager customers, the cessation
of our royalty obligation during 2000 and improved margins on
professional services and post-contractual customer support.

Our acquisition of Corillian Services, Inc. in
November 2000 resulted in a decrease throughout 2001 in the use
of outsourced service providers to perform implementation and
customization services on our projects. We decreased the number
of our professional services personnel from 180 at
December 31, 2000, to 152 at December 31, 2001,
as a result of our restructuring actions to improve operational
efficiency during the fourth quarter of 2001. As part of these
restructuring actions, we permanently transitioned
12 Corillian Services, Inc. implementation personnel to
Corillians internal implementation staff. We expect to
continue to rely on our internal staff, including remaining
Corillian Services, Inc. personnel, to service our growing
customer base.

Operating Expenses

Sales and Marketing Expenses.Sales and marketing expenses consist
of salaries, commissions, and related expenses for personnel
involved in marketing, sales and support functions, as well as
costs associated with trade shows and other promotional
activities. Sales and marketing expenses increased from
$4.1 million for 1999, to $15.6 million for 2000, to
$20.1 million for 2001.

Sales and marketing expense increased from 1999
to 2000 primarily due to the expansion of our domestic sales and
marketing organization, and to a lesser extent, increased sales
commissions associated with higher revenues and higher expenses
associated with increased brand awareness efforts. This increase
was also due to the expansion of our international sales and
marketing infrastructure during 2000. In 2000, we incurred
direct sales and marketing expenses of $1.8 million for our
sales and marketing personnel based outside of the United
States, as compared with no direct international sales and
marketing expense during 1999. We increased the number of our
sales and marketing personnel from 36 at December 31,
1999, to 85 at December 31, 2000.

The increase in sales and marketing expense from
2000 to 2001 was primarily attributable to an increase of
$4.8 million and $1.4 million, respectively, in direct
international and Corillian Services, Inc. sales and marketing
expenses. During the years ended December 31, 2000 and
2001, we incurred direct international sales and marketing
expenses of $1.8 million and $6.6 million,
respectively. During the years ended December 31, 2000 and
2001, we incurred direct sales and marketing expenses of
$113,000 and $1.5 million, respectively, attributable to
Corillian Services, Inc. This increase in sales and marketing
expense from our international and Corillian Services, Inc.
operations was partially offset by the effect of our reduction
in workforce implemented in the fourth quarter of 2001. We
decreased the number of our sales and marketing personnel from
85 at December 31, 2000, to 67 at December 31, 2001,
mainly due to this reduction in workforce.

We expect sales and marketing expenses in
absolute dollars to decrease in the first two quarters of 2002
as a result of our reduction in workforce, as compared with
comparable periods in 2001. Although we expect sales and
marketing expenses to decrease in the near-term, these expenses
could fluctuate from period to period depending on the timing of
new marketing programs and the levels of revenues recognized in
each period.

Research and Development Expenses.Research and development expenses
consist primarily of salaries and related expenses for
engineering personnel and costs of materials and equipment
associated with the

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design, development and testing of our products.
Research and development expenses increased from
$3.2 million for 1999 to $13.6 million for 2000, and
decreased to $11.7 million for 2001.


The increase in research and development expense
from 1999 to 2000 was primarily attributable to the expansion of
our research and development organization, increased product
development efforts and, to a lesser extent, increased costs of
materials and equipment. Research and development expense for
the year ended December 31, 2000 also included
$1.3 million of research and development expense incurred
during the second quarter of 2000 related to the acquisition of
InterTech Systems, Inc. We increased the number of our research
and development personnel from 33 at December 31, 1999, to
63 at December 31, 2000.

Research and development decreased from 2000 to
2001 primarily due to $1.7 million of funded research and
development, which was recorded as a reduction of research and
development expense during the third quarter of 2001. We
slightly decreased the number of our research and development
personnel from 63 at December 31, 2000, to 62 at
December 31, 2001. Research and development expenses could
fluctuate in future periods due to the additional funding of our
research and development activities by portions of customer
contracts accounted for under the provisions of SFAS
No. 68, Research and Development Arrangements, as
well as internal funding for the development of new products and
enhancements to existing products.

General and Administrative Expenses.General and administrative expenses
consist of salaries and related expenses for executive, finance,
human resources, legal, information systems management and
administration personnel, as well as professional fees,
corporate facility expenses and other general corporate
expenses. General and administrative expenses increased from
$3.3 million for 1999, to $8.1 million for 2000, to
$14.0 million for 2001.

The increase in general and administrative
expense from 1999 to 2000 was primarily attributable to the
expansion of our general and administrative personnel from
31 as of December 31, 1999, to 57 as of
December 31, 2000. The remaining increase was attributable
to expenses necessary to support our growing domestic and
international operations. In 2000, we incurred direct general
and administrative expenses of $473,000 for our general and
administrative personnel based outside of the United States, as
compared with no direct international general and administrative
expense during 1999.

The increase in general and administrative
expense from 2000 to 2001 was primarily attributable to
increases of $1.6 million and $2.3 million,
respectively, in direct international and Corillian Services,
Inc. general and administrative expenses. During the years ended
December 31, 2000 and 2001, we incurred direct
international general and administrative expenses of $473,000
and $2.1 million, respectively. During the years ended
December 31, 2000 and 2001, we incurred direct general and
administrative expenses of $236,000 and $2.6 million,
respectively, attributable to Corillian Services, Inc. In the
near term, we expect general and administrative expenses to
decrease in absolute dollars as a result of the reduction in
workforce implemented during the fourth quarter of 2001.

Amortization of Intangible
Assets.Amortization of intangible
assets was $676,000 and $6.1 million in 2000 and 2001,
respectively, reflecting amortization of customer relationships,
workforce and goodwill acquired as part of our acquisition of
Hatcher Associates Inc. (Hatcher) in November 2000. Following
the acquisition, Corillian changed the name of Hatcher to
Corillian Services, Inc. During the fourth quarter of 2001,
Corillian recorded an impairment charge related to goodwill and
other intangible assets resulting from the acquisition of
Corillian Services, Inc. (see Note 12 to the consolidated
financial statements for further discussion).

Amortization of Deferred Stock-based
Compensation.We recorded deferred
stock-based compensation of $3.8 million and
$6.8 million in connection with stock options granted
during 1999 and 2000, respectively. This amount represents the
difference between the exercise price of stock options granted
to employees and the fair value of our common stock at the time
of the grants. In addition, this amount includes the fair value
of stock options granted to non-employees. This amount is being
amortized over the respective vesting periods of these options
on an accelerated basis. For the years ended December 31,
1999, 2000 and 2001, amortization of deferred stock-based
compensation was $967,000, $5.6 million and
$2.5 million, respectively. We expect

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amortization of approximately $990,000, $178,000
and $8,000 for fiscal years 2002, 2003 and 2004, respectively,
related to these stock options.


Restructuring and Impairment Charges.During the fourth quarter of 2001,
Corillian initiated restructuring actions to improve operational
efficiency and reduce operating expenses. Charges related to
these restructuring actions were accrued in the period in which
executive management committed to execute such actions. The
restructuring actions taken in 2001 included the reorganization
of operational and management responsibilities and closure of
Corillian Services, Inc.s (formerly Hatcher Associates
Inc.) Los Angeles headquarters. These actions resulted in a net
reduction of worldwide headcount of 125, of which 41 were
employees of Corillian Services, Inc. Restructuring charges
recorded in connection with these actions totaled
$1.3 million and consisted of severance-related costs of
$1.2 million, $90,000 in losses recognized on the sale of
equipment, and lease cancellation costs of $27,000. The
restructuring effort was substantially completed by
December 31, 2001. Of the cash restructuring charges of
$1.0 million, approximately $889,000 was paid in 2001 and
the remainder will be paid during the first half of 2002.

In accordance with SFAS No. 121, Accounting
for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed of,management reviewed the goodwill
and other intangible asset balances for impairment as Corillian
Services, Inc.s operating results and forecasted future
results indicated the carrying amount of these assets may not be
recoverable. The impairment analysis was based on projected
undiscounted cash flows, which were no longer deemed adequate to
support the carrying value of goodwill and other intangible
assets associated with the business. Consequently, in the fourth
quarter of 2001, Corillian determined that the goodwill and
other intangible assets were impaired and Corillian recorded an
impairment of the entire goodwill and other intangible assets
balance of approximately $16.8 million.

Other Income (Expense), Net

Other income (expense), net, consists primarily
of interest earned on cash and cash equivalents and short-term
investments, gains and losses recognized upon sale of our
assets, interest expense, our share of earnings and losses in
joint venture investments, and other miscellaneous items. Other
income (expense), net, increased from $399,000 for 1999 to
$1.9 million in 2000, mainly as a result of interest earned
on increased cash and cash equivalents balances as a result of
funds raised in our initial public offering in April 2000. Other
income (expense), net, decreased from $1.9 million in 2000
to a loss of $303,000 in 2001. This decrease was mainly the
result of reduced interest income earned due to lower interest
rates, our share of losses from our e-Banc investment and
decreased cash, cash equivalents and investment balances as
funds raised in Corillians initial public offering in
April 2000 continue to fund the Companys operations. This
decrease was also attributable to increased interest expense
incurred on Corillians capital lease and line of credit
obligations throughout 2001.

Income Taxes

No provision for federal and state income taxes
was recorded for 1999, 2000 or 2001 because we had incurred net
operating losses in each of those years.

As of December 31, 2001, we had federal and
state net operating loss carryforwards of approximately
$50.1 million and foreign net operating loss carryforwards
of approximately $9.1 million that expire in various
amounts beginning in 2012. We had net deferred tax assets,
including our net operating loss carryforwards and tax credits,
of $28.5 million as of December 31, 2001. A valuation
allowance has been recorded for the net deferred tax asset
balance as a result of uncertainties regarding the realization
of the asset balance. See Note 4 of the notes to the
consolidated financial statements.

Liquidity and Capital Resources

Since our inception, we have financed our
operations primarily through private sales of preferred stock
and through common stock issued in our initial public offering
and concurrent private placement. Our private sales of preferred
stock had provided aggregate net proceeds of $31.4 million
as of December 31, 2001. In April 2000, we completed our
initial public offering by issuing 4,600,000 shares of common
stock (including

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the exercise of the underwriters
over-allotment option), issued 2,625,000 shares of common stock
in a private placement that occurred concurrently with the
closing of our initial public offering, and issued a warrant to
purchase 250,000 shares of common stock. We realized
$54.7 million in proceeds from these sales, net of
discounts, commissions and issuance costs.


At December 31, 2001, we had
$17.7 million in cash, cash equivalents and investments
consisting of cash, commercial paper and taxable municipal bonds
with original maturities from 0 to 180 days. In
January 2000, we obtained a $3.0 million equipment line of
credit with a financial institution of which $1.6 million
was outstanding at December 31, 2001. In November 2000, we
obtained a $5.0 million equipment line of credit with a
financial institution of which $4.0 million was outstanding
at December 31, 2001. Under this line of credit, we must
comply with affirmative covenants that require us to maintain a
specified tangible net worth value and adjusted quick ratio. We
are currently in compliance with these covenants. If we fail to
comply with these covenants and cannot cure our noncompliance
within the periods of time identified in the agreement, we may
be required to repay all of our outstanding indebtedness under
this line of credit.

Net cash used in operating activities was
$8.6 million, $19.7 million and $26.3 million for
the years ended December 31, 1999, 2000 and 2001,
respectively. Net cash used in operations increased from 1999 to
2000 primarily as a result of an increased net loss net of
non-cash expenses including depreciation and amortization of
deferred stock-based compensation, fixed assets and intangible
assets, and an increase in our accounts receivable and revenue
in excess of billing, offset in part by growth in accounts
payable, accrued liabilities and deferred revenue. During the
year ended December 31, 2000, we also paid the remaining
$1.75 million of our royalty obligation.

The increase in net cash used in operations from
2000 to 2001 was primarily attributable to an increased net loss
net of non-cash expenses including depreciation, amortization of
deferred stock-based compensation, fixed assets and intangible
assets and impairment of long-lived assets, and a substantial
decrease in accounts payable and accrued liabilities, offset in
part by an increase in accounts receivable, revenue in excess of
billing and deferred revenue.

Net cash used in investing activities was
$13.1 million, $1.9 million and $8.2 million for
the years ended December 31, 1999, 2000 and 2001,
respectively. Net cash used in investing activities decreased
from 1999 to 2000 primarily due to net proceeds from the
maturities and purchases of short-term investments of
$10.4 million and offset by the purchases of property,
plant and equipment of $8.5 million and our
$3.0 million cash investment in e-Banc LLC. Net cash used
to acquire Hatcher Associates Inc. in November 2000 was $738,000.

The increase in net cash used in investing
activities from 2000 to 2001 was primarily attributable to
purchases of property, plant and equipment of $6.3 million
and purchase of investments of $1.9 million, coupled with
the lack of proceeds from the maturities of investments as
realized during 2000. We expect that, in the future, any cash in
excess of current requirements will be invested in short-term,
investment-grade securities. We are currently obligated to
contribute an additional $1.0 million in cash to e-Banc and
are in the process of structuring a note to be issued to e-Banc
that would extend the date for payment of this amount until
2003. We may not be successful in structuring this note and may
be required to contribute the additional funds in 2002.

Net cash provided by financing activities was
$30.0 million, $62.2 million and $1.1 million for
the years ended December 31, 1999, 2000 and 2001,
respectively. Net cash provided by financing activities
increased from 1999 to 2000 primarily due to Corillians
receipt of net proceeds of $54.7 million from the issuance
of common stock in our initial public offering in April 2000,
the private placement which occurred concurrently with the
closing of our initial public offering and the issuance of a
warrant to purchase 250,000 shares of common stock, as well as
$6.8 million from borrowings under our line of credit
arrangements. Additionally, in 2000, we received proceeds of
$753,000 and $726,000 for the issuance of common shares under
stock options and the employee stock purchase plan,
respectively. We made principal payments of $823,000 on line of
credit and capital lease obligations.

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The decrease in net cash used in financing
activities from 2000 to 2001 was primarily attributable to the
net proceeds noted above from our initial public offering,
private placement and warrant issuance in April 2000. Net cash
provided by financing activities for the year ended
December 31, 2001 consisted primarily of $2.0 million
in proceeds from the issuance of common stock and
$1.2 million from borrowings under our line of credit
arrangements, offset in part by principal payments on our line
of credit and capital lease obligations of $1.7 million and
$384,000, respectively.

In May 2000, we entered into a lease for our new
corporate headquarters, which are located in Hillsboro, Oregon,
and consist of approximately 122,000 square feet. The lease has
a term of seven years, but we have the right to renew the lease
for a term of five years on two separate occasions. Under the
terms of this lease, our monthly rent ranges from approximately
$214,000 in the first year to approximately $244,000 in the
seventh year.

In January 2001, we entered into a lease for our
new international corporate headquarters, which are located in
London, England, and consist of approximately 7,300 square feet.
This is a five-year lease, but we have the right to terminate it
at the end of each year. Under the terms of this lease, we are
obligated to pay approximately $475,000 per annum, with such
rent paid in equal quarterly installments over the term of the
lease. From time to time, we lease office space in foreign
countries on a daily or weekly basis.

We have no material financing commitments other
than obligations under our line of credit facilities and
operating and capital leases. Future capital requirements will
depend on many factors, including the timing of research and
development efforts and the expansion of our operations, both
domestically and internationally. We believe our current cash
and cash equivalents will be sufficient to meet our working
capital requirements for at least the next 12 months.
Thereafter, we may find it necessary to obtain additional equity
or debt financing. If additional financing is required, we may
not be able to raise it on acceptable terms or at all.
Additional financing could result in dilution to our current
shareholders percentage ownership. If we are unable to
obtain additional financing, we may be required to reduce the
scope of our planned research and development and sales and
marketing efforts, as well as the further development of our
infrastructure.




Item 7A.     Quantitative
and Qualitative Disclosure About Market Risk

Foreign Exchange Rate Sensitivity

We develop products in the United States and
market our products and services in the United States, and to a
lesser extent in Europe, Asia and Australia. As a result, our
financial results could be affected by factors such as changes
in foreign currency exchange rates or weak economic conditions
in foreign markets. Because nearly all of our revenue is
currently denominated in United States dollars, a strengthening
of the United States dollar could make our products less
competitive in foreign markets.

We do not use derivative financial instruments
for speculative purposes. We do not engage in exchange rate
hedging or hold or issue foreign exchange contracts for trading
purposes. We do have foreign-based operations where transactions
are denominated in foreign currencies and are subject to market
risk with respect to fluctuations in the relative value of
currencies. Currently, we have operations in Europe, Asia and
Australia and conduct transactions in various local currencies
in these locales. To date, the impact of fluctuations in the
relative fair value of other currencies has not been material.

