CERN
$66.23
Cerner
($1.08)
(1.60%)
Earnings Details
3rd Quarter September 2019
Thursday, October 24, 2019 4:01:00 PM
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Summary

Cerner Misses

Cerner (CERN) reported 3rd Quarter September 2019 earnings of $0.65 per share on revenue of $1.4 billion. The consensus earnings estimate was $0.66 per share on revenue of $1.4 billion. The Earnings Whisper number was $0.66 per share. Revenue grew 6.7% on a year-over-year basis.

The company said it expects fourth quarter non-GAAP earnings of $0.73 to $0.75 per share on revenue of $1.41 billion to $1.46 billion. The current consensus earnings estimate is $0.74 per share on revenue of $1.47 billion for the quarter ending December 31, 2019.

Cerner Corp is a supplier of health care information technology, and offers software, professional services, medical device integration, remote hosting and employer health and wellness services.

Results
Reported Earnings
$0.65
Earnings Whisper
$0.66
Consensus Estimate
$0.66
Reported Revenue
$1.43 Bil
Revenue Estimate
$1.43 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Cerner Reports Third Quarter 2019 Results

KANSAS CITY, Mo., Oct. 24, 2019 (GLOBE NEWSWIRE) -- Cerner Corporation (Nasdaq: CERN) today announced results for the 2019 third quarter that ended Sept. 28, 2019.

Bookings in the third quarter of 2019 were at the high-end of the company’s expectations at $1.651 billion.

Third quarter 2019 revenue was $1.429 billion, an increase of 7% compared to $1.340 billion in the third quarter of 2018, and in line with the company’s expectations.

On a U.S. Generally Accepted Accounting Principles (GAAP) basis, third quarter 2019 net earnings were $81.9 million and diluted earnings per share were $0.26. Third quarter 2018 GAAP net earnings were $169.4 million and diluted earnings per share were $0.51.   

Adjusted Net Earnings for third quarter 2019 were $211.7 million, compared to $209.4 million of Adjusted Net Earnings in the third quarter of 2018. Adjusted Diluted Earnings Per Share were $0.66 in the third quarter of 2019, in line with the company’s expectations and up 5% compared to $0.63 of Adjusted Diluted Earnings Per Share in the year-ago quarter.

Adjusted Net Earnings and Adjusted Diluted Earnings Per Share are not recognized terms under GAAP.  These non-GAAP financial measures should not be substituted for GAAP net earnings or GAAP diluted earnings per share, respectively, as measures of Cerner’s performance, but instead should be utilized as supplemental measures of financial performance in evaluating our business. Please see the accompanying schedule, titled “Reconciliation of GAAP Results to Non-GAAP Results,” where our non-GAAP financial measures are defined and reconciled to the most comparable GAAP measures.

Other Highlights:

  • Third quarter operating cash flow of $351.4 million and Free Cash Flow of $174.4 million. Free Cash Flow is a non-GAAP financial measure defined as GAAP cash flows from operating activities less capital purchases and capitalized software development costs. Please see the accompanying schedule, titled “Reconciliation of GAAP Results to Non-GAAP Results.”
  • Third quarter days sales outstanding of 74 days, down from 78 days in the second quarter and 82 days in the year-ago quarter.
  • Total backlog of $13.31 billion

“I am pleased with our execution in the third quarter as we again delivered against the expectations we set while also continuing to advance Cerner’s broader transformation,” said Brent Shafer, chairman and CEO, Cerner  “I believe the balanced focus of near-term operational improvements combined with our innovation and growth strategies position Cerner to deliver sustainable and profitable growth.”

Future Period Guidance
Cerner currently expects:

  • Fourth quarter 2019 revenue between $1.410 billion and $1.460 billion.
  • Fourth quarter 2019 Adjusted Diluted Earnings Per Share between $0.73 and $0.75. *
  • Fourth quarter 2019 new business bookings between $1.450 billion and $1.650 billion.
 *Future period non-GAAP guidance includes adjustments for items not indicative of our core operations, which may include, without limitation, items included in the accompanying schedule, titled “Reconciliation of GAAP Results to Non-GAAP Results.” Such adjustments may be affected by changes in ongoing assumptions and judgments, as well as nonrecurring, unusual or unanticipated charges, expenses or gains or other items that may not directly correlate to the underlying performance of our business operations. The exact amounts of these adjustments are not currently determinable but may be significant. It is therefore not practicable to provide the comparable GAAP measures or reconcile this non-GAAP guidance to the most comparable GAAP measures.