Interest Rate Sensitivity

At December 31, 2001, we had cash, cash
equivalents and investments of $17.7 million, which consist
mainly of cash, highly liquid short-term commercial paper and
taxable municipal bonds. Our investments may be subject to
interest rate risk and will decrease in value if market interest
rates increase. A decline in interest rates over a sustained
period would reduce our interest income. Substantially all of
our revenues recognized to date have been denominated in United
States dollars and substantially all of our revenues are from
customers in the United States. Although substantially all of
our revenues have been from United States customers, we expect
to recognize more significant revenues from international
markets, and those revenues could be denominated in currency
from those international markets. As a result, our operating
results could become

31



---



##### Table of Contents



subject to significant fluctuations based upon
changes in the exchange rates of the international currencies in
those markets in relation to the United States dollar and could
be harmed.





Item 8.     Financial
Statements and Supplementary Data

(a) The following documents are filed as
part of this report:



| |                                                                                                                                
| | -------------------------------------------------------------------------------------------------------------------------------
| | 1.     Annual
	Financial Statements                                                                                            
|
| | The following consolidated financial statements
	of Corillian are filed as part of this Annual Report on
	Form 10-K as follows:

INDEX TO FINANCIAL STATEMENTS

|                                                                                                                                                            |  |      |     | 
|----------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | --- | 
|                                                                                                                                                            |  | Page
|                                                                                                                                                            |  |     
|Independent Auditors Report                                                                                                                                |  |      | F-1 | 
|Consolidated Balance Sheets as of
	December 31, 2000 and 2001                                                                                               |  |      | F-2 | 
|Consolidated Statements of Operations for the
	years ended December 31, 1999, 2000 and 2001                                                                 |  |      | F-3 | 
|Consolidated Statements of Redeemable Convertible
	Preferred Stock and Shareholders Equity (Deficit) for the
	years ended December 31, 1999, 2000 and 2001 |  |      | F-4 | 
|Consolidated Statements of Cash Flow for the
	years ended December 31, 1999, 2000 and 2001                                                                  |  |      | F-5 | 
|Notes to Consolidated Financial Statements                                                                                                                  |  |      | F-6 | 



| |                                                                                                                                                                                                    
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 2.     Financial
	Statement Schedules                                                                                                                                                              
|
| | Financial statement schedules have been omitted
	because the information required to be set forth therein is not
	applicable or is included in the notes to the Consolidated
	Financial Statements.
|
| | 3.     Selected
	Quarterly Results of Operations                                                                                                                                                   
|
| | The Selected Quarterly Results of Operations
	required by this Item 8 are included in Note 13 to the
	Consolidated Financial Statements.                                                           




Item 9.     Changes
in and Disagreements With Accountants on Accounting and
Financial Disclosure

Not applicable.




PART III




Item 10.     Directors
and Executive Officers of the Registrant

Information called for by Part III,
Item 10, is included in Corillians Proxy Statement
relating to Corillians annual meeting of shareholders to
be held on May 8, 2002, and is incorporated herein by
reference. Such Proxy Statement will be filed within
120 days of December 31, 2001, Corillians fiscal
year end.




Item 11.     Executive
Compensation

Information called for by Part III,
Item 11, is included in Corillians Proxy Statement
relating to Corillians annual meeting of shareholders to
be held on May 8, 2002, and is incorporated herein by
reference. Such Proxy Statement will be filed within
120 days of December 31, 2001, Corillians fiscal
year end.

32



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##### Table of Contents






Item 12.     Security
Ownership of Certain Beneficial Owners and
Management

Information called for by Part III,
Item 12, is included in Corillians Proxy Statement
relating to Corillians annual meeting of shareholders to
be held on May 8, 2002, and is incorporated herein by
reference. Such Proxy Statement will be filed within
120 days of December 31, 2001, Corillians fiscal
year end.




Item 13.     Certain
Relationships and Related Transactions

Information called for by Part III,
Item 13, is included in Corillians Proxy Statement
relating to Corillians annual meeting of shareholders to
be held on May 8, 2002, and is incorporated herein by
reference. Such Proxy Statement will be filed within
120 days of December 31, 2001, Corillians fiscal
year end.




PART IV




Item 14.     Exhibits,
Financial Statement Schedules, and Reports on
Form 8-K

(a) Documents filed as part of this Report:



| |                                                                                                                                                                                                    
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) Financial Statements                                                                                                                                                                           
|
| | All consolidated financial statements of the
	Company as set forth under Item 8 of this Report.                                                                                                    
|
| | (2) Financial Statement Schedules                                                                                                                                                                  
|
| | Financial statement schedules have been omitted
	because the information required to be set forth therein is not
	applicable or is included in the notes to the Consolidated
	Financial Statements.
|
| | (3) Exhibits                                                                                                                                                                                       
|
| | The exhibits listed on the accompanying index to
	exhibits immediately following the financial statement schedule
	are filed as part of, or incorporated by reference into, this
	Form 10-K.       

|        |       |             |  |                                                                                                                                                                                                                                                                                                                                                                                    
|------- | ----- | ----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |            
|No.     |       | Description
|        |       |            
|        | 2.1   |             |  | Stock Purchase Agreement, dated as of
	November 24, 2000, by and among Corillian Corporation,
	Hatcher and the Shareholders of Hatcher (incorporated by
	reference from Exhibit 2.1 of Corillians report on
	Form 8-K filed on December 7, 2000)                                                                                                                                  
|        | 2.2   |             |  | Escrow Agreement, dated as of November 24,
	2000, by and among Corillian Corporation, all of the
	Shareholders of Hatcher, Scott C. Collins, as agent and
	representative of the Shareholders of Hatcher, and ChaseMellon
	Shareholder Services, L.L.C., as escrow agent (incorporated by
	reference from Exhibit 2.2 of Corillians report on
	Form 8-K filed on December 7, 2000)
|        | 3.1   |             |  | Articles of Incorporation (incorporated by
	reference to Exhibit 3.2 of Corillians Form S-1,
	as amended, File No. 333-95513)                                                                                                                                                                                                                                                     
|        | 3.2   |             |  | Bylaws (incorporated by reference to
	Exhibit 3.4 of Corillians Form S-1, as amended,
	File No. 333-95513)                                                                                                                                                                                                                                                                        
|        | 4.1   |             |  | Form of Common Stock certificate (incorporated by
	reference to Exhibit 4.1 of Corillians Form S-1,
	as amended, File No. 333-95513)                                                                                                                                                                                                                                              
|        | 4.2   |             |  | Form of Warrant Issued to Bank One (incorporated
	by reference to Exhibit 4.2 of Corillians report on
	Form 10-K for the year ended December 31, 2000)                                                                                                                                                                                                                            
|        | 10.1* |             |  | Corillians Amended and Restated 2000 Stock
	Incentive Compensation Plan (incorporated by reference to
	Exhibit 99.2 of Corillians 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
	Corillians 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
	Corillians report on Form 10-Q for the quarter ended
	September 30, 2000)                                                                                                                                                                                                 
|        | 10.4  |             |  | Lease between Carramerica Realty Corporation and
	Corillian, dated May 22, 2000 (incorporated by reference to
	Exhibit 10.1 of Corillians report on Form 10-Q
	for the quarter ended March 31, 2000)                                                                                                                                                                              

33



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##### Table of Contents



|        |        |             |  |                                                                                                                                                                                                                                                      
|------- | ------ | ----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |        |            
|No.     |        | Description
|        |        |            
|        | 10.5   |             |  | Loan Agreement between Corillian Corporation and
	Silicon Valley Bank, dated November 9, 2000 (incorporated
	by reference to Exhibit 10.5 of Corillians report on
	Form 10-K for the year ended December 31, 2000)                                  
|        | 10.6   |             |  | Sub-underlease among Systems Union Limited,
	Corillian International Limited and Corillian Corporation, dated
	February 8, 2001 (incorporated by reference to
	Exhibit 10.6 of Corillians report on Form 10-K
	for the year ended December 31, 2000)
|        | 10.7   |             |  | Master Loan and Security Agreement between
	Corillian and Transamerica Business Credit Corporation, dated as
	of January 28, 2000 (incorporated by reference to
	Exhibit 10.7 of Corillians Form S-1, as amended,
	File No. 333-95513)              
|        | 10.8*  |             |  | Form of Stock Option Agreement with certain
	employees (incorporated by reference to Exhibit 10.9 of
	Corillians report on Form 10-Q for the quarter ended
	September 30, 2000)                                                                     
|        | 10.9   |             |  | Loan Modification Agreement between Corillian
	Corporation and Silicon Valley Bank, dated March 12, 2002                                                                                                                                             
|        | 10.10* |             |  | Employment Agreement, dated as of
	January 23, 2001, between Corillian Corporation and Alex
	Hart (incorporated by reference to Exhibit 10.12 of
	Corillians report on Form 10-K for the year ended
	December 31, 2000)                             
|        | 10.11* |             |  | Form of Indemnification Agreement between
	Corillian and its directors and executive officers (incorporated
	by reference to Exhibit 10.13 of Corillians report on
	Form 10-Q for the quarter ended March 31, 2001)                                 
|        | 21.1   |             |  | Subsidiaries of the Company (incorporated by
	reference to Exhibit 21.1 of Corillians report on
	Form 10-Q for the quarter ended June 30, 2001)                                                                                                     
|        | 23.1   |             |  | Consent of KPMG LLP, Independent Public
	Accountants                                                                                                                                                                                                 
|        | 24.1   |             |  | Power of Attorney (see page 35).                                                                                                                                                                                                                     



---



|  |                                          
|- | -----------------------------------------
|* | Management contract or compensatory plan.

(b) Reports on Form 8-K:

Amendment No. 1 to our report on
Form 8-K regarding the acquisition of Hatcher Associates
Inc. was filed with the Securities and Exchange Commission on
February 1, 2001.

A report on Form 8-K regarding
Corillians press release that announced its financial
results for the second fiscal quarter of 2001 and providing a
business outlook for the remainder of fiscal 2001 was filed with
the Securities and Exchange Commission on July 27, 2001.

A report on Form 8-K regarding
Corillians press release that announced its financial
results for the third fiscal quarter of 2001 and providing a
business outlook for the remainder of fiscal 2001 was filed with
the Securities and Exchange Commission on October 25, 2001.

A report on Form 8-K regarding
Corillians press release that announced its agreement to
settle the patent lawsuit brought by S1 Corporation against
Corillian in March 2000 was filed with the Securities and
Exchange Commission on December 12, 2001.

34



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##### Table of Contents






SIGNATURES

Pursuant to the requirements of Section 13
or 15(d) of the Securities Exchange Act of 1934, as amended, the
Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized on
March 27, 2002.



| |                      
| | ---------------------
| | CORILLIAN CORPORATION



| |    |                    
| | -- | -------------------
| | By | /s/ STEVEN SIPOWICZ

| |                              
| | -----------------------------
| |                              
| | Chief Financial Officer      
| | (Principal Financial Officer)

POWER OF ATTORNEY

Each person whose individual signature appears
below hereby authorizes and appoints Steven Sipowicz and Alex
Hart, and each of them, with full power of substitution and
resubstitution and full power to act without the other, as his
or her true and lawful attorney-in-fact and agent to act in his
or her name, place and stead and to execute in the name and on
behalf of each person, individually and in each capacity stated
below, and to file, any and all amendments to this Report, and
to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each
and every act and thing, ratifying and confirming all that said
attorneys-in-fact and agents or any of them or their or his or
her substitute or substitutes may lawfully do or cause to be
done by virtue thereof.

Pursuant to the requirements of the Securities
Exchange Act of 1934, this report has been signed below on
March 27, 2002 by the following persons on behalf of the
Registrant and in the capacities indicated.

|                                       |  |                                                                    
|-------------------------------------- |  | -------------------------------------------------------------------
|Signature                              |  | Capacities                                                         
|                                       |  |                                                                    
|/s/ TED F. SPOONERTed F. Spooner       |  | Chief Executive Officer and Director
	Principal Executive Officer  
|                                      
|/s/ STEVEN SIPOWICZSteven Sipowicz     |  | Chief Financial Officer
	Principal Financial and Accounting Officer
|                                      
|/s/ ROBERT G. BARRETTRobert G. Barrett |  | Director                                                           
|                                      
|/s/ ERIC DUNNEric Dunn                 |  | Director                                                           
|                                      
|/s/ ALEX P. HARTAlex P. Hart           |  | Director                                                           
|                                      
|/s/ EDMUND P. JENSENEdmund P. Jensen   |  | Director                                                           
|                                      
|/s/ JOHN MCCOYJohn McCoy               |  | Director                                                           

35



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##### Table of Contents



|                                         |  |           
|---------------------------------------- |  | ----------
|Signature                                |  | Capacities
|                                         |  |           
|                                        
|/s/ RAVI MOHANRavi Mohan                 |  | Director  
|                                        
|/s/ JAY N. WHIPPLE IIIJay N. Whipple III |  | Director  
|                                        
|/s/ ANDREW WHITEAndrew White             |  | Director  

36



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##### Table of Contents



INDEPENDENT AUDITORS REPORT

The Board of Directors

Corillian Corporation:


We have audited the accompanying consolidated
balance sheets of Corillian Corporation and subsidiaries as of
December 31, 2000 and 2001, and the related consolidated
statements of operations, redeemable convertible preferred stock
and shareholders equity (deficit), and cash flows for each
of the years in the three-year period ended December 31,
2001. These consolidated financial statements are the
responsibility of the Companys management. Our
responsibility is to express an opinion on these consolidated
financial statements based on our audits.

We conducted our audits in accordance with
auditing standards generally accepted in the United States of
America. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.

In our opinion, the consolidated financial
statements referred to above present fairly, in all material
respects, the financial position of Corillian Corporation and
subsidiaries as of December 31, 2000 and 2001, and the
results of their operations and their cash flows for each of the
years in the three-year period ended December 31, 2001 in
conformity with accounting principles generally accepted in the
United States of America.

-S- KPMG LLP

Portland, Oregon

February 4, 2002


F-1



---



##### Table of Contents



CORILLIAN CORPORATION






CONSOLIDATED BALANCE SHEETS


|                                                                                                                                     |                                                                                                                                                      |                                            |        |         |         |  |        |         |        | 
|------------------------------------------------------------------------------------------------------------------------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ------ | ------- | ------- |  | ------ | ------- | ------ | 
|                                                                                                                                     |                                                                                                                                                      |                                           
|                                                                                                                                     |                                                                                                                                                      | December 31,                              
|                                                                                                                                     |                                                                                                                                                      |                                           
|                                                                                                                                     |                                                                                                                                                      | 2000                                       |        | 2001   
|                                                                                                                                     |                                                                                                                                                      |                                            |        |        
|                                                                                                                                     |                                                                                                                                                      |                                           
|                                                                                                                                     |                                                                                                                                                      | (In thousands)                            
|ASSETS                                                                                                                              
|Current assets:                                                                                                                      |                                                                                                                                                      |                                            |        |         |         |  |        |        
|                                                                                                                                     | Cash and cash equivalents                                                                                                                            |                                            | $      | 49,150  |         |  | $      | 15,798  |       
|                                                                                                                                     | Investments                                                                                                                                          |                                            |        |        |         |  |        | 1,905   |       
|                                                                                                                                     | Accounts receivable                                                                                                                                  |                                            |        | 8,649   |         |  |        | 9,427   |       
|                                                                                                                                     | Other receivables                                                                                                                                    |                                            |        | 693     |         |  |        | 301     |       
|                                                                                                                                     | Revenue in excess of billings                                                                                                                        |                                            |        | 4,461   |         |  |        | 6,410   |       
|                                                                                                                                     | Prepaid expenses and deposits                                                                                                                        |                                            |        | 1,018   |         |  |        | 1,128   |       
|                                                                                                                                     |                                                                                                                                                      |                                            |        |         |         |  |        |        
|                                                                                                                                     |                                                                                                                                                      | Total current assets                       |        |         | 63,971  |  |        |         | 34,969 | 
|Property and equipment, net                                                                                                          |                                                                                                                                                      |                                            | 11,484 |         |         |  | 12,995 |        
|Intangible assets, net                                                                                                               |                                                                                                                                                      |                                            | 22,769 |         |         |  |       |        
|Investment in joint venture                                                                                                          |                                                                                                                                                      |                                            | 2,582  |         |         |  | 1,990  |        
|Other assets                                                                                                                         |                                                                                                                                                      |                                            | 352    |         |         |  | 289    |        
|                                                                                                                                     |                                                                                                                                                      |                                            |        |         |         |  |        |        
|                                                                                                                                     |                                                                                                                                                      | Total assets                               |        | $       | 101,158 |  |        | $       | 50,243 | 
|                                                                                                                                     |                                                                                                                                                      |                                            |        |         |         |  |        |        
|LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED
	STOCK
	AND SHAREHOLDERS EQUITY                                                      
|Current liabilities:                                                                                                                 |                                                                                                                                                      |                                            |        |         |         |  |        |        
|                                                                                                                                     | Accounts payable                                                                                                                                     |                                            | $      | 6,758   |         |  | $      | 2,593   |       
|                                                                                                                                     | Accrued liabilities                                                                                                                                  |                                            |        | 7,513   |         |  |        | 2,540   |       
|                                                                                                                                     | Deferred revenue                                                                                                                                     |                                            |        | 5,996   |         |  |        | 8,881   |       
|                                                                                                                                     | Current portion of capital lease obligations                                                                                                         |                                            |        | 384     |         |  |        | 414     |       
|                                                                                                                                     | Current portion of long-term debt                                                                                                                    |                                            |        | 1,599   |         |  |        | 2,185   |       
|                                                                                                                                     | Other current liabilities                                                                                                                            |                                            |        | 422     |         |  |        | 597     |       
|                                                                                                                                     |                                                                                                                                                      |                                            |        |         |         |  |        |        
|                                                                                                                                     |                                                                                                                                                      | Total current liabilities                  |        |         | 22,672  |  |        |         | 17,210 | 
|Capital lease obligations, less current portion                                                                                      |                                                                                                                                                      |                                            | 733    |         |         |  | 319    |        
|Long-term debt, less current portion                                                                                                 |                                                                                                                                                      |                                            | 4,532  |         |         |  | 3,411  |        
|Other long-term liabilities                                                                                                          |                                                                                                                                                      |                                            | 628    |         |         |  | 1,199  |        
|                                                                                                                                     |                                                                                                                                                      |                                            |        |         |         |  |        |        
|                                                                                                                                     |                                                                                                                                                      | Total liabilities                          |        |         | 28,565  |  |        |         | 22,139 | 
|                                                                                                                                     |                                                                                                                                                      |                                            |        |         |         |  |        |        
|Redeemable convertible preferred stock, no par
	value; no shares issued and outstanding at December 31,
	2000 and 2001, respectively |                                                                                                                                                      |                                            |       |         |         |  |       |        
|                                                                                                                                     |                                                                                                                                                      |                                            |        |         |         |  |        |        
|Commitments and contingencies                                                                                                        |                                                                                                                                                      |                                            |        |         |         |  |        |        
|Shareholders equity:                                                                                                                |                                                                                                                                                      |                                            |        |         |         |  |        |        
|                                                                                                                                     | Preferred stock, no par value; 40,000 shares
	authorized; no shares issued and outstanding at
	December 31, 2000 and 2001, respectively              |                                            |        |        |         |  |        |        |       
|                                                                                                                                     | Common stock, no par value; 150,000 shares
	authorized; 34,137 and 35,038 shares issued and outstanding at
	December 31, 2000 and 2001, respectively |                                            |        | 123,203 |         |  |        | 125,069 |       
|                                                                                                                                     | Deferred stock-based compensation                                                                                                                    |                                            |        | (4,164  | )       |  |        | (1,169  | )     
|                                                                                                                                     | Accumulated other comprehensive income (loss)                                                                                                        |                                            |        | 30      |         |  |        | (19     | )     
|                                                                                                                                     | Accumulated deficit                                                                                                                                  |                                            |        | (46,476 | )       |  |        | (95,777 | )     
|                                                                                                                                     |                                                                                                                                                      |                                            |        |         |         |  |        |        
|                                                                                                                                     |                                                                                                                                                      | Total shareholders equity                 |        |         | 72,593  |  |        |         | 28,104 | 
|                                                                                                                                     |                                                                                                                                                      |                                            |        |         |         |  |        |        
|                                                                                                                                     |                                                                                                                                                      | Total liabilities and shareholders equity |        | $       | 101,158 |  |        | $       | 50,243 | 
|                                                                                                                                     |                                                                                                                                                      |                                            |        |         |         |  |        |        

See accompanying notes to consolidated financial
statements.

F-2



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##### Table of Contents



CORILLIAN CORPORATION






CONSOLIDATED STATEMENTS OF
OPERATIONS


|                                                                                                                                            |                                                                                                                                                          |                                            |       |       |         |      |        |        |         |   |        |        |         |  
|------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ----- | ----- | ------- | ---- | ------ | ------ | ------- | - | ------ | ------ | ------- | -
|                                                                                                                                            |                                                                                                                                                          |                                           
|                                                                                                                                            |                                                                                                                                                          | Year Ended December 31,                   
|                                                                                                                                            |                                                                                                                                                          |                                           
|                                                                                                                                            |                                                                                                                                                          | 1999                                       |       | 2000  |         | 2001
|                                                                                                                                            |                                                                                                                                                          |                                            |       |       |         |     
|                                                                                                                                            |                                                                                                                                                          |                                           
|                                                                                                                                            |                                                                                                                                                          | (In thousands, except per share data)     
|Revenues                                                                                                                                    |                                                                                                                                                          | $                                          | 7,736 |       |         | $    | 30,853 |        |         | $ | 53,848 |       
|Cost of revenues, excluding $55, $587 and $342 in
	1999, 2000 and 2001, respectively, of amortization of deferred
	stock-based compensation |                                                                                                                                                          |                                            | 6,651 |       |         |      | 22,499 |        |         |   | 30,357 |       
|                                                                                                                                            |                                                                                                                                                          |                                            |       |       |         |      |        |        |         |   |        |       
|                                                                                                                                            |                                                                                                                                                          | Gross profit                               |       |       | 1,085   |      |        |        | 8,354   |   |        |        | 23,491  |  
|                                                                                                                                            |                                                                                                                                                          |                                            |       |       |         |      |        |        |         |   |        |       
|Operating expenses:                                                                                                                         |                                                                                                                                                          |                                            |       |       |         |      |        |        |         |   |        |       
|                                                                                                                                            | Sales and marketing, excluding $432, $3,270 and
	$1,319 in 1999, 2000 and 2001, respectively, of amortization of
	deferred stock-based compensation      |                                            |       | 4,074 |         |      |        | 15,603 |         |   |        | 20,096 |        
|                                                                                                                                            | Research and development, excluding $39, $448 and
	$210 in 1999, 2000 and 2001, respectively, of amortization of
	deferred stock-based compensation      |                                            |       | 3,165 |         |      |        | 13,573 |         |   |        | 11,721 |        
|                                                                                                                                            | General and administrative, excluding $441,
	$1,256 and $635 in 1999, 2000 and 2001, respectively, of
	amortization of deferred stock-based compensation |                                            |       | 3,272 |         |      |        | 8,110  |         |   |        | 13,950 |        
|                                                                                                                                            | Amortization of goodwill and other intangible
	assets                                                                                                    |                                            |       |      |         |      |        | 676    |         |   |        | 6,119  |        
|                                                                                                                                            | Amortization of deferred stock-based compensation                                                                                                        |                                            |       | 967   |         |      |        | 5,561  |         |   |        | 2,506  |        
|                                                                                                                                            | Restructuring and impairment charges                                                                                                                     |                                            |       |      |         |      |        |       |         |   |        | 18,097 |        
|                                                                                                                                            |                                                                                                                                                          |                                            |       |       |         |      |        |        |         |   |        |       
|                                                                                                                                            |                                                                                                                                                          | Total operating expenses                   |       |       | 11,478  |      |        |        | 43,523  |   |        |        | 72,489  |  
|                                                                                                                                            |                                                                                                                                                          |                                            |       |       |         |      |        |        |         |   |        |       
|                                                                                                                                            |                                                                                                                                                          | Loss from operations                       |       |       | (10,393 | )    |        |        | (35,169 | ) |        |        | (48,998 | )
|                                                                                                                                            |                                                                                                                                                          |                                            |       |       |         |      |        |        |         |   |        |       
|Other income (expense):                                                                                                                     |                                                                                                                                                          |                                            |       |       |         |      |        |        |         |   |        |       
|                                                                                                                                            | Interest income                                                                                                                                          |                                            |       | 311   |         |      |        | 2,793  |         |   |        | 1,229  |        
|                                                                                                                                            | Interest expense                                                                                                                                         |                                            |       | (6    | )       |      |        | (435   | )       |   |        | (818   | )      
|                                                                                                                                            | Other income (expense), net                                                                                                                              |                                            |       | 94    |         |      |        | (444   | )       |   |        | (714   | )      
|                                                                                                                                            |                                                                                                                                                          |                                            |       |       |         |      |        |        |         |   |        |       
|                                                                                                                                            |                                                                                                                                                          | Total other income (expense)               |       |       | 399     |      |        |        | 1,914   |   |        |        | (303    | )
|                                                                                                                                            |                                                                                                                                                          |                                            |       |       |         |      |        |        |         |   |        |       
|                                                                                                                                            |                                                                                                                                                          | Net loss                                   |       |       | (9,994  | )    |        |        | (33,255 | ) |        |        | (49,301 | )
|Redeemable convertible preferred stock accretion                                                                                            |                                                                                                                                                          |                                            | (102  | )     |         |      | (100   | )      |         |   |       |       
|                                                                                                                                            |                                                                                                                                                          |                                            |       |       |         |      |        |        |         |   |        |       
|                                                                                                                                            |                                                                                                                                                          | Net loss attributed to common shareholders |       | $     | (10,096 | )    |        | $      | (33,355 | ) |        | $      | (49,301 | )
|                                                                                                                                            |                                                                                                                                                          |                                            |       |       |         |      |        |        |         |   |        |       
|Basic and diluted net loss per share                                                                                                        |                                                                                                                                                          | $                                          | (1.37 | )     |         | $    | (1.33  | )      |         | $ | (1.42  | )     
|Shares used in computing basic and diluted net
	loss per share                                                                              |                                                                                                                                                          |                                            | 7,399 |       |         |      | 25,106 |        |         |   | 34,645 |       

See accompanying notes to consolidated financial
statements.

F-3



---



##### Table of Contents



CORILLIAN CORPORATION

CONSOLIDATED STATEMENTS OF REDEEMABLE
CONVERTIBLE PREFERRED STOCK

AND SHAREHOLDERS EQUITY
(DEFICIT)


|                                                                      |  |                                   |             |                 |  |                                |         |        |  |        |            |        |  |   |      |   |  |  |            |   |  |   |         |  
|--------------------------------------------------------------------- |  | --------------------------------- | ----------- | --------------- |  | ------------------------------ | ------- | ------ |  | ------ | ---------- | ------ |  | - | ---- | - |  |  | ---------- | - |  | - | ------- | -
|                                                                      |  |                                   |             |                 |  |                               
|                                                                      |  |                                   |             |                 |  | Shareholders Equity (Deficit)
|                                                                      |  |                                   |             |                 |  |                               
|                                                                      |  |                                   |             |                 |  |                               
|                                                                      |  | Redeemable Convertible            |             | Convertible     |  |                               
|                                                                      |  | Preferred Stock                   |             | Preferred Stock |  | Common Stock                  
|                                                                      |  |                                   |             |                 |  |                               
|                                                                      |  | Shares                            |             | Amount          |  | Shares                         |         | Amount |  | Shares |            | Amount
|                                                                      |  |                                   |             |                 |  |                                |         |        |  |        |            |       
|                                                                      |  |                                  
|                                                                      |  | (In thousands, except share data)
|Balance, December 31, 1998                                            |  |                                   |            |                 |  | $                              |        |        |  |        | 1,729,730  |        |  | $ | 960  |   |  |  | 7,427,550  |   |  | $ | 1,114   |  
|Exercise of common stock options                                      |  |                                   |            |                 |  |                                |        |        |  |        |           |        |  |   |     |   |  |  | 132,667    |   |  |   | 70      |  
|Conversion of Series A convertible preferred
	stock into common stock |  |                                   |            |                 |  |                                |        |        |  |        | (90,000    | )      |  |   | (50  | ) |  |  | 90,000     |   |  |   | 50      |  
|Purchase of common stock                                              |  |                                   |            |                 |  |                                |        |        |  |        |           |        |  |   |     |   |  |  | (396,667   | ) |  |   | (1,494  | )
|Issuance of Series B redeemable convertible
	preferred stock, net     |  |                                   | 7,817,516   |                 |  |                                | 6,983   |        |  |        |           |        |  |   |     |   |  |  |           |   |  |   |        |  
|Issuance of Series C redeemable convertible
	preferred stock, net     |  |                                   | 6,905,707   |                 |  |                                | 24,416  |        |  |        |           |        |  |   |     |   |  |  |           |   |  |   |        |  
|Accretion of redeemable convertible preferred
	stock                  |  |                                   |            |                 |  |                                | 102     |        |  |        |           |        |  |   |     |   |  |  |           |   |  |   | (102    | )
|Receipts on stock subscriptions receivable                            |  |                                   |            |                 |  |                                |        |        |  |        |           |        |  |   |     |   |  |  |           |   |  |   |        |  
|Deferred stock- based compensation                                    |  |                                   |            |                 |  |                                |        |        |  |        |           |        |  |   |     |   |  |  |           |   |  |   | 3,844   |  
|Amortization of deferred stock-based compensation                     |  |                                   |            |                 |  |                                |        |        |  |        |           |        |  |   |     |   |  |  |           |   |  |   |        |  
|Net loss                                                              |  |                                   |            |                 |  |                                |        |        |  |        |           |        |  |   |     |   |  |  |           |   |  |   |        |  
|                                                                      |  |                                   |             |                 |  |                                |         |        |  |        |            |        |  |   |      |   |  |  |            |   |  |   |         |  
|Balance, December 31, 1999                                            |  |                                   | 14,723,223  |                 |  | $                              | 31,501  |        |  |        | 1,639,730  |        |  |   | 910  |   |  |  | 7,253,550  |   |  |   | 3,482   |  
|Issuance of common stock in initial public
	offering, net             |  |                                   |            |                 |  |                                |        |        |  |        |           |        |  |   |     |   |  |  | 7,225,000  |   |  |   | 54,674  |  
|Issuance of common stock in business combinations                     |  |                                   |            |                 |  |                                |        |        |  |        |           |        |  |   |     |   |  |  | 1,967,824  |   |  |   | 24,186  |  
|Conversion of Series A convertible preferred
	stock                   |  |                                   |            |                 |  |                                |        |        |  |        | (1,639,730 | )      |  |   | (910 | ) |  |  | 1,639,730  |   |  |   | 910     |  
|Conversion of Series B and C redeemable
	convertible preferred stock  |  |                                   | (14,723,223 | )               |  |                                | (31,601 | )      |  |        |           |        |  |   |     |   |  |  | 14,723,223 |   |  |   | 31,601  |  
|Exercise of common stock options                                      |  |                                   |            |                 |  |                                |        |        |  |        |           |        |  |   |     |   |  |  | 1,220,160  |   |  |   | 753     |  
|Issuance of common shares under employee stock
	purchase plan         |  |                                   |            |                 |  |                                |        |        |  |        |           |        |  |   |     |   |  |  | 90,786     |   |  |   | 726     |  
|Issuance of common stock for services                                 |  |                                   |            |                 |  |                                |        |        |  |        |           |        |  |   |     |   |  |  | 16,667     |   |  |   | 123     |  
|Accretion of redeemable convertible preferred
	stock                  |  |                                   |            |                 |  |                                | 100     |        |  |        |           |        |  |   |     |   |  |  |           |   |  |   | (100    | )
|Deferred stock- based compensation                                    |  |                                   |            |                 |  |                                |        |        |  |        |           |        |  |   |     |   |  |  |           |   |  |   | 6,848   |  
|Amortization of deferred stock-based compensation                     |  |                                   |            |                 |  |                                |        |        |  |        |           |        |  |   |     |   |  |  |           |   |  |   |        |  
|Foreign currency translation                                          |  |                                   |            |                 |  |                                |        |        |  |        |           |        |  |   |     |   |  |  |           |   |  |   |        |  
|Net loss                                                              |  |                                   |            |                 |  |                                |        |        |  |        |           |        |  |   |     |   |  |  |           |   |  |   |        |  
|                                                                      |  |                                   |             |                 |  |                                |         |        |  |        |            |        |  |   |      |   |  |  |            |   |  |   |         |  
|Balance, December 31, 2000                                            |  |                                   |            |                 |  | $                              |        |        |  |        |           |        |  | $ |     |   |  |  | 34,136,940 |   |  | $ | 123,203 |  
|Issuance of common stock in business combinations                     |  |                                   |            |                 |  |                                |        |        |  |        |           |        |  |   |     |   |  |  | 24,642     |   |  |   | 306     |  
|Exercise of common stock options                                      |  |                                   |            |                 |  |                                |        |        |  |        |           |        |  |   |     |   |  |  | 608,573    |   |  |   | 683     |  
|Issuance of common shares under employee stock
	purchase plan         |  |                                   |            |                 |  |                                |        |        |  |        |           |        |  |   |     |   |  |  | 267,561    |   |  |   | 1,366   |  
|Deferred stock- based compensation                                    |  |                                   |            |                 |  |                                |        |        |  |        |           |        |  |   |     |   |  |  |           |   |  |   | (489    | )
|Amortization of deferred stock-based compensation                     |  |                                   |            |                 |  |                                |        |        |  |        |           |        |  |   |     |   |  |  |           |   |  |   |        |  
|Foreign currency translation                                          |  |                                   |            |                 |  |                                |        |        |  |        |           |        |  |   |     |   |  |  |           |   |  |   |        |  
|Net loss                                                              |  |                                   |            |                 |  |                                |        |        |  |        |           |        |  |   |     |   |  |  |           |   |  |   |        |  
|                                                                      |  |                                   |             |                 |  |                                |         |        |  |        |            |        |  |   |      |   |  |  |            |   |  |   |         |  
|Balance, December 31, 2001                                            |  |                                   |            |                 |  | $                              |        |        |  |        |           |        |  | $ |     |   |  |  | 35,037,716 |   |  | $ | 125,069 |  
|                                                                      |  |                                   |             |                 |  |                                |         |        |  |        |            |        |  |   |      |   |  |  |            |   |  |   |         |  