Earnings Conference Call
Cerner will host an earnings conference call to provide additional detail on the company’s results and outlook at 3:30 p.m. CT on Oct. 24, 2019. On the call, Cerner will discuss its third quarter 2019 results and answer questions from the investment community. The call may also include discussion of Cerner developments, and forward-looking and other material information about business and financial matters. The dial-in number for the conference call is (678) 509-7542; the passcode is Cerner. Cerner recommends joining the call 15 minutes early for registration.  

An audio webcast will be available live and archived on Cerner’s website at www.cerner.com under the About Us section (click Investor Relations, then Presentations and Webcasts).

About Cerner
Cerner’s health technologies connect people and information systems at more than 27,500 contracted provider facilities worldwide dedicated to creating smarter and better care for individuals and communities. Recognized globally for innovation, Cerner assists clinicians in making care decisions and assists organizations in managing the health of their populations. The company also offers an integrated clinical and financial system to help manage day-to-day revenue functions, as well as a wide range of services to support clinical, financial and operational needs, focused on people. For more information, visit Cerner.com, The Cerner Blog, The Cerner Podcast or connect on Facebook, Instagram, LinkedIn or Twitter.  Nasdaq: CERN. Smarter Care. Better Outcomes. Healthier You.

Certain trademarks, service marks and logos set forth herein are property of Cerner Corporation and/or its subsidiaries.

All statements in this press release that do not directly and exclusively relate to historical facts constitute forward-looking statements.  These forward-looking statements are based on the current beliefs, expectations and assumptions of Cerner's management with respect to future events and are subject to a number of significant risks and uncertainties.  It is important to note that Cerner's performance, and actual results, financial condition or business could differ materially from those expressed in such forward-looking statements. The words “expects”, “guidance”, “position”, “believe”, “expectations”, “plan”, “outlook”, “future”, “approximately”, “targeted”, “intend”, “potential”, “opportunity” or the negative of these words, variations thereof or similar expressions are intended to identify such forward-looking statements. For example, our forward-looking statements include statements regarding future period guidance.  Factors that could cause or contribute to such differences include, but are not limited to the possibility of significant costs and reputational harm related to product-related liabilities; potential claims for system errors and warranties; the possibility of interruption at our data centers or client support facilities, or those of third parties with whom we have contracted (such as public cloud providers), that could expose us to significant costs and reputational harm; the possibility of increased expenses, exposure to legal claims and regulatory actions and reputational harm associated with a cyberattack or other breach in our IT security or the IT security of third parties on which we rely; our proprietary technology may be subject to claims for infringement or misappropriation of intellectual property rights of others, or may be infringed or misappropriated by others; potential claims or other risks associated with relying on open source software in our proprietary software solutions or technology-enabled services; material adverse resolution of legal proceedings or other claims; risks associated with our global operations, including without limitation greater difficulty in collecting accounts receivable; risks associated with fluctuations in foreign currency exchange rates; changes in tax laws, regulations or guidance that could adversely affect our tax position and/or challenges to our tax positions in the U.S. and non-U.S. countries; risks associated with the unexpected loss or recruitment and retention of key personnel or the failure to successfully develop and execute succession planning to assure transitions of key associates and their knowledge, relationships and expertise; risks related to our dependence on strategic relationships and third party suppliers; risks inherent with business acquisitions and combinations and the integration thereof into our business or relating to disputes involving such acquisitions or combinations; risks associated with volatility and disruption resulting from global economic or market conditions; significant competition and our ability to quickly respond to market changes, changing technologies and evolving pricing and deployment methods and to bring competitive new solutions, devices, features and services to market in a timely fashion; managing growth in the new markets in which we offer solutions, health care devices or services; long sales cycles for our solutions and services; risks inherent in contracting with government clients, including without limitation, complying with strict compliance and disclosure obligations, navigating complex procurement rules and processes and defending against bid protests; risks associated with our outstanding and future indebtedness, such as compliance with restrictive covenants, which may limit our flexibility to operate our business; changes in accounting standards; the potential for losses resulting from asset impairment charges; changing political, economic, regulatory and judicial influences, which could impact the purchasing practices and operations of our clients and increase costs to deliver compliant solutions and services; non-compliance with laws, government regulation or certain industry initiatives or failure to deliver solutions or services that enable our clients to comply with laws or regulations applicable to their businesses; variations in our quarterly operating results; potential variations in our sales forecasts compared to actual sales; volatility in the trading price of our common stock and the timing and volume of market activity; inability to manage organizational change and reduce expenses and costs to the extent currently anticipated; risks that Cerner’s revenue growth may be lower than anticipated and/or that the mix of revenue shifts to low margin revenue; risk that our capital programs will not be fully implemented or enhance long-term shareholder value; and risks that Cerner’s business may be negatively affected as a result of future proxy fights or the actions of activist shareholders. Additional discussion of these and other risks, uncertainties and factors affecting Cerner's business is contained in Cerner's filings with the Securities and Exchange Commission. The reader should not place undue reliance on forward-looking statements, since the statements speak only as of the date that they are made. Except as required by law, Cerner undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events, or changes in our business, results of operations or financial condition over time.