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                                                                      |  |                                   |     |              |  |               |        |             |  |               |     |   |  |   |         |   |  |   |         |  
|--------------------------------------------------------------------- |  | --------------------------------- | --- | ------------ |  | ------------- | ------ | ----------- |  | ------------- | --- | - |  | - | ------- | - |  | - | ------- | -
|                                                                      |  |                                  
|                                                                      |  | Shareholders Equity (Deficit)   
|                                                                      |  |                                  
|                                                                      |  |                                   |     | Accumulated  |  |              
|                                                                      |  |                                   |     | Other        |  |               |        | Total      
|                                                                      |  | Stock                             |     | Deferred     |  | Comprehensive |        |             |  | Shareholders
|                                                                      |  | Subscriptions                     |     | Stock-based  |  | Income        |        | Accumulated |  | Equity       
|                                                                      |  | Receivable                        |     | Compensation |  | (Loss)        |        | Deficit     |  | (Deficit)    
|                                                                      |  |                                   |     |              |  |               |        |             |  |              
|                                                                      |  |                                  
|                                                                      |  | (In thousands, except share data)
|Balance, December 31, 1998                                            |  | $                                 | (12 | )            |  | $             |       |             |  | $             |    |   |  | $ | (3,227  | ) |  | $ | (1,165  | )
|Exercise of common stock options                                      |  |                                   |    |              |  |               |       |             |  |               |    |   |  |   |        |   |  |   | 70      |  
|Conversion of Series A convertible preferred
	stock into common stock |  |                                   |    |              |  |               |       |             |  |               |    |   |  |   |        |   |  |   |        |  
|Purchase of common stock                                              |  |                                   |    |              |  |               |       |             |  |               |    |   |  |   |        |   |  |   | (1,494  | )
|Issuance of Series B redeemable convertible
	preferred stock, net     |  |                                   |    |              |  |               |       |             |  |               |    |   |  |   |        |   |  |   |        |  
|Issuance of Series C redeemable convertible
	preferred stock, net     |  |                                   |    |              |  |               |       |             |  |               |    |   |  |   |        |   |  |   |        |  
|Accretion of redeemable convertible preferred
	stock                  |  |                                   |    |              |  |               |       |             |  |               |    |   |  |   |        |   |  |   | (102    | )
|Receipts on stock subscriptions receivable                            |  |                                   | 12  |              |  |               |       |             |  |               |    |   |  |   |        |   |  |   | 12      |  
|Deferred stock- based compensation                                    |  |                                   |    |              |  |               | (3,844 | )           |  |               |    |   |  |   |        |   |  |   |        |  
|Amortization of deferred stock-based compensation                     |  |                                   |    |              |  |               | 967    |             |  |               |    |   |  |   |        |   |  |   | 967     |  
|Net loss                                                              |  |                                   |    |              |  |               |       |             |  |               |    |   |  |   | (9,994  | ) |  |   | (9,994  | )
|                                                                      |  |                                   |     |              |  |               |        |             |  |               |     |   |  |   |         |   |  |   |         |  
|Balance, December 31, 1999                                            |  |                                   |    |              |  |               | (2,877 | )           |  |               |    |   |  |   | (13,221 | ) |  |   | (11,706 | )
|Issuance of common stock in initial public
	offering, net             |  |                                   |    |              |  |               |       |             |  |               |    |   |  |   |        |   |  |   | 54,674  |  
|Issuance of common stock in business combinations                     |  |                                   |    |              |  |               |       |             |  |               |    |   |  |   |        |   |  |   | 24,186  |  
|Conversion of Series A convertible preferred
	stock                   |  |                                   |    |              |  |               |       |             |  |               |    |   |  |   |        |   |  |   |        |  
|Conversion of Series B and C redeemable
	convertible preferred stock  |  |                                   |    |              |  |               |       |             |  |               |    |   |  |   |        |   |  |   | 31,601  |  
|Exercise of common stock options                                      |  |                                   |    |              |  |               |       |             |  |               |    |   |  |   |        |   |  |   | 753     |  
|Issuance of common shares under employee stock
	purchase plan         |  |                                   |    |              |  |               |       |             |  |               |    |   |  |   |        |   |  |   | 726     |  
|Issuance of common stock for services                                 |  |                                   |    |              |  |               |       |             |  |               |    |   |  |   |        |   |  |   | 123     |  
|Accretion of redeemable convertible preferred
	stock                  |  |                                   |    |              |  |               |       |             |  |               |    |   |  |   |        |   |  |   | (100    | )
|Deferred stock- based compensation                                    |  |                                   |    |              |  |               | (6,848 | )           |  |               |    |   |  |   |        |   |  |   |        |  
|Amortization of deferred stock-based compensation                     |  |                                   |    |              |  |               | 5,561  |             |  |               |    |   |  |   |        |   |  |   | 5,561   |  
|Foreign currency translation                                          |  |                                   |    |              |  |               |       |             |  |               | 30  |   |  |   |        |   |  |   | 30      |  
|Net loss                                                              |  |                                   |    |              |  |               |       |             |  |               |    |   |  |   | (33,255 | ) |  |   | (33,255 | )
|                                                                      |  |                                   |     |              |  |               |        |             |  |               |     |   |  |   |         |   |  |   |         |  
|Balance, December 31, 2000                                            |  | $                                 |    |              |  | $             | (4,164 | )           |  | $             | 30  |   |  | $ | (46,476 | ) |  | $ | 72,593  |  
|Issuance of common stock in business combinations                     |  |                                   |    |              |  |               |       |             |  |               |    |   |  |   |        |   |  |   | 306     |  
|Exercise of common stock options                                      |  |                                   |    |              |  |               |       |             |  |               |    |   |  |   |        |   |  |   | 683     |  
|Issuance of common shares under employee stock
	purchase plan         |  |                                   |    |              |  |               |       |             |  |               |    |   |  |   |        |   |  |   | 1,366   |  
|Deferred stock- based compensation                                    |  |                                   |    |              |  |               | 489    |             |  |               |    |   |  |   |        |   |  |   |        |  
|Amortization of deferred stock-based compensation                     |  |                                   |    |              |  |               | 2,506  |             |  |               |    |   |  |   |        |   |  |   | 2,506   |  
|Foreign currency translation                                          |  |                                   |    |              |  |               |       |             |  |               | (49 | ) |  |   |        |   |  |   | (49     | )
|Net loss                                                              |  |                                   |    |              |  |               |       |             |  |               |    |   |  |   | (49,301 | ) |  |   | (49,301 | )
|                                                                      |  |                                   |     |              |  |               |        |             |  |               |     |   |  |   |         |   |  |   |         |  
|Balance, December 31, 2001                                            |  | $                                 |    |              |  | $             | (1,169 | )           |  | $             | (19 | ) |  | $ | (95,777 | ) |  | $ | 28,104  |  
|                                                                      |  |                                   |     |              |  |               |        |             |  |               |     |   |  |   |         |   |  |   |         |  

See accompanying notes to consolidated financial
statements.

F-4



---



##### Table of Contents



CORILLIAN CORPORATION

CONSOLIDATED STATEMENTS OF CASH
FLOWS

|                                                                          |                                                                              |                                                                    |                                             |                                                                    |     |        |         |         |        |        |         |         |        |        |         |  
|------------------------------------------------------------------------- | ---------------------------------------------------------------------------- | ------------------------------------------------------------------ | ------------------------------------------- | ------------------------------------------------------------------ | --- | ------ | ------- | ------- | ------ | ------ | ------- | ------- | ------ | ------ | ------- | -
|                                                                          |                                                                              |                                                                   
|                                                                          |                                                                              | Year Ended December 31,                                           
|                                                                          |                                                                              |                                                                   
|                                                                          |                                                                              | 1999                                                               |                                             | 2000                                                               |     | 2001  
|                                                                          |                                                                              |                                                                    |                                             |                                                                    |     |       
|                                                                          |                                                                              |                                                                   
|                                                                          |                                                                              | (In thousands)                                                    
|Cash flows from operating activities:                                     |                                                                              |                                                                    |                                             |                                                                    |     |        |         |         |        |        |         |        
|                                                                          | Net loss                                                                     |                                                                    | $                                           | (9,994                                                             | )   |        | $       | (33,255 | )      |        | $       | (49,301 | )     
|                                                                          | Adjustments to reconcile net loss to net cash
	used in operating activities: |                                                                    |                                             |                                                                    |     |        |         |         |        |        |         |         |       
|                                                                          |                                                                              | Depreciation and amortization                                      |                                             |                                                                    | 278 |        |         |         | 1,983  |        |         |         | 4,666  |       
|                                                                          |                                                                              | Amortization of deferred stock-based compensation                  |                                             |                                                                    | 967 |        |         |         | 5,561  |        |         |         | 2,506  |       
|                                                                          |                                                                              | Amortization of goodwill and other intangible
	assets              |                                             |                                                                    |    |        |         |         | 676    |        |         |         | 6,119  |       
|                                                                          |                                                                              | Impairment of long-lived assets                                    |                                             |                                                                    |    |        |         |         |       |        |         |         | 16,764 |       
|                                                                          |                                                                              | Other non-cash expenses                                            |                                             |                                                                    |    |        |         |         | 1,737  |        |         |         | 571    |       
|                                                                          |                                                                              | Issuance of common stock for services                              |                                             |                                                                    |    |        |         |         | 123    |        |         |         |       |       
|                                                                          |                                                                              | Equity in losses of joint venture                                  |                                             |                                                                    |    |        |         |         | 418    |        |         |         | 592    |       
|                                                                          |                                                                              | (Gain) loss on sale of assets                                      |                                             |                                                                    | (96 | )      |         |         |       |        |         |         | 90     |       
|                                                                          |                                                                              | Changes in operating assets and liabilities, net
	of acquisitions: |                                             |                                                                    |     |        |         |         |        |        |         |         |        |       
|                                                                          |                                                                              |                                                                    | Accounts receivable                         |                                                                    |     | (2,467 | )       |         |        | (3,121 | )       |         |        | (806   | )      
|                                                                          |                                                                              |                                                                    | Other receivables                           |                                                                    |     | (259   | )       |         |        | (397   | )       |         |        | 386    |        
|                                                                          |                                                                              |                                                                    | Revenue in excess of billings               |                                                                    |     | (363   | )       |         |        | (4,098 | )       |         |        | (1,949 | )      
|                                                                          |                                                                              |                                                                    | Prepaid expenses, deposits and other assets |                                                                    |     | (548   | )       |         |        | (495   | )       |         |        | (161   | )      
|                                                                          |                                                                              |                                                                    | Accounts payable and accrued liabilities    |                                                                    |     | 3,387  |         |         |        | 6,555  |         |         |        | (8,833 | )      
|                                                                          |                                                                              |                                                                    | Deferred revenue                            |                                                                    |     | 460    |         |         |        | 4,229  |         |         |        | 2,885  |        
|                                                                          |                                                                              |                                                                    | Other liabilities                           |                                                                    |     |       |         |         |        | 412    |         |         |        | 175    |        
|                                                                          |                                                                              |                                                                    |                                             |                                                                    |     |        |         |         |        |        |         |        
|                                                                          |                                                                              |                                                                    |                                             | Net cash used in operating activities                              |     |        | (8,635  | )       |        |        | (19,672 | )       |        |        | (26,296 | )
|                                                                          |                                                                              |                                                                    |                                             |                                                                    |     |        |         |         |        |        |         |        
|Cash flows from investing activities:                                     |                                                                              |                                                                    |                                             |                                                                    |     |        |         |         |        |        |         |        
|                                                                          | Net proceeds from the purchase and sale of
	property and equipment           |                                                                    |                                             | (2,750                                                             | )   |        |         | (8,482  | )      |        |         | (6,259  | )     
|                                                                          | Purchase of investments                                                      |                                                                    |                                             | (10,357                                                            | )   |        |         | (5,413  | )      |        |         | (1,905  | )     
|                                                                          | Proceeds from the maturities of investments                                  |                                                                    |                                             |                                                                   |     |        |         | 15,770  |        |        |         |        |       
|                                                                          | Net cash used in business acquisitions                                       |                                                                    |                                             |                                                                   |     |        |         | (738    | )      |        |         |        |       
|                                                                          | Investment in joint venture                                                  |                                                                    |                                             |                                                                   |     |        |         | (3,000  | )      |        |         |        |       
|                                                                          |                                                                              |                                                                    |                                             |                                                                    |     |        |         |         |        |        |         |        
|                                                                          |                                                                              |                                                                    |                                             | Net cash used in investing activities                              |     |        | (13,107 | )       |        |        | (1,863  | )       |        |        | (8,164  | )
|                                                                          |                                                                              |                                                                    |                                             |                                                                    |     |        |         |         |        |        |         |        
|Cash flows from financing activities:                                     |                                                                              |                                                                    |                                             |                                                                    |     |        |         |         |        |        |         |        
|                                                                          | Proceeds from issuance of preferred stock, net of
	issuance costs            |                                                                    |                                             | 31,399                                                             |     |        |         |        |        |        |         |        |       
|                                                                          | Proceeds from the issuance of common stock, net
	of issuance costs           |                                                                    |                                             | 70                                                                 |     |        |         | 56,153  |        |        |         | 2,049   |       
|                                                                          | Proceeds from line of credit borrowings, net                                 |                                                                    |                                             |                                                                   |     |        |         | 6,131   |        |        |         | (535    | )     
|                                                                          | Repurchase of common stock                                                   |                                                                    |                                             | (1,494                                                             | )   |        |         |        |        |        |         |        |       
|                                                                          | Receipts on stock subscriptions receivable                                   |                                                                    |                                             | 12                                                                 |     |        |         |        |        |        |         |        |       
|                                                                          | Principal payments on capital lease obligations                              |                                                                    |                                             | (33                                                                | )   |        |         | (119    | )      |        |         | (384    | )     
|                                                                          |                                                                              |                                                                    |                                             |                                                                    |     |        |         |         |        |        |         |        
|                                                                          |                                                                              |                                                                    |                                             | Net cash provided by financing activities                          |     |        | 29,954  |         |        |        | 62,165  |         |        |        | 1,130   |  
|                                                                          |                                                                              |                                                                    |                                             |                                                                    |     |        |         |         |        |        |         |        
|                                                                          |                                                                              |                                                                    |                                             | Effect of exchange rate fluctuations on cash and
	cash equivalents |     |        |        |         |        |        | 18      |         |        |        | (22     | )
|                                                                          |                                                                              |                                                                    |                                             |                                                                    |     |        |         |         |        |        |         |        
|                                                                          |                                                                              |                                                                    |                                             | Increase (decrease) in cash and cash
	equivalents                  |     |        | 8,212   |         |        |        | 40,648  |         |        |        | (33,352 | )
|Cash and cash equivalents at beginning of year                            |                                                                              |                                                                    | 290                                         |                                                                    |     |        | 8,502   |         |        |        | 49,150  |        
|                                                                          |                                                                              |                                                                    |                                             |                                                                    |     |        |         |         |        |        |         |        
|Cash and cash equivalents at end of year                                  |                                                                              | $                                                                  | 8,502                                       |                                                                    |     | $      | 49,150  |         |        | $      | 15,798  |        
|                                                                          |                                                                              |                                                                    |                                             |                                                                    |     |        |         |         |        |        |         |        
|Supplemental disclosures of cash flow information:                        |                                                                              |                                                                    |                                             |                                                                    |     |        |         |         |        |        |         |        
|                                                                          | Cash paid during the period for:                                             |                                                                    |                                             |                                                                    |     |        |         |         |        |        |         |         |       
|                                                                          |                                                                              | Interest                                                           |                                             | $                                                                  | 6   |        |         | $       | 435    |        |         | $       | 818    |       
|                                                                          |                                                                              | Taxes                                                              |                                             |                                                                    |    |        |         |         | 16     |        |         |         | 228    |       
|Supplemental disclosures of non-cash investing
	and financing activities: |                                                                              |                                                                    |                                             |                                                                    |     |        |         |         |        |        |         |        
|                                                                          | Property and equipment acquired through capital
	leases                      |                                                                    |                                             | 276                                                                |     |        |         | 993     |        |        |         |        |       
|                                                                          | Recorded through business combinations:                                      |                                                                    |                                             |                                                                    |     |        |         |         |        |        |         |         |       
|                                                                          |                                                                              | Assets                                                             |                                             |                                                                    |    |        |         |         | 3,697  |        |         |         |       |       
|                                                                          |                                                                              | Liabilities                                                        |                                             |                                                                    |    |        |         |         | 1,447  |        |         |         |       |       
|                                                                          |                                                                              | Common shares                                                      |                                             |                                                                    |    |        |         |         | 24,186 |        |         |         | 306    |       

See accompanying notes to consolidated financial
statements.