Investor Contact:  Allan Kells, (816) 201-2445, akells@cerner.com
Media Contact:  Misti Preston, (816) 299-2037, misti.preston@cerner.com  



       
CERNER CORPORATION AND SUBSIDIARIES 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 
For the three and nine months ended September 28, 2019 and September 29, 2018 
(unaudited)      
       
(In thousands, except per share data) Three Months Ended Nine Months Ended
   2019  2018   2019  2018 
       
Revenues $1,429,428 $1,340,073  $4,250,366 $4,000,661 
Costs of revenue  271,778  230,332   793,655  700,393 
Margin  1,157,650  1,109,741   3,456,711  3,300,268 
       
Operating expenses      
Sales and client service  707,743  605,946   2,026,825  1,830,999 
Software development  187,526  172,297   548,934  502,192 
General and administrative  152,321  102,789   398,305  290,547 
Amortization of acquisition-related intangibles  21,283  21,553   64,809  65,872 
Total operating expenses  1,068,873  902,585  3,038,873  2,689,610 
       
Operating earnings  88,777  207,156   417,838  610,658 
       
Other income, net  13,535  6,943   44,973  18,404 
       
Earnings before income taxes  102,312  214,099   462,811  629,062 
Income taxes  (20,377) (44,718)  (87,688) (130,323)
Net earnings $81,935 $169,381  $375,123 $498,739 
       
Basic earnings per share $0.26 $0.51  $1.17 $1.51 
       
Basic weighted average shares outstanding  315,876  329,342   320,282  330,789 
       
Diluted earnings per share $0.26 $0.51  $1.16 $1.49 
       
Diluted weighted average shares outstanding  319,113  332,937   323,361  334,493 
       
Note 1: Our revenues by business model for the three and nine months ended September 28, 2019 and September 29, 2018 were as follows:
       
(In thousands) Three Months Ended Nine Months Ended
   2019  2018   2019  2018 
       
Licensed software $154,533 $139,888  $506,123 $447,095 
Technology resale  70,175  60,378   186,450  199,011 
Subscriptions  91,904  79,115   265,965  238,702 
Professional services  507,455  456,725   1,483,201  1,345,311 
Managed services  302,435  302,000   904,479  855,857 
Support and maintenance  277,294  277,780   830,668  841,300 
Reimbursed travel  25,632  24,187   73,480  73,385 
Total revenues $1,429,428 $1,340,073  $4,250,366 $4,000,661 
       


       
CERNER CORPORATION AND SUBSIDIARIES 
RECONCILIATION OF GAAP RESULTS TO NON-GAAP RESULTS 
For the three and nine months ended September 28, 2019 and September 29, 2018 
(unaudited)      
       
ADJUSTED OPERATING EXPENSES
       
(In thousands) Three Months Ended Nine Months Ended
   2019  2018   2019  2018 
       
Operating expenses (GAAP) $1,068,873 $902,585  $3,038,873 $2,689,610 
       
Share-based compensation expense  (31,782) (26,882)  (77,651) (79,620)
Health Services acquisition-related amortization  (20,612) (20,685)  (62,571) (62,833)
Organizational restructuring and other expense  (117,403) (2,924)  (174,396) (2,924)
Charge related to client dispute       (20,000)  
Vendor settlement       (6,791)  
       
Adjusted Operating Expenses (non-GAAP) $899,076 $852,094  $2,697,464 $2,544,233 
       
ADJUSTED OPERATING EARNINGS AND ADJUSTED OPERATING MARGIN
       
(In thousands) Three Months Ended Nine Months Ended
   2019  2018   2019  2018 
       
Operating earnings (GAAP) $88,777 $207,156  $417,838 $610,658 
       
Share-based compensation expense  31,782  26,882   77,651  79,620 
Health Services acquisition-related amortization  20,612  20,685   62,571  62,833 
Organizational restructuring and other expense  117,403  2,924   174,396  2,924 
Charge related to client dispute       20,000   
Vendor settlement       6,791   
       
Adjusted Operating Earnings (non-GAAP) $258,574 $257,647  $759,247 $756,035 
       
Operating Margin (GAAP)  6.21% 15.46%  9.83% 15.26%
       
Adjusted Operating Margin (non-GAAP)  18.09% 19.23%  17.86% 18.90%
       
ADJUSTED NET EARNINGS AND ADJUSTED DILUTED EARNINGS PER SHARE
       
(In thousands, except per share data) Three Months Ended Nine Months Ended
   2019  2018   2019  2018 
       
Net earnings (GAAP) $81,935 $169,381  $375,123 $498,739 
       
Pre-tax adjustments for Adjusted Net Earnings:      
Share-based compensation expense  31,782  26,882   77,651  79,620 
Health Services acquisition-related amortization  20,612  20,685   62,571  62,833 
Organizational restructuring and other expense  117,403  2,924   174,396  2,924 
Charge related to client dispute       20,000   
Vendor settlement       6,791   
Investment gains  (8,722)    (24,231)  
       
After-tax adjustments for Adjusted Net Earnings:      
Income tax effect of pre-tax adjustments  (32,079) (10,545)  (60,411) (30,098)
Share-based compensation permanent tax items  727  121   (6,961) (3,615)
       
Adjusted Net Earnings (non-GAAP) $211,658 $209,448  $624,929 $610,403 
       
Diluted weighted average shares outstanding  319,113  332,937   323,361  334,493 
       
Adjusted Diluted Earnings Per Share (non-GAAP) $0.66 $0.63  $1.93 $1.82 
       
FREE CASH FLOW
       
(In thousands) Three Months Ended Nine Months Ended
   2019  2018   2019  2018 
       
Cash flows from operating activities (GAAP) $351,448 $338,454  $875,524 $1,047,120 
Capital purchases  (110,714) (116,957)  (388,588) (305,951)
Capitalized software development costs  (66,382) (66,171)  (211,284) (209,122)
Free Cash Flow (non-GAAP) $174,352 $155,326  $275,652 $532,047 
       
Cash flows from investing activities (GAAP) $(145,100)$(350,912) $(436,387)$(562,094)
       
Cash flows from financing activities (GAAP) $(407,953)$4,576  $(312,805)$(345,704)
       