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##### Table of Contents



CORILLIAN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

(1) Description of Company

Corillian Corporation was incorporated in April
1997. Corillian is a provider of solutions that enable banks,
brokers, financial portals and other financial service providers
to rapidly deploy Internet-based financial services.
Corillians solutions allow consumers to conduct financial
transactions, view personal and market financial information,
pay bills and access other financial services on the Internet.
Corillian Voyager is a software platform combined with a set of
applications for Internet banking, electronic bill presentment
and payment, targeted marketing, data aggregation and online
customer relationship management. Corillian also offers a
variety of services to support its customers throughout the
process of implementing and maintaining its solutions.

(2) Summary of Significant Accounting
Policies

(a) Critical
Accounting Policies and Estimates

The preparation of consolidated financial
statements requires Corillian to make estimates and judgments
that affect the reported amounts of assets, liabilities,
revenues and expenses, and related disclosure of contingent
assets and liabilities. On an on-going basis, Corillian
evaluates its estimates, including those related to revenue
recognition, bad debts, investments, intangible assets, income
taxes, financing operations, restructuring, and contingencies
and litigation. Corillian bases its estimates on historical
experience and on various other assumptions that are believed to
be reasonable under the circumstances, the results of which form
the basis for making judgments about the carrying values of
assets and liabilities that are not readily apparent from other
sources. Actual results may differ from these estimates under
different assumptions or conditions.

(b) Revenue
Recognition

Corillian derives revenues from providing
software licensing and professional services to customers,
including implementation, hosting services for transactions
processed using Corillians hardware, custom software
engineering and development, consulting, and post-contractual
customer support. Revenues derived from implementation include
reimbursable expenses and equipment sales. Corillian recognizes
revenue from software licensing agreements in accordance with
the provisions of Statement of Position (SOP)
No. 97-2, Software Revenue Recognition, as amended
by SOP No. 98-9, Modification of SOP No. 97-2,
Software Revenue Recognition, with Respect to Certain
Transactions.Corillians software licenses are
functionally dependent on implementation and certain custom
software engineering services; therefore, software licenses and
implementation services, together with custom software
engineering services that are essential to the functionality of
the software, are combined and recognized using the
percentage-of-completion method of contract accounting in
accordance with SOP 81-1, Accounting for Performance of
Construction-Type and Certain Production-Type Contracts.

Revenue on software arrangements involving
multiple elements, which generally include software licenses,
implementation and custom software engineering services,
post-contractual customer support, training services and hosting
services, is allocated to the elements using the residual method
specified in SOP No. 98-9. Corillian has determined
that post-contractual customer support, training and hosting
services can be separated from software licenses, implementation
and custom software engineering services because
(a) post-contractual customer support, training and hosting
services are not essential to the functionality of any other
element in the arrangement, and (b) sufficient
vendor-specific objective evidence exists to permit the
allocation of revenue to these service elements. Vendor-specific
objective evidence has been established on post-contractual
customer support and hosting services using the price the
customer is required to pay when they are sold separately (the
renewal rate), and on training based on the price customers are
charged when these services are sold separately. Under the
residual method, the fair value of post-contractual customer
support, training, and hosting services is deferred and
subsequently recognized as the services are performed,

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CORILLIAN CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

and the difference between the total software
arrangement fee and the amount deferred for post-contractual
customer support, hosting and training services is allocated to
software license, implementation and custom software engineering
services and recognized using contract accounting.

The percentage-of-completion is measured by the
percentage of contract hours incurred to date compared to the
estimated total contract hours for each contract. Corillian has
the ability to make reasonable, dependable estimates relating to
the extent of progress towards completion, contract revenues and
contract costs. Provisions for estimated losses on uncompleted
contracts are made in the period in which such losses are
determined.

Revenues associated with software developed for
others in which Corillian has an obligation to successfully
complete specified activities are deferred until acceptance by
the customer, whereas agreements in which Corillian is providing
services on a best-efforts basis are recognized as services are
performed.

Revenues associated with custom software
engineering services that are not essential to the core
functionality of the software are recognized on a
time-and-materials basis as services are performed. Custom
software engineering services in which Corillian retains and
reserves title and all ownership rights to the software products
and anticipates generating revenues from future sales of the
resulting product are accounted for following the provisions of
the Financial Accounting Standards Boards (FASB) Statement
of Financial Accounting Standards No. 68, Research and
Development Arrangements(Statement No. 68).

Revenues for post-contractual customer support
are recognized ratably over the term of the support services
period, generally a period of one year. Services provided to
customers under customer support and maintenance agreements
generally include technical support and unspecified product
upgrades. Revenues from hosting services for transactions
processed by Corillian are recognized ratably as services are
performed.

Customers are billed in accordance with
contractual specifications. Corillian records the unrecognized
portion of billable fees as deferred revenue. Revenues
recognized in excess of contractual billing terms are recorded
as revenues in excess of billings.

Revenues from OneSource service include
implementation fees, monthly service fees and client user fees.
Revenues associated with implementation were recognized ratably
over the term of the service agreement. Costs incurred relating
to implementation were recorded as cost of revenues. Corillian
received a monthly service fee for each financial institution
interface completed. The monthly service and client user fees
were recognized as these services are performed. Under the terms
of an agreement Corillian entered into with Yodlee in July 2000,
Corillian will no longer offer its own account aggregation
subscription service, but continued to offer its OneSource
service to Microsofts MSN financial portal throughout
2000. In December 2000, Corillians agreement with
Microsoft was cancelled.

(c) Principles
of Consolidation

The consolidated financial statements include the
financial statements of Corillian Corporation and its
wholly-owned subsidiaries, Corillian International Ltd.,
Corillian Services Inc. and Corillian South Asia Sdn Bhd.
All significant intercompany balances and transactions have been
eliminated in consolidation.

(d) Cash
and Cash Equivalents

Cash equivalents consist of mainly of commercial
paper and taxable municipal bonds with original maturities of
ninety days or less, which are carried at market value, which
approximates cost.

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CORILLIAN CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(e) Investments

Investments consist mainly of commercial paper
and municipal bonds, which have original maturities between
three and six months. These investments are classified as
held-to-maturity and are recorded at market value, which
approximates cost.

(f) Intangible
Assets

Intangible assets consist of goodwill, workforce,
and customer relationships. Goodwill represents cost in excess
of the fair value of the net assets acquired and identifiable
intangible assets. The intangible assets were acquired as a
result of Corillians acquisition of Hatcher Associates
Inc. in November 2000. Goodwill and customer relationships are
amortized over three years and workforce is amortized over two
years. Amortization expense was $0, $676,000 and
$6.1 million for the years ended December 31, 1999,
2000 and 2001, respectively.

In accordance with Statement No. 121,
Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed of,management reviews the
Companys long-lived assets, goodwill and intangible assets
for impairment whenever events or changes in circumstances
indicate the carrying amount of the assets may not be
recoverable. Recoverability of these assets is determined by
comparing the forecasted undiscounted net cash flows of the
operation to which the assets relate, to the carrying amount
including associated intangible assets of the operation. If the
operation is determined to be unable to recover the carrying
amount of its assets, then intangible assets are written down
first, followed by the other long-lived assets of the operation,
to fair value. Fair value is determined based on discounted cash
flows or appraised values, depending upon the nature of the
assets. During 2001, Corillian recorded an impairment charge
related to goodwill and other intangible assets resulting from
Hatcher acquisition (see Note 12 for further discussion).

(g) Investment
in Joint Venture

On June 9, 2000, Corillian entered into an
operating agreement with Huntington Bancshares Incorporated,
Compaq Computer Corporation and SAIC Venture Capital
Corporation, a division of Science Applications International
Corporation to form e-Banc, LLC, a Delaware limited
liability company. The business of e-Banc is to develop, produce
and market solutions that enable financial institutions to
collect and coordinate their data from all delivery channels
including tellers, ATMs, web banking sites, among others,
on a real time basis, using existing financial institution
legacy systems as well as new channel applications.

Pursuant to the agreement, Corillian contributed
$3.0 million in cash and issued e-Banc a purchase credit of
$5.0 million towards the future purchase of our software
licenses. The purchase credit is only applicable to license fees
and cannot be applied towards professional services, custom
engineering services, hosting fees, or maintenance fees.
Corillians ownership percentage of e-Banc as of
December 31, 2001, was 9.1%. Corillian has one
representative on e-Bancs board of managers.

Corillian is currently obligated to contribute an
additional $1.0 million in cash to e-Banc and is in the
process of structuring a note to be issued to e-Banc that would
require this amount to be paid in 2003. When and if Corillian
issues the note or cash to e-Banc, Corillians ownership
percentage will increase to 10.1%.

Investments in businesses that Corillian owns
less than a 50% interest and can exert significant influence
over are accounted for using the equity method of investment
accounting. EITF D-46, Accounting for Limited
Partnership Investments, requires that investments in
limited partnerships be accounted for using the equity method
when the percentage of ownership is greater than 5%. Under the
equity method, Corillian records an investment in the stock at
cost, and adjusts the carrying amount of the investment to
recognize its share of the earnings or losses of the business
after the date of investment based on its ownership percentage
of the business as a whole.

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CORILLIAN CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(h) Accounts
Receivable

Corillian performs ongoing credit evaluations of
its customers financial condition. Credit is extended to
customers as deemed necessary and generally does not require
collateral. Management believes that the risk of loss is
significantly reduced due to the quality and financial position
of its customers. Management provides an allowance for doubtful
accounts based on current customer information and historical
statistics. Historically, Corillian has incurred no significant
write-offs of accounts receivable. At December 31, 2000 and
2001, Corillians allowance for doubtful accounts
receivable was $0.

(i) Property
and Equipment

Property and equipment are stated at cost and
depreciated using the straight-line method over the estimated
useful life of the assets, generally three to five years.
Equipment recorded under capital lease agreements are
depreciated over the shorter of the estimated useful life of the
equipment or the lease term. Leasehold improvements are
depreciated over the shorter of the remaining term of the
related leases or the estimated economic useful lives of the
improvements. Repairs and maintenance are expensed as incurred.

(j) Research
and Development

Research and development costs are expensed as
incurred. Arrangements in which Corillians research and
development activities are partially funded by others are
accounted for by applying the provisions of
Statement No. 68.

(k) Capitalized
Software

Corillian accounts for software development costs
in accordance with Statement No. 86, Accounting for the
Costs of Computer Software to be Sold, Leased or Otherwise
Marketed. Software development costs are capitalized
beginning when a products technological feasibility has
been established by completion of a working model of the product
and ending when a product is available for general release to
customers.

Completion of a working model of Corillians
products and general release has substantially coincided. As a
result, Corillian has not capitalized any software development
costs during the three years ended December 31, 2001 and
charged all such costs to research and development expense as
incurred.

(l) Concentration
of Credit Risk

Results of operations are derived from United
States operations and all significant assets reside in the
United States. Banks and other financial institutions accounted
for a majority of Corillians revenue for the three years
ended December 31, 2001. Corillian is exposed to
concentration of credit risk principally from accounts
receivable. For the year ended December 31, 2001, one
customer accounted for greater than 10% of Corillians
consolidated revenues. This customer accounted for
$8.7 million, or 16% of total consolidated revenues, for
the year ended December 31, 2001.

Corillian is subject to concentrations of credit
risk from its cash and cash equivalents, investments and trade
receivables. Corillian limits its exposure to credit risk
associated with cash and cash equivalents and investments by
placing its cash, cash equivalents and investments with a major
financial institution and by investing in investment-grade
securities. At December 31, 2001, no customer accounted for
more than 10% of consolidated trade accounts receivable.

(m) Risk
of Technological Change

A substantial portion of Corillians
revenues are generated from the development, and rapid release
to market of computer software products and enhancements during
the year. In the extremely competitive

F-9



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##### Table of Contents



CORILLIAN CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

industry environment in which Corillian operates,
such product generation, development and marketing processes are
uncertain and complex, requiring accurate prediction of market
trends and demand as well as successful management of various
risks inherent in such products. Additionally, Corillians
production strategy relies on certain employees ability to
deliver implemented products in time to meet critical
development and distribution schedules. In light of these
dependencies, it is reasonably possible that failure to
successfully manage a significant product introduction or
failure of certain employees to deliver implemented products as
needed could have severe impact on Corillians growth and
result of operations and liquidity.

(n) Stock-Based
Compensation

Corillian accounts for stock-based compensation
using Statement No. 123, Accounting for Stock-Based
Compensation. This statement permits a company to choose
either a fair value based method of accounting for its
stock-based compensation arrangements or to comply with the
current Accounting Principles Board Opinion 25
(APB 25) intrinsic value based method adding pro forma
footnote disclosures of net income (loss) computed as if
the fair value based method had been applied in the financial
statements. Corillian applies Statement No. 123 by
retaining the APB 25 (and interpretations) method of accounting
for stock-based compensation for employees with annual pro forma
disclosures of net income (loss). Corillian accounts for stock
and stock options issued to non-employees in accordance with the
provisions of Statement No. 123 and Emerging Issues Task
Force (EITF) No. 96-18, Accounting for Equity
Instruments that are Issued to Other than Employees for
Acquiring, or in Conjunction with Selling, Goods or
Services. Expense associated with stock-based compensation
is amortized on an accelerated basis over the vesting period of
the individual stock option awards consistent with the method
prescribed in FASB Interpretation No. 28.

(o) Net
Loss Per Share

Corillian computes net loss per share in
accordance with Statement No. 128, Earnings Per
Share, and SEC Staff Accounting Bulletin No. 98 (SAB
No. 98). Under the provisions of Statement No. 128 and
SAB No. 98, basic and diluted net loss per share is
computed by dividing the net loss available to common
stockholders for the period by the weighted-average number of
shares of common stock outstanding during the period. Net loss
attributed to common shareholders for the years ended
December 31, 1999 and 2000 includes the accretion of
discounts on redeemable convertible preferred stock. This
accretion ceased upon Corillians initial public offering
of common stock in April 2000 as all outstanding shares of
Corillians redeemable convertible preferred stock
automatically converted into common stock upon the offering.

The following table sets forth the
weighted-average shares of common stock issuable under stock
options and warrants using the treasury stock method, shares
issuable for acquisitions and convertible preferred stock on an
if-converted basis, which are not included in calculating net
loss per share due to their antidilutive effect for the periods
indicated:

|                                      |  |                         |           |      |  |      |           |  |  |  |           | 
|------------------------------------- |  | ----------------------- | --------- | ---- |  | ---- | --------- |  |  |  | --------- | 
|                                      |  |                        
|                                      |  | Year Ended December 31,
|                                      |  |                        
|                                      |  | 1999                    |           | 2000 |  | 2001
|                                      |  |                         |           |      |  |     
|Shares issuable under stock options   |  |                         | 739,837   |      |  |      | 2,808,204 |  |  |  | 1,700,776 | 
|Shares issuable under warrants        |  |                         |          |      |  |      | 46,826    |  |  |  |          | 
|Shares issuable for acquisitions      |  |                         |          |      |  |      | 24,642    |  |  |  |          | 
|Shares of convertible preferred stock |  |                         | 8,892,479 |      |  |      |          |  |  |  |          | 
|                                      |  |                         |           |      |  |      |           |  |  |  |           | 
|                                      |  |                         | 9,632,316 |      |  |      | 2,879,672 |  |  |  | 1,700,776 | 
|                                      |  |                         |           |      |  |      |           |  |  |  |           | 

Pursuant to SAB No. 98, common shares issued
for nominal consideration in each of the periods presented, if
any, would be included in the per share calculations as if they
were outstanding for all periods presented. No such shares have
been issued.

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##### Table of Contents



CORILLIAN CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(p) Comprehensive
Income

Corillian has adopted the provisions of Statement
No. 130, Reporting Comprehensive Income.
Comprehensive income is defined as changes in shareholders
equity exclusive of transactions with owners, including foreign
currency translations adjustments. To date, such transactions
that are required to be reported in comprehensive income are not
material to Corillians financial position or results of
operations.

(q) Income
Taxes

Corillian accounts for income taxes under the
asset and liability method. Deferred tax assets and liabilities
are recognized for the future tax consequences of events that
have been included in the financial statements and tax returns.
Under this method, deferred tax assets and liabilities are
determined based on the difference between the financial
statement and tax bases of assets and liabilities using enacted
tax rates in effect for the year in which the differences are
expected to be recovered or settled. Valuation allowances are
established to reduce deferred tax assets to the amount expected
to be realized.

(r) Fair
Value of Financial Instruments

The carrying amounts reported in the balance
sheet for cash and cash equivalents, investments, accounts and
notes receivable, revenues in excess of billings, accounts
payable and accrued liabilities approximate fair values due to
the short-term nature of those instruments. The carrying amount
of capital leases and long-term debt approximate fair value as
the stated interest rates reflect current market rates. Fair
value estimates are made at a specific point in time, based on
relevant market information about the financial instruments when
available. These estimates are subjective in nature and involve
uncertainties and matters of significant judgment and,
therefore, cannot be determined with precision.

(s) Advertising

Advertising costs are expensed as incurred.
Advertising expense was $110,000, $277,000 and $333,000 for the
years ended December 31, 1999, 2000 and 2001, respectively.

(t) Recent
Accounting Pronouncements

In June 1998, the FASB issued Statement
No. 133, Accounting for Derivative Instruments and
Hedging Activities. Statement No. 133, as amended by
Statements No. 137 and No. 138, establishes methods of
accounting for derivative financial instruments and hedging
activities related to those instruments as well as other hedging
activities. Statement No. 133, as amended, is effective for
all fiscal quarters of all fiscal years beginning after
June 15, 2000. Because Corillian currently holds no
derivative financial instruments and does not currently engage
in hedging activities, adoption of Statement No. 133 did
not have a material impact on the Companys financial
condition, results of operations or liquidity.

In July 2001, the FASB issued Statements
No. 141, Business Combinations and No. 142,
Goodwill and Other Intangible Assets. Statement
No. 141 establishes new standards for accounting and
reporting requirements for business combinations initiated after
June 30, 2001 and prohibits the use of the pooling-of-interest
method for combinations initiated after June 30, 2001.
Statement No. 142 changes the accounting for goodwill from
an amortization method to an impairment only approach. Upon
adoption of Statement No. 142, goodwill will be tested at
the reporting unit level annually and whenever events or
circumstances occur indicating that goodwill might be impaired.
Amortization of goodwill, including goodwill from past business
combinations will cease on January 1, 2002. Corillian will
adopt Statements No. 141 and 142 on January 1, 2002.
The Company does not expect that the adoption of these new
standards will have a significant impact on the Companys
financial condition, results of operations or liquidity.

F-11



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##### Table of Contents



CORILLIAN CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

In August 2001, the FASB issued Statement
No. 143, Accounting for Obligations Associated with The
Retirement of Long-Lived Assets, which establishes
accounting standards for the recognition and measurement of an
asset retirement obligation and its associated asset retirement
cost. It also provides accounting guidance for legal obligations
associated with the retirement of tangible long-lived assets.
Statement No. 143 is effective for fiscal years beginning
after June 15, 2002, with early adoption permitted. The
Company expects to adopt Statement No. 143 effective
January 1, 2003 and does not expect that the adoption of
this new standard will have a significant impact on the
Companys financial condition, results of operations or
liquidity.

In October 2001 the FASB issued Statement
No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets, which addresses financial accounting and
reporting for the impairment of long-lived assets and for
long-lived assets to be disposed of. This Statement supersedes
Statement No. 121, Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of. This statement also supersedes the accounting and
reporting provisions of APB Opinion No. 30, Reporting
the Results of Operations-Reporting the Effects of Disposal of a
Segment of a Business, and Extraordinary, Unusual and
Infrequently Occurring Events and Transactions, for Segments of
a Business to Be Disposed Of. This Statement also amends
Accounting Research Bulletin No. 51, Consolidated
Financial Statements, to eliminate the exception to
consolidation for a temporarily controlled subsidiary. The
Company expects to adopt Statement No. 144 effective
January 1, 2002 and does not expect that the adoption of
this standard will have a significant impact on the
Companys financial condition, results of operations or
liquidity.

(u) Use
of Estimates

Accounting principles generally accepted in the
United States of America require management to make estimates
and assumptions that affect the reported amounts of certain
assets and liabilities and disclosure of contingencies at the
date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual
results could differ from those estimates.

(v) Reclassifications

Certain reclassifications have been made to the
consolidated financial statements for 1999 and 2000 in order to
conform to the 2001 presentation.

(3) Balance Sheet Components

(a) Property
and Equipment, Net

Property and equipment, net, consisted of the
following at December 31:

|                                               |  |                |        |      |  |   |        |  
|---------------------------------------------- |  | -------------- | ------ | ---- |  | - | ------ | -
|                                               |  | 2000           |        | 2001
|                                               |  |                |        |     
|                                               |  |               
|                                               |  | (In thousands)
|Computer equipment and software                |  | $              | 9,356  |      |  | $ | 11,862 |  
|Furniture, fixtures and other equipment        |  |                | 1,993  |      |  |   | 3,527  |  
|Leasehold improvements                         |  |                | 2,490  |      |  |   | 4,544  |  
|                                               |  |                |        |      |  |   |        |  
|                                               |  |                | 13,839 |      |  |   | 19,933 |  
|Less accumulated depreciation and amortization |  |                | (2,355 | )    |  |   | (6,938 | )
|                                               |  |                |        |      |  |   |        |  
|                                               |  | $              | 11,484 |      |  | $ | 12,995 |  
|                                               |  |                |        |      |  |   |        |  

Depreciation and amortization expense was
$278,000, $2.0 million and $4.7 million for the years
ended December 31, 1999, 2000 and 2001, respectively.

F-12



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##### Table of Contents



CORILLIAN CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(b) Accrued
Liabilities

Accrued liabilities consisted of the following at
December 31:

|                                          |  |      |       |      |  |   |       | 
|----------------------------------------- |  | ---- | ----- | ---- |  | - | ----- | 
|                                          |  | 2000 |       | 2001
|                                          |  |      |       |     
|Payroll and related expenses              |  | $    | 3,793 |      |  | $ | 1,691 | 
|Employee stock purchase plan withholdings |  |      | 706   |      |  |   | 263   | 
|Accrued acquisition costs                 |  |      | 2,379 |      |  |   |      | 
|Other accrued liabilities                 |  |      | 635   |      |  |   | 586   | 
|                                          |  |      |       |      |  |   |       | 
|                                          |  | $    | 7,513 |      |  | $ | 2,540 | 
|                                          |  |      |       |      |  |   |       | 

(4) Income Taxes

Domestic and foreign pre-tax loss is as follows
for the year ended December 31:

|         |  |      |        |      |  |      |         |   |  |   |         |  
|-------- |  | ---- | ------ | ---- |  | ---- | ------- | - |  | - | ------- | -
|         |  | 1999 |        | 2000 |  | 2001
|         |  |      |        |      |  |     
|Domestic |  | $    | (9,994 | )    |  | $    | (31,344 | ) |  | $ | (44,689 | )
|Foreign  |  |      |       |      |  |      | (1,911  | ) |  |   | (4,612  | )
|         |  |      |        |      |  |      |         |   |  |   |         |  
|         |  | $    | (9,994 | )    |  | $    | (33,255 | ) |  | $ | (49,301 | )
|         |  |      |        |      |  |      |         |   |  |   |         |  

Due to Corillians losses before the
provision for income taxes for the years ended December 31,
1999, 2000, and 2001, there has been no provision for federal
and state income taxes. The reconciliation of the statutory
federal income tax rate to Corillians effective income tax
rate is as follows:

|                                      |                                                |      |     |      |   |      |     |    |   |  |     |    |  
|------------------------------------- | ---------------------------------------------- | ---- | --- | ---- | - | ---- | --- | -- | - |  | --- | -- | -
|                                      |                                                | 1999 |     | 2000 |   | 2001
|                                      |                                                |      |     |      |   |     
|Federal statutory rate                |                                                |      | (34 | )%   |   |      | (34 | )% |   |  | (34 | )%
|Increases (decreases) resulting from: |                                                |      |     |      |   |      |     |    |   |  |     |   
|                                      | State income taxes, net of federal tax benefit |      |     | (4   | ) |      |     | (4 | ) |  |     | (2 | )
|                                      | Change in valuation allowance                  |      |     | 40   |   |      |     | 40 |   |  |     | 19 |  
|                                      | Goodwill                                       |      |     |     |   |      |     |   |   |  |     | 19 |  
|                                      | Research and experimentation credits           |      |     | (2   | ) |      |     | (2 | ) |  |     | (2 | )
|                                      |                                                |      |     |      |   |      |     |    |   |  |     |   
|                                      |                                                |      |    | %    |   |      |    | %  |   |  |    | % 
|                                      |                                                |      |     |      |   |      |     |    |   |  |     |   

F-13



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##### Table of Contents



CORILLIAN CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The tax effects of temporary differences and net
operating loss carryforwards which give rise to the significant
portions of deferred tax assets and liabilities are as follows
at December 31:

|                          |                                                   |                                      |         |        |        |  |         |        |        | 
|------------------------- | ------------------------------------------------- | ------------------------------------ | ------- | ------ | ------ |  | ------- | ------ | ------ | 
|                          |                                                   | 2000                                 |         | 2001  
|                          |                                                   |                                      |         |       
|                          |                                                   |                                     
|                          |                                                   | (In thousands)                      
|Deferred tax assets:      |                                                   |                                      |         |        |        |  |         |       
|                          | Research and experimentation credit carryforwards |                                      | $       | 1,059  |        |  | $       | 1,915  |       
|                          | Accrued expenses and allowances                   |                                      |         | 358    |        |  |         | 328    |       
|                          | Deferred compensation                             |                                      |         | 2,504  |        |  |         | 3,278  |       
|                          | Net operating loss carryforwards                  |                                      |         | 13,706 |        |  |         | 19,316 |       
|                          | Foreign net operating loss carryforwards          |                                      |         | 422    |        |  |         | 2,747  |       
|                          | Equity investments                                |                                      |         | 219    |        |  |         | 387    |       
|                          | Goodwill                                          |                                      |         | 416    |        |  |         | 378    |       
|                          | Depreciable assets                                |                                      |         |       |        |  |         | 133    |       
|                          | Other                                             |                                      |         | 112    |        |  |         | 63     |       
|                          |                                                   |                                      |         |        |        |  |         |       
|                          |                                                   | Total gross deferred tax assets      |         |        | 18,796 |  |         |        | 28,545 | 
|Less valuation allowance  |                                                   |                                      | (18,552 | )      |        |  | (28,482 | )     
|                          |                                                   |                                      |         |        |        |  |         |       
|                          |                                                   |                                      | 244     |        |        |  | 63      |       
|                          |                                                   |                                      |         |        |        |  |         |       
|Deferred tax liabilities: |                                                   |                                      |         |        |        |  |         |       
|                          | Prepaid expenses                                  |                                      |         |       |        |  |         | 63     |       
|                          | Depreciable assets                                |                                      |         | 244    |        |  |         |       |       
|                          |                                                   |                                      |         |        |        |  |         |       
|                          |                                                   | Total gross deferred tax liabilities |         |        | 244    |  |         |        | 63     | 
|                          |                                                   |                                      |         |        |        |  |         |       
|                          |                                                   | Net deferred tax assets              |         | $      |       |  |         | $      |       | 
|                          |                                                   |                                      |         |        |        |  |         |       

The Company has established a valuation allowance
for certain deferred tax assets, including those for net
operating loss and tax credit carryforwards. Such a valuation
allowance is recorded when it is more likely than not that the
deferred tax assets will not be realized. The portion of the
valuation allowance for deferred tax assets for which
subsequently recognized tax benefits will be applied directly to
contributed capital is approximately $447,000 as of
December 31, 2001. This amount is attributable to
differences between financial and tax reporting of employee
stock option transactions.

The net change in the total valuation allowance
was an increase of approximately $4.0 million,
$13.1 million and $9.9 million for the years ended
December 31, 1999, 2000, and 2001 respectively.

At December 31, 2001, Corillian has federal
and state net operating loss carryforwards of approximately
$50.1 million and foreign net operating loss carryforwards
of approximately $9.1 million to offset against future
income and research and experimentation credits of
$2.1 million. These carryforwards expire in 2012 through
2021.

A provision of the Internal Revenue Code requires
the utilization of net operating losses and research and
experimentation credits be limited when there is a change of
more than 50% in ownership of Corillian. Such a change occurred
with the sales of Series A convertible preferred stock
(Series A) in December 1997, the sale of Series B
redeemable convertible preferred stock in April 1999, and the
issuance of common stock in Corillians initial public
offering in April 2000. Accordingly, the utilization of the net
operating loss carryforwards generated from periods prior to
April 2000 is limited.

F-14



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##### Table of Contents



CORILLIAN CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(5) Redeemable Convertible Preferred
Stock

Corillian has designated shares of authorized
preferred stock as redeemable convertible preferred stock.
Series B and Series C redeemable convertible preferred
stock (Series B and Series C) was subject to certain
mandatory redemption features following the affirmative vote of
at least 75% of the outstanding shares of Series B and
Series C. Upon completion of Corillians initial
public offering on April 12, 2000, 7,817,516 shares of
Series B and 6,905,707 shares of Series C
automatically converted into a total of 14,723,223 shares of
common stock.

(6) Shareholders Equity

(a) Preferred
Stock

In conjunction with Corillians initial
public offering on April 12, 2000, 1,639,730 shares of
Series A automatically converted into common stock

(b) Warrant

Concurrent with Corillians initial public
offering on April 12, 2000, Corillian issued a warrant to
purchase 250,000 shares of common stock. This warrant has an
exercise price of $8.00 per share, which was equal to the per
share price of Corillians initial public offering of
common stock, and a term of three years. This warrant was fully
vested at the time of purchase and immediately exercisable. The
purchase price of this warrant was approximately
$1.4 million, which was determined using the Black-Scholes
option pricing model and paid upon closing of Corillians
initial public offering. This warrant is outstanding as of
December 31, 2001.

(c) 2000
Employee Stock Purchase Plan

In March 2000, the Board of Directors approved
the 2000 Employee Stock Purchase Plan (the ESPP) that became
effective upon completion of Corillians initial public
offering on April 12, 2000. Corillian reserved a total of
333,333 shares of common stock for issuance under the ESPP. All
Corillian employees are eligible if they typically work over 20
hours per week and do not own five percent or more of
Corillians voting stock. At Corillians Annual
Meeting of Shareholders in May 2001, Corillians
shareholders approved an amendment to increase the number of
shares authorized for issuance pursuant to the ESPP from 333,333
to 400,000.

The first offering period commenced on the
effective date of Corillians initial public offering in
April 2000 and will end on January 31, 2002. Subsequent
offering periods will commence on February 1 and
August 1 each year and will have a 24 month duration.
Each offering period consists of four consecutive purchase
periods of six months duration, except that the last date
of the first purchase period was July 31, 2000.

Participants purchase common stock on the last
day of each purchase period. The purchase price is the lesser of
85% of the fair market value of the common stock on the first
day of an offering period or 85% of the fair market value of the
common stock on the purchase date, except that the purchase
price for the first offering period is equal to the lesser of
100% of the initial public offering price and 85% of the fair
market value of the common stock on the purchase date.

F-15



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##### Table of Contents



CORILLIAN CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The per share weighted-average fair value, as
determined by applying the valuation methodology prescribed in
FASB Technical Bulletin 97-1 to the ESPP in 2000 and 2001,
was $4.19 and $2.54, respectively, using the following
assumptions:

|                        |  |                         |  |            
|----------------------- |  | ----------------------- |  | -----------
|                        |  |                        
|                        |  | Year Ended December 31,
|                        |  |                        
|                        |  | 2000                    |  | 2001       
|                        |  |                         |  |            
|Risk free interest rate |  | 5.5%                    |  | 4.09%      
|Expected volatility     |  | 100%                    |  | 100%       
|Expected life           |  | 6-24 months             |  | 6-24 months
|Dividend yield          |  |                        |  |           

(7) 1997 and 2000 Stock Option
Plans

In 1997, Corillians Board of Directors
approved and adopted a Stock Option Plan (the 1997 Plan). As
adopted, the maximum aggregate number of shares awardable under
the 1997 Plan was 2,000,000 shares of common stock for the grant
of stock options to employees, officers, directors, consultants
or advisors. Options granted pursuant to the 1997 Plan may be
either incentive stock options or non-qualified stock options,
at the discretion of the Board of Directors. In April 1999,
Corillians Board of Directors approved an increase of
2,243,795 shares available for grant under the 1997 Plan,
increasing the total shares available for grant to 4,243,795. In
March 2000, the Board of Directors approved an amendment that
caps the 1997 Plan at 3,453,193 shares, which were the number of
shares subject to options at that time. Shares generally vest in
yearly installments over a period of three or four years
following the date of grant. Options generally expire five years
from the date of grant, and generally expire three months after
termination of employment with Corillian.

In March 2000, the Board of Directors approved
the 2000 Stock Incentive Compensation Plan (the 2000 Plan) and
reserved 4,000,000 shares of common stock for issuance of stock
options to employees, officers, directors, consultants or
advisors under the 2000 Plan. At Corillians Annual Meeting
of Shareholders in May 2001, Corillians shareholders
approved an amendment to increase the number of shares
authorized for issuance pursuant to the 2000 Plan from 4,000,000
to 5,000,000. Options granted pursuant to the 2000 Plan may be
either incentive stock options or non-qualified stock options,
at the discretion of the Board of Directors. Shares generally
vest over a period of four years following the date of grant.
Options generally expire ten years from the date of grant, and
generally expire three months after termination of employment
with Corillian.