Explanation of Non-GAAP Financial Measures      
       
We report our financial results in accordance with accounting principles generally accepted in the United States of America ("GAAP"). However, we supplement our GAAP results with certain non-GAAP financial measures, which we believe enable investors to better understand and evaluate our ongoing operating results and allows for greater transparency in the review and understanding of our overall financial, operational and economic performance. These non-GAAP financial measures are not meant to be considered in isolation, as a substitute for, or superior to GAAP results and investors should be aware that non-GAAP measures have inherent limitations and should be read only in conjunction with Cerner's consolidated financial statements prepared in accordance with GAAP. These non-GAAP measures may also be different from similar non-GAAP financial measures used by other companies and may not be comparable to similarly titled captions of other companies due to potential inconsistencies in the method of calculations. We provide the measures of Adjusted Operating Expenses, Adjusted Operating Earnings, Adjusted Operating Margin, Adjusted Net Earnings and Adjusted Diluted Earnings Per Share as such measures are used by management, along with GAAP results, to analyze Cerner's business, make strategic decisions, assess long-term trends on a comparable basis, and for management compensation purposes. We provide the measure of Free Cash Flow as such measure takes into account certain capital expenditures necessary to operate our business. Free Cash Flow is used by management, along with GAAP results, to analyze our earnings quality and overall cash generation of the business, and for management compensation purposes.
       
We calculate each of our non-GAAP financial measures as follows:
       
Adjusted Operating Expenses - Consists of GAAP operating expenses adjusted for: (i) share-based compensation expense, (ii) Health Services acquisition-related amortization, (iii) organizational restructuring and other expense, (iv) a charge related to a client dispute, and (v) a vendor settlement.
       
Adjusted Operating Earnings - Consists of GAAP operating earnings adjusted for: (i) share-based compensation expense, (ii) Health Services acquisition-related amortization, (iii) organizational restructuring and other expense, (iv) a charge related to a client dispute, and (v) a vendor settlement.
       
Adjusted Operating Margin - Consists of Adjusted Operating Earnings, as defined above, divided by revenues, in the applicable period; the result presented as a percentage.
       
Adjusted Net Earnings - Consists of GAAP net earnings adjusted for: (i) share-based compensation expense, (ii) Health Services acquisition-related amortization, (iii) organizational restructuring and other expense, (iv) a charge related to a client dispute, (v) a vendor settlement, (vi) investment gains, (vii) the income tax effect of the aforementioned items, and (viii) share-based compensation permanent tax items.
       
Adjusted Diluted Earnings Per Share - Consists of Adjusted Net Earnings, as defined above, divided by diluted weighted average shares outstanding, in the applicable period.
       
Free Cash Flow - Consists of GAAP cash flows from operating activities, less capital purchases and capitalized software development costs.
       
Adjustments included in the calculations above are described below:
       
Share-based compensation expense - Non-cash expense arising from our equity compensation and stock purchase plans available to our associates and directors. We exclude share-based compensation expense as we believe the amount of such non-cash expenses in any specific period may not directly correlate to the underlying performance of our business operations. Share-based compensation expense is included in our Condensed Consolidated Statements of Operations as follows:
       
(In thousands) Three Months Ended Nine Months Ended
   2019  2018   2019  2018 
       
Sales and client service $14,671 $10,131  $39,019 $35,917 
Software development  4,191  5,206   12,769  16,367 
General and administrative  12,920  11,545   25,863  27,336 
Total share-based compensation expense $31,782 $26,882  $77,651 $79,620 
       
Health Services acquisition-related amortization - Non-cash expense consisting of the amortization of customer relationships, acquired technology, and trade name intangible assets recorded in connection with our acquisition of the Health Services business in February 2015. We exclude Health Services acquisition-related amortization as we believe the amount of such non-cash expenses in any specific period may not directly correlate to the underlying performance of our business operations. Such amount is included in our Condensed Consolidated Statements of Operations in the caption "Amortization of acquisition-related intangibles."
       