F-16



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##### Table of Contents



CORILLIAN CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Stock option activity under the 1997 and 2000
Plans was as follows:

|                          |  |           |            |          |  |  |       |  
|------------------------- |  | --------- | ---------- | -------- |  |  | ----- | -
|                          |  |           |            | Weighted
|                          |  |           |            | Average 
|                          |  | Number    |            | Exercise
|                          |  | of Shares |            | Price   
|                          |  |           |            |         
|Balance December 31, 1998 |  |           | 930,000    |          |  |  | 0.32  |  
|Granted                   |  |           | 2,913,667  |          |  |  | 0.99  |  
|Exercised                 |  |           | (132,667   | )        |  |  | (0.53 | )
|Cancelled                 |  |           | (91,776    | )        |  |  | (0.65 | )
|                          |  |           |            |          |  |  |       |  
|Balance December 31, 1999 |  |           | 3,619,224  |          |  |  | 0.84  |  
|Granted                   |  |           | 3,968,438  |          |  |  | 9.59  |  
|Exercised                 |  |           | (1,220,160 | )        |  |  | (0.62 | )
|Cancelled                 |  |           | (541,295   | )        |  |  | (4.16 | )
|                          |  |           |            |          |  |  |       |  
|Balance December 31, 2000 |  |           | 5,826,207  |          |  |  | 6.54  |  
|Granted                   |  |           | 1,798,088  |          |  |  | 5.43  |  
|Exercised                 |  |           | (608,573   | )        |  |  | (1.12 | )
|Cancelled                 |  |           | (963,802   | )        |  |  | (5.33 | )
|                          |  |           |            |          |  |  |       |  
|Balance December 31, 2001 |  |           | 6,051,920  |          |  |  | 6.93  |  
|                          |  |           |            |          |  |  |       |  

The following table summarizes information
regarding stock options outstanding and exercisable as of
December 31, 2001:

|            |  |                     |           |                     |  |           |      |             |  |           |       |  |  |  |           |  |  |   |       | 
|----------- |  | ------------------- | --------- | ------------------- |  | --------- | ---- | ----------- |  | --------- | ----- |  |  |  | --------- |  |  | - | ----- | 
|            |  |                     |           |                     |  |          
|            |  | Options Outstanding |           |                    
|            |  |                     |           | Options Exercisable
|            |  |                     |           | Weighted-           |  |           |      |            
|            |  |                     |           | Average             |  | Weighted- |      |             |  | Weighted-
|            |  |                     |           | Remaining           |  | Average   |      | Exercisable |  | Average  
|Exercise    |  | Number              |           | Contractual         |  | Exercise  |      | Number      |  | Exercise 
|Price       |  | of Shares           |           | Life                |  | Price     |      | of Shares   |  | Price    
|            |  |                     |           |                     |  |           |      |             |  |          
|$0.15-1.50  |  |                     | 1,348,276 |                     |  |           | 2.52 |             |  | $         | 1.01  |  |  |  | 1,021,644 |  |  | $ | 0.99  | 
|1.59-3.77   |  |                     | 1,673,444 |                     |  |           | 7.90 |             |  |           | 3.20  |  |  |  | 506,743   |  |  |   | 3.35  | 
|3.81-10.00  |  |                     | 1,693,234 |                     |  |           | 8.82 |             |  |           | 8.30  |  |  |  | 501,102   |  |  |   | 9.47  | 
|10.06-19.25 |  |                     | 1,174,091 |                     |  |           | 8.66 |             |  |           | 15.38 |  |  |  | 299,726   |  |  |   | 16.88 | 
|19.50       |  |                     | 162,875   |                     |  |           | 8.36 |             |  |           | 19.50 |  |  |  | 66,943    |  |  |   | 19.50 | 
|            |  |                     |           |                     |  |           |      |             |  |           |       |  |  |  |           |  |  |   |       | 
|$0.15-19.50 |  |                     | 6,051,920 |                     |  |           | 7.11 |             |  | $         | 6.93  |  |  |  | 2,396,158 |  |  | $ | 5.77  | 
|            |  |                     |           |                     |  |           |      |             |  |           |       |  |  |  |           |  |  |   |       | 

At December 31, 2001, 1,162,484 shares were
available for grant.

Corillian has elected to follow APB No. 25,
Accounting for Stock Issued to Employees, and
interpretations, to account for its employee stock option plan.
Under APB No. 25, no compensation expense is recognized
when the exercise price of Corillians employee stock
options is equal to or greater than the fair value of the
underlying stock on the date of grant. Deferred stock-based
compensation is recorded for those situations where the exercise
price of an option was lower than the fair value of the
underlying common stock. Corillian recorded deferred stock-based
compensation of $3.7 million, $6.7 million and $0 for
the years ended December 31, 1999, 2000 and 2001,
respectively. Amortization of stock-based compensation is being
amortized on an accelerated basis over the vesting period of the
stock option award, generally three or four years, consistent
with the method prescribed in FASB Interpretation No. 28.

During 1999 and 2000, the Company issued 33,333
and 6,667 stock options to non-employees, respectively. The fair
value of these stock options measured at the time of grant,
using the Black-Scholes

F-17



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##### Table of Contents



CORILLIAN CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

option pricing model and applying the assumptions
in the table below, totaled $149,000 and $125,000, respectively.
These amounts, which are included in deferred stock-based
compensation, were to be amortized over the stock option vesting
period. During 2000, Corillian accelerated the vesting period of
these options and, as such, re-measured the fair value of these
options and recorded compensation expense equal to the
difference between the total compensation expense calculated
after the options are remeasured less previously recognized
compensation expense. Amortization of stock-based compensation
related to these options was $15,000, $259,000 and $0 for the
years ended December 31, 1999, 2000 and 2001, respectively.

The per share weighted-average fair value, as
determined by applying the Black-Scholes option pricing model to
stock options granted under the 1997 and 2000 Plans was $1.28,
$7.40 and $3.81 during the years ended December 31, 1999,
2000 and 2001, respectively, using the following
weighted-average assumptions:

|                        |  |                         |      |      |  |      |      |   |  |  |      |  
|----------------------- |  | ----------------------- | ---- | ---- |  | ---- | ---- | - |  |  | ---- | -
|                        |  |                        
|                        |  | Year Ended December 31,
|                        |  |                        
|                        |  | 1999                    |      | 2000 |  | 2001
|                        |  |                         |      |      |  |     
|Risk free interest rate |  |                         | 5.6  | %    |  |      | 5.5  | % |  |  | 4.09 | %
|Expected volatility     |  |                         | 100  | %    |  |      | 100  | % |  |  | 100  | %
|Expected life in years  |  |                         | 3.50 |      |  |      | 3.85 |   |  |  | 3.93 |  
|Dividend yield          |  |                         |     |      |  |      |     |   |  |  |     |  

Had the stock-based compensation for
Corillians stock option plans and ESPP been determined
based on the provisions of Statement No. 123, net loss and
basic and diluted net loss per share would have been as follows:

|                                                      |  |                                       |         |      |  |      |         |   |  |   |         |  
|----------------------------------------------------- |  | ------------------------------------- | ------- | ---- |  | ---- | ------- | - |  | - | ------- | -
|                                                      |  |                                      
|                                                      |  | Year Ended December 31,              
|                                                      |  |                                      
|                                                      |  | 1999                                  |         | 2000 |  | 2001
|                                                      |  |                                       |         |      |  |     
|                                                      |  |                                      
|                                                      |  | (In thousands, except per share data)
|Pro forma net loss attributed to common
	shareholders |  | $                                     | (10,795 | )    |  | $    | (35,324 | ) |  | $ | (56,400 | )
|                                                      |  |                                       |         |      |  |      |         |   |  |   |         |  
|Pro forma basic and diluted net loss per share        |  | $                                     | (1.46   | )    |  | $    | (1.41   | ) |  | $ | (1.63   | )
|                                                      |  |                                       |         |      |  |      |         |   |  |   |         |  

(8) Commitments and
Contingencies

(a) Litigation

Other than the proceedings described below,
Corillian is engaged in legal proceedings incidental to the
normal course of business. Although the ultimate outcome of
these matters cannot be determined, management believes that the
final disposition of these proceedings will not have a material
adverse effect on the consolidated financial position, results
of operations or liquidity of Corillian.

In April 2000, KeyBank National Association
brought a lawsuit against one of Corillians employees,
alleging that the employee violated the terms of confidentiality
agreements with KeyBank and misappropriated trade secrets of
KeyBank and used them in performing work for Corillian.
Corillian investigated the allegations and concluded that the
employee did not use trade secrets or confidential information
in performing any substantial services for Corillian. Corillian
continues to employ this employee. In January 2001, KeyBank
named Corillian as a party to the lawsuit, alleging that
Corillian misappropriated KeyBanks trade secrets and
confidential information and used them performing work for some
of Corillians customers. KeyBank is seeking unspecified
monetary damages. Corillian filed a counterclaim against
KeyBank, alleging that KeyBank used proprietary information that
Corillian disclosed to KeyBank when Corillian shared its
technology with KeyBank in November 1998. Corillian is seeking
unspecified monetary damages. Corillian intends to vigorously
contest KeyBanks claims and pursue its counterclaim.

F-18



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##### Table of Contents



CORILLIAN CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

No provision has been made in the accompanying
consolidated financial statements for any loss that might result
from this lawsuit, if any, because the outcome is uncertain and
no estimate can be made at this time.

(b) Royalty

Subject to the purchase agreement relating to the
right to license software, Corillian agreed to pay Checkfree
Corporation a royalty of 7% of gross revenues on a quarterly
basis for five years or up to a maximum of $1.75 million.
Corillian had the option to pre-pay any unpaid portion of the
$1.75 million at present value at any time prior to the end
of the royalty period. Royalties are charged to cost of revenues
in the accompanying consolidated financial statements. Corillian
recorded $493,000, $935,000 and $0 in royalty expenses for the
years ended December 31, 1999, 2000 and 2001, respectively.
Corillian completed its requirements under the royalty agreement
during 2000 and paid the entire royalty obligation.

(c) 401(k)
Plan

Corillian maintains a profit-sharing retirement
plan for eligible employees under the provisions of Internal
Revenue Code Section 401(k). Participants may defer up to 15% of
their annual compensation on a pre-tax basis, subject to maximum
limits on contributions set forth by the Internal Revenue
Service. Corillians contributions are equal to 50% of a
participants contribution, up to a maximum of 6% of the
participants annual compensation. Under this plan,
Corillian made contributions of $40,000, $332,000 and $429,000
during the years ended December 31, 1999, 2000 and 2001,
respectively.

(d) Lease
Obligations

Corillian is obligated under capital lease
agreements for computer and other equipment that expire over the
next four years. Gross amounts of property and equipment and
related accumulated depreciation recorded under capital leases
are as follows at December 31:

|                              |  |                |       |      |  |   |       |  
|----------------------------- |  | -------------- | ----- | ---- |  | - | ----- | -
|                              |  | 2000           |       | 2001
|                              |  |                |       |     
|                              |  |               
|                              |  | (In thousands)
|Computer and other equipment  |  | $              | 1,294 |      |  | $ | 1,294 |  
|Less accumulated depreciation |  |                | (135  | )    |  |   | (478  | )
|                              |  |                |       |      |  |   |       |  
|                              |  | $              | 1,159 |      |  | $ | 816   |  
|                              |  |                |       |      |  |   |       |  

Corillian also has noncancelable operating
leases, primarily for facilities and computer and other
equipment, which expire over the next seven years. Rental
expense under operating leases was $304,000, $1.2 million
and $3.7 million for the years ended December 31,
1999, 2000 and 2001, respectively.

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##### Table of Contents



CORILLIAN CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Future minimum lease payments on operating and
capital leases are as follows:

|                                   |      |                                             |      |           |     |  |   |       |        | 
|---------------------------------- | ---- | ------------------------------------------- | ---- | --------- | --- |  | - | ----- | ------ | 
|                                   |      | Capital                                     |      | Operating
|                                   |      | Leases                                      |      | Leases   
|                                   |      |                                             |      |          
|                                   |      |                                            
|                                   |      | (In thousands)                             
|Year ending December 31:           |      |                                             |      |           |     |  |   |      
|                                   | 2002 |                                             | $    | 499       |     |  | $ | 3,440 |       
|                                   | 2003 |                                             |      | 350       |     |  |   | 3,511 |       
|                                   | 2004 |                                             |      | 1         |     |  |   | 3,583 |       
|                                   | 2005 |                                             |      |          |     |  |   | 3,326 |       
|                                   | 2006 |                                             |      |          |     |  |   | 2,894 |       
|                                   |      |                                             |      |           |     |  |   |      
|                                   |      | Total minimum lease payments                |      |           | 850 |  |   | $     | 16,754 | 
|                                   |      |                                             |      |           |     |  |   |      
|Less amounts representing interest |      |                                             | (117 | )         |     |  |   |      
|                                   |      |                                             |      |           |     |  |   |      
|                                   |      | Present value of minimum lease payments     |      |           | 733 |  |   |       |        | 
|Less current portion               |      |                                             | (414 | )         |     |  |   |      
|                                   |      |                                             |      |           |     |  |   |      
|                                   |      | Long-term portion of minimum lease payments |      | $         | 319 |  |   |       |        | 
|                                   |      |                                             |      |           |     |  |   |      

(e) Lines
of credit

In January 2000, Corillian obtained a
$3.0 million equipment line of credit with a financial
institution. Borrowings under this arrangement bear interest at
an effective rate of 17.2% per annum. Under this line of credit,
Corillian is obligated to make fixed monthly payments of
approximately $98,000 through March 2003 and a final balloon
payment of approximately $302,000 in April 2003.

In November 2000, Corillian obtained a
$5.0 million equipment line of credit with a financial
institution. Borrowings under this arrangement bear interest at
an effective rate of 7.9% to 8.6% per annum. Under this line of
credit, Corillian is obligated to make fixed monthly payments of
approximately $123,000 through January 2005 and two monthly
payments thereafter of $29,000 through March 2005.

Certain assets of Corillian secure borrowings
under both of these arrangements. Both agreements contain
customary financial covenants, including specific covenants
relating to Corillians debt coverage ratio and tangible
net worth. Corillian is in compliance with these covenants as of
December 31, 2001.

Long-term debt was as follows at December 31:

|                                                                                              |  |                |        |      |  |   |        |  
|--------------------------------------------------------------------------------------------- |  | -------------- | ------ | ---- |  | - | ------ | -
|                                                                                              |  | 2000           |        | 2001
|                                                                                              |  |                |        |     
|                                                                                              |  |               
|                                                                                              |  | (In thousands)
|Line of credit facility due 2003 with an interest
	rate of 17.2% at December 31, 2001         |  | $              | 2,319  |      |  | $ | 1,554  |  
|Line of credit facility due 2005 with an interest
	rates of 7.9% to 8.6% at December 31, 2001 |  |                | 3,812  |      |  |   | 4,042  |  
|                                                                                              |  |                |        |      |  |   |        |  
|                                                                                              |  |                | 6,131  |      |  |   | 5,596  |  
|Less current portion                                                                          |  |                | (1,599 | )    |  |   | (2,185 | )
|                                                                                              |  |                |        |      |  |   |        |  
|                                                                                              |  | $              | 4,532  |      |  | $ | 3,411  |  
|                                                                                              |  |                |        |      |  |   |        |  

(9) Segment Information

Corillian has adopted Statement No. 131,
Disclosures about Segments of an Enterprise and Related
Information, which establishes standards for reporting
information related to operating segments in annual

F-20



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##### Table of Contents



CORILLIAN CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

financial statements and requires selected
information for those segments to be presented in interim
financial reports issued to shareholders. Statement No. 131 also
establishes standards for related disclosures about products and
services and geographic areas. Operating segments are defined as
components of an enterprise about which separate, discrete
financial information is available for evaluation by the chief
operating decision maker, or decision-making group, in making
decisions about how to allocate resources and assess
performance. Corillians chief operating decision maker, as
defined under Statement No. 131, is its chief executive
officer.

(a) Geographic
Information

Corillian derives its revenue from a single
operating segment, providing electronic finance software and
applications. Revenue is generated in this segment through
software and service license arrangements.

Results of operations are substantially derived
from United States operations and substantially all assets
reside in the United States. Our results of operations for the
year ended December 31, 2000 and 2001 include approximately
$2.2 million and $13.5 million, respectively, of
expense relating to our international operations. Our
international operations generated approximately
$9.2 million of revenue during the year ended
December 31, 2001. Corillian International, Ltd., our sole
wholly-owned international subsidiary formed in 2000, did not
generate any revenues during the year ended December 31,
2000.

(b) Major
Customers

Revenue from the Companys major customers
are as follows:

|           |  |                         |       |      |  |      |       |  |  |   |       | 
|---------- |  | ----------------------- | ----- | ---- |  | ---- | ----- |  |  | - | ----- | 
|           |  |                        
|           |  | Year Ended December 31,
|           |  |                        
|           |  | 1999                    |       | 2000 |  | 2001
|           |  |                         |       |      |  |     
|           |  |                        
|           |  | (In thousands)         
|Customer A |  | $                       | 1,333 |      |  | $    | 169   |  |  | $ |      | 
|Customer B |  |                         | 1,147 |      |  |      | 2,031 |  |  |   | 531   | 
|Customer C |  |                         |      |      |  |      | 7,282 |  |  |   | 3,976 | 
|Customer D |  |                         |      |      |  |      | 1,746 |  |  |   | 8,682 | 

(c) Revenues
and Cost of Revenues

Corillians chief decision-maker monitors
the revenue streams of licenses and various services. There are
many shared expenses generated by the various revenue streams;
because management believes that any allocation of the expenses
to multiple revenue streams would be impractical and arbitrary,
management has not historically made such allocations
internally. The chief decision-maker does, however, monitor
revenue streams at a more detailed level than those depicted in
the accompanying financial statements.

Revenues derived from the Companys licenses
and services are as follows:

|                                  |  |                         |       |      |  |      |        |  |  |  |        | 
|--------------------------------- |  | ----------------------- | ----- | ---- |  | ---- | ------ |  |  |  | ------ | 
|                                  |  |                        
|                                  |  | Year Ended December 31,
|                                  |  |                        
|                                  |  | 1999                    |       | 2000 |  | 2001
|                                  |  |                         |       |      |  |     
|                                  |  |                        
|                                  |  | (In thousands)         
|License and professional services |  |                         | 7,131 |      |  |      | 29,153 |  |  |  | 49,240 | 
|Post-contractual support          |  |                         | 191   |      |  |      | 841    |  |  |  | 3,366  | 
|Hosting                           |  |                         | 387   |      |  |      | 406    |  |  |  | 1,242  | 
|OneSource services                |  |                         | 27    |      |  |      | 453    |  |  |  |       | 
|                                  |  |                         |       |      |  |      |        |  |  |  |        | 
|                                  |  |                         | 7,736 |      |  |      | 30,853 |  |  |  | 53,848 | 
|                                  |  |                         |       |      |  |      |        |  |  |  |        | 

F-21



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##### Table of Contents



CORILLIAN CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(10) Related Party Transactions

In November 1999, the holder of Series A
preferred stock converted 90,000 shares into common stock. In
November 1999, Corillian repurchased 396,667 shares of
Series A preferred stock from certain shareholders for
$3.77 per share.

In December 1999, Corillian entered into a
software license and services arrangement totaling
$4.5 million, with a holder of Series C preferred
stock. Upon Corillians initial public offering in April
2000, the Series C preferred stock converted into common
stock. Corillian recognized $2.0 million and $531,000 in
revenues for the years ended December 31, 2000 and 2001,
respectively, in connection with this arrangement. At
December 31, 2000 and 2001, accounts receivable from this
customer was $105,000 and $728,000, respectively. At
December 31, 2000 and 2001, deferred revenue from this
customer was $158,000 and $362,000, respectively, and revenue in
excess of billing was $0 and $31,000, respectively. The
arrangement was negotiated at arms-length in a manner consistent
with arrangements with other customers of Corillian.

In April 2000, Corillian entered into a software
license and services arrangement totaling $3.0 million,
with a holder of common stock, which was issued in a private
placement that occurred concurrently with Corillians
initial public offering in April 2000. Corillian recognized
$655,000 and $2.5 million in revenues for the years ended
December 31, 2000 and 2001, respectively, in connection
with this arrangement. At December 31, 2000 and 2001,
accounts receivable from this customer was $169,000 and
$569,000, respectively. At December 31, 2000 and 2001,
deferred revenue from this customer was $648,000 and $476,000,
respectively, and revenue in excess of billing was $0 and
$163,000, respectively. The arrangement was negotiated at
arms-length in a manner consistent with arrangements with other
customers of Corillian.

(11) Acquisitions

(a) InterTech
Systems, Inc.

In April 2000, Corillian issued an aggregate of
138,638 shares of its common stock to acquire InterTech Systems,
Inc. (InterTech), a Minnesota corporation, which was a developer
of data aggregation intellectual property and technology. Of the
138,638 shares of Corillian common stock issued, 69,319 of these
shares are held in escrow for one year to secure the
indemnification obligations of the InterTech shareholders.
Following the provisions of Statement 86, Accounting for the
Costs of Computer Software to Be Sold, Leased or Otherwise
Marketed, Corillian recorded $1.3 million in research
and development expenses consisting of $1.1 million
relating to the 138,638 shares issued to InterTech and $228,000
for consulting and other services relating to the acquisition,
during 2000, in connection with the InterTech transaction.

(b) Hatcher
Associates Inc.

In November 2000, we acquired Hatcher Associates
Inc. (Hatcher), a software integration, implementation and
consulting company focused on applications for consumer banking.
Under the terms of the Stock Purchase Agreement dated
November 24, 2000, between Hatcher and Corillian,
approximately 1.9 million shares of Corillian Common Stock
were issued or reserved for issuance for all outstanding shares
of Hatcher. Corillian also assumed outstanding options for
212,700 shares of the common stock of Hatcher, which converted
into fully vested options for 41,581 shares of Corillian common
stock. As a result of the purchase, Hatcher became a
wholly-owned subsidiary of Corillian. Corillian has since
changed Hatchers name to Corillian Services, Inc.

This acquisition was accounted for by the
purchase method of accounting and, accordingly, the consolidated
statement of operations for the year ended December 31,
2000 includes the results of Hatcher beginning November 24,
2000. The assets acquired and liabilities assumed were recorded
at estimated fair values as determined by Corillians
management based on information currently available at the time
of acquisition and on current assumptions as to future
operations. Of the total purchase price of $25.7 million,

F-22



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##### Table of Contents



CORILLIAN CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

approximately $3.7 was allocated to tangible
assets acquired, offset by approximately $1.4 million of
liabilities assumed, and the remainder was allocated to
intangible assets, including customer relationships of
$2.6 million, workforce of $1.8 million and goodwill
of $19.0 million.

The following unaudited pro forma financial
information combines the results of operations of Corillian and
Hatcher assuming the purchase of Hatcher was consummated at the
beginning of the periods presented. The pro forma results are
not necessarily indicative of what would have occurred if the
purchase had been in effect for the periods presented.

|                                     |  |                       |         |      |  |   |         |  
|------------------------------------ |  | --------------------- | ------- | ---- |  | - | ------- | -
|                                     |  | 1999                  |         | 2000
|                                     |  |                       |         |     
|                                     |  |                      
|                                     |  | (In thousands, except
|                                     |  | per share data)      
|Revenues                             |  | $                     | 21,415  |      |  | $ | 44,491  |  
|Net loss                             |  |                       | (17,399 | )    |  |   | (41,060 | )
|Basic and diluted net loss per share |  |                       | (1.89   | )    |  |   | (1.53   | )

In the fourth quarter of 2001, Corillian
determined that the goodwill and other intangible assets
associated with Hatchers business were impaired. See Note
12 for further discussion of this asset impairment.

(12) Restructuring and Impairment
Charges

During the fourth quarter of 2001, Corillian
initiated restructuring actions to improve operational
efficiency and reduce operating expenses. Charges related to
these restructuring actions were accrued in the period in which
executive management committed to execute such actions. The
restructuring actions taken in 2001 included the reorganization
of operational and management responsibilities and closure of
Corillian Services, Inc.s (formerly Hatcher Associates
Inc.) Los Angeles headquarters. These actions resulted in a net
reduction of worldwide headcount of 125, of which 41 were
employees of Hatcher. Restructuring charges recorded in
connection with these actions totaled $1.3 million and
consisted of severance-related costs of $1.2 million,
$90,000 in losses recognized on the sale of equipment, and lease
cancellation costs of $27,000. The restructuring effort was
substantially completed by December 31, 2001. Of the cash
restructuring charges of $1.0 million, approximately
$889,000 was paid in 2001 and the remainder will be paid during
the first half of 2002.

The following table summarizes the restructuring
charges, the amounts paid and the ending accrual balances for
the year ended December 31, 2001:

|                                                    |  |                |       |          |  |               |     |  |  |   |       | 
|--------------------------------------------------- |  | -------------- | ----- | -------- |  | ------------- | --- |  |  | - | ----- | 
|                                                    |  |                |       | Non-Cash |  |              
|                                                    |  | Accruals       |       | Charges  |  | Total Charges
|                                                    |  |                |       |          |  |              
|                                                    |  |               
|                                                    |  | (In thousands)
|Severance-related payments                          |  | $              | 1,017 |          |  | $             | 200 |  |  | $ | 1,217 | 
|Losses on sale of equipment                         |  |                |      |          |  |               | 90  |  |  |   | 90    | 
|Lease cancellation costs                            |  |                | 27    |          |  |               |    |  |  |   | 27    | 
|                                                    |  |                |       |          |  |               |     |  |  |   |       | 
|                                                    |  |                | 1,044 |          |  | $             | 290 |  |  | $ | 1,334 | 
|                                                    |  |                |       |          |  |               |     |  |  |   |       | 
|Cash payments during 2001                           |  |                | (889  | )        |  |               |     |  |  |   |       | 
|                                                    |  |                |       |          |  |               |     |  |  |   |       | 
|Accrued restructuring charges at
	December 31, 2001 |  | $              | 155   |          |  |               |     |  |  |   |       | 
|                                                    |  |                |       |          |  |               |     |  |  |   |       | 

In accordance with Statement No. 121,
Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed of, management reviewed the
goodwill and other intangible asset balances for impairment as
Hatchers operating results and forecasted future results
indicated the carrying amount of these assets may not be
recoverable. The impairment analysis was based on projected
undiscounted cash flows, which were no longer deemed adequate to
support the carrying value of goodwill and other intangible
assets

F-23



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##### Table of Contents



CORILLIAN CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

associated with the business. Consequently, in
the fourth quarter of 2001, Corillian determined that the
goodwill and other intangible assets were impaired and Corillian
recorded an impairment of the entire goodwill and other
intangible asset balance.

(13) Quarterly Financial
Information  Unaudited

A summary of quarterly financial information
follows:

|                                         |  |                    |        |         |  |              |        |             |  |   |        |   |  |   |        |  
|---------------------------------------- |  | ------------------ | ------ | ------- |  | ------------ | ------ | ----------- |  | - | ------ | - |  | - | ------ | -
|                                         |  |                   
|                                         |  | Quarter Ended 2000
|                                         |  |                   
|                                         |  | March 31           |        | June 30 |  | September 30 |        | December 31
|                                         |  |                    |        |         |  |              |        |            
|Total revenue                            |  | $                  | 3,256  |         |  | $            | 5,723  |             |  | $ | 9,515  |   |  | $ | 12,359 |  
|Gross profit                             |  |                    | 318    |         |  |              | 1,155  |             |  |   | 2,538  |   |  |   | 4,343  |  
|Operating loss                           |  |                    | (7,825 | )       |  |              | (9,932 | )           |  |   | (8,247 | ) |  |   | (9,165 | )
|Net loss                                 |  |                    | (7,612 | )       |  |              | (9,173 | )           |  |   | (7,592 | ) |  |   | (8,878 | )
|Net loss per share, diluted and basic(2) |  |                    | (0.32  | )       |  |              | (0.34  | )           |  |   | (0.24  | ) |  |   | (0.27  | )

|                                         |  |                    |         |         |  |              |        |             |  |   |        |   |  |   |         |     
|---------------------------------------- |  | ------------------ | ------- | ------- |  | ------------ | ------ | ----------- |  | - | ------ | - |  | - | ------- | ----
|                                         |  |                   
|                                         |  | Quarter Ended 2001
|                                         |  |                   
|                                         |  | March 31           |         | June 30 |  | September 30 |        | December 31
|                                         |  |                    |         |         |  |              |        |            
|Total revenue                            |  | $                  | 13,690  |         |  | $            | 15,213 |             |  | $ | 15,031 |   |  | $ | 9,914   |     
|Gross profit                             |  |                    | 5,386   |         |  |              | 6,706  |             |  |   | 7,230  |   |  |   | 4,169   |     
|Operating loss                           |  |                    | (10,339 | )       |  |              | (8,290 | )           |  |   | (6,089 | ) |  |   | (24,280 | )(1)
|Net loss                                 |  |                    | (10,063 | )       |  |              | (8,299 | )           |  |   | (6,263 | ) |  |   | (24,676 | )   
|Net loss per share, diluted and basic(2) |  |                    | (0.29   | )       |  |              | (0.24  | )           |  |   | (0.18  | ) |  |   | (0.71   | )   



---



|    |                                                                                                                                           
|--- | ------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Corillian recorded restructuring and impairment
	charges of $18,097 during the quarter ended December 31,
	2001.                          
|   
|(2) | The four quarters for net loss per share may not
	add for the year because of the different number of shares
	outstanding during the year.

F-24



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##### Table of Contents






INDEX TO EXHIBITS

|        |        |             |  |                                                                                                                                                                                                                                                                                                                                                                                    
|------- | ------ | ----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |        |            
|No.     |        | Description
|        |        |            
|        | 2.1    |             |  | Stock Purchase Agreement, dated as of
	November 24, 2000, by and among Corillian Corporation,
	Hatcher and the Shareholders of Hatcher (incorporated by
	reference from Exhibit 2.1 of Corillians report on
	Form 8-K filed on December 7, 2000)                                                                                                                                  
|        | 2.2    |             |  | Escrow Agreement, dated as of November 24,
	2000, by and among Corillian Corporation, all of the
	Shareholders of Hatcher, Scott C. Collins, as agent and
	representative of the Shareholders of Hatcher, and ChaseMellon
	Shareholder Services, L.L.C., as escrow agent (incorporated by
	reference from Exhibit 2.2 of Corillians report on
	Form 8-K filed on December 7, 2000)
|        | 3.1    |             |  | Articles of Incorporation (incorporated by
	reference to Exhibit 3.2 of Corillians Form S-1,
	as amended, File No. 333-95513)                                                                                                                                                                                                                                                     
|        | 3.2    |             |  | Bylaws (incorporated by reference to
	Exhibit 3.4 of Corillians Form S-1, as amended,
	File No. 333-95513)                                                                                                                                                                                                                                                                        
|        | 4.1    |             |  | Form of Common Stock certificate (incorporated by
	reference to Exhibit 4.1 of Corillians Form S-1,
	as amended, File No. 333-95513)                                                                                                                                                                                                                                              
|        | 4.2    |             |  | Form of Warrant Issued to Bank One (incorporated
	by reference to Exhibit 4.2 of Corillians report on
	Form 10-K for the year ended December 31, 2000)                                                                                                                                                                                                                            
|        | 10.1*  |             |  | Corillians Amended and Restated 2000 Stock
	Incentive Compensation Plan (incorporated by reference to
	Exhibit 99.2 of Corillians 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
	Corillians 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
	Corillians report on Form 10-Q for the quarter ended
	September 30, 2000)                                                                                                                                                                                                 
|        | 10.4   |             |  | Lease between Carramerica Realty Corporation and
	Corillian, dated May 22, 2000 (incorporated by reference to
	Exhibit 10.1 of Corillians report on Form 10-Q
	for the quarter ended March 31, 2000)                                                                                                                                                                              
|        | 10.5   |             |  | Loan Agreement between Corillian Corporation and
	Silicon Valley Bank, dated November 9, 2000 (incorporated
	by reference to Exhibit 10.5 of Corillians report on
	Form 10-K for the year ended December 31, 2000)                                                                                                                                                                
|        | 10.6   |             |  | Sub-underlease among Systems Union Limited,
	Corillian International Limited and Corillian Corporation, dated
	February 8, 2001 (incorporated by reference to
	Exhibit 10.6 of Corillians report on Form 10-K
	for the year ended December 31, 2000)                                                                                                                              
|        | 10.7   |             |  | Master Loan and Security Agreement between
	Corillian and Transamerica Business Credit Corporation, dated as
	of January 28, 2000 (incorporated by reference to
	Exhibit 10.7 of Corillians Form S-1, as amended,
	File No. 333-95513)                                                                                                                                            
|        | 10.8*  |             |  | Form of Stock Option Agreement with certain
	employees (incorporated by reference to Exhibit 10.9 of
	Corillians report on Form 10-Q for the quarter ended
	September 30, 2000)                                                                                                                                                                                                   
|        | 10.9   |             |  | Loan Modification Agreement between Corillian
	Corporation and Silicon Valley Bank, dated March 12, 2002                                                                                                                                                                                                                                                                           
|        | 10.10* |             |  | Employment Agreement, dated as of
	January 23, 2001, between Corillian Corporation and Alex
	Hart (incorporated by reference to Exhibit 10.12 of
	Corillians report on Form 10-K for the year ended
	December 31, 2000)                                                                                                                                                           
|        | 10.11* |             |  | Form of Indemnification Agreement between
	Corillian and its directors and executive officers (incorporated
	by reference to Exhibit 10.13 of Corillians report on
	Form 10-Q for the quarter ended March 31, 2001)                                                                                                                                                               
|        | 21.1*  |             |  | Subsidiaries of the Company (incorporated by
	reference to Exhibit 21.1 of Corillians report on
	Form 10-Q for the quarter ended June 30, 2001)                                                                                                                                                                                                                                   
|        | 23.1   |             |  | Consent of KPMG LLP, Independent Public
	Accountants                                                                                                                                                                                                                                                                                                                               
|        | 24.1   |             |  | Power of Attorney (see page 35).                                                                                                                                                                                                                                                                                                                                                   



---

* Management contract or compensatory plan.