Organizational restructuring and other expense - Consists of certain charges incurred in connection with our operational improvement initiatives. Expenses in connection with these efforts may include, but are not limited to, consultant and other professional services fees, employee separation costs, contract termination costs, and other such related expenses. We exclude organizational restructuring and other expense as we believe the amount of such expense in any specific period may not directly correlate to the underlying performance of our business operations. Organizational restructuring and other expense is included in our Condensed Consolidated Statements of Operations as follows:
 
(In thousands) Three Months Ended Nine Months Ended
   2019  2018   2019  2018 
       
Sales and client service $59,602 $  $59,602 $ 
General and administrative  57,801  2,924   114,794  2,924 
Total organizational restructuring and other expense $117,403 $2,924  $174,396 $2,924 
       
Charge related to client dispute - Consists of a pre-tax charge related to a dispute with a current client. We have excluded this charge as we believe the amount of such charge does not directly correlate to the underlying performance of our business operations in the period it was recorded. Such charge is included in our Condensed Consolidated Statements of Operations in the caption "Sales and client service" expense.
       
Vendor Settlement - Consists of a pre-tax charge to settle disputes with a former vendor. We have excluded this charge as we believe the amount of such charge does not directly correlate to the underlying performance of our business operations in the period it was recorded. Such charge is included in our Condensed Consolidated Statements of Operations in the caption "General and administrative" expense.
       
Investment gains - Consists of a $16 million gain recognized on the disposition of one of our equity investments in the second quarter of 2019, and a $9 million unrealized gain recognized in the third quarter of 2019 on another one of our equity investments, both of which were accounted for in accordance with Accounting Standards Codification Topic 321, Investments-Equity Securities. We have excluded these gains as we believe the amounts of such gains do not directly correlate to the underlying performance of our business operations in the periods they were recorded. Such gains are included in our Condensed Consolidated Statements of Operations in the caption "Other income, net."
       
Income tax effect of pre-tax adjustments - The GAAP effective income tax rate for the applicable quarterly period is applied to pre-tax adjustments for Adjusted Net Earnings.
       
Share-based compensation permanent tax items - Consists of permanent items impacting the Company's income tax provision related to our share-based compensation arrangements, including net excess tax benefits recognized upon the exercise of stock options. We exclude such items as we believe the amount of such items in any specific period may not directly correlate to the underlying performance of our business operations. Such amount is included in our Condensed Consolidated Statements of Operations in the caption "Income taxes."
       


   
CERNER CORPORATION AND SUBSIDIARIES 
CONDENSED CONSOLIDATED BALANCE SHEETS 
As of September 28, 2019 and December 29, 2018 
(unaudited)  
   
(In thousands) 2019  2018 
   
Assets  
Current assets:  
Cash and cash equivalents$496,430 $374,126 
Short-term investments 136,266  401,285 
Receivables, net 1,154,980  1,183,494 
Inventory 23,155  25,029 
Prepaid expenses and other 402,247  334,870 
Total current assets 2,213,078  2,318,804 
   
Property and equipment, net 1,865,924  1,743,575 
Right-of-use assets 121,746   
Software development costs, net 935,170  894,512 
Goodwill 844,926  847,544 
Intangible assets, net 347,376  405,305 
Long-term investments 403,435  300,046 
Other assets 205,775  198,850 
Total assets$6,937,430 $6,708,636 
   
Liabilities and Shareholders’ Equity  
Current liabilities:  
Accounts payable$275,916 $293,534 
Current installments of long-term debt and capital lease obligations   4,914 
Deferred revenue 308,444  399,189 
Accrued payroll and tax withholdings 264,049  195,931 
Other current liabilities 153,187  69,122 
Total current liabilities 1,001,596  962,690 
   
Long-term debt 1,038,567  438,802 
Deferred income taxes 353,711  336,379 
Other liabilities 132,289  42,376 
Total liabilities 2,526,163  1,780,247 
   
Shareholders’ Equity:  
Common stock 3,662  3,622 
Additional paid-in capital 1,806,939  1,559,562 
Retained earnings 5,836,984  5,576,525 
Treasury stock (3,107,768) (2,107,768)
Accumulated other comprehensive loss, net (128,550) (103,552)
Total shareholders’ equity 4,411,267  4,928,389 
Total liabilities and shareholders’ equity$6,937,430 $6,708,636 
   


       
CERNER CORPORATION AND SUBSIDIARIES 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 
For the three and nine months ended September 28, 2019 and September 29, 2018 
(unaudited)      
       
  Three Months Ended Nine Months Ended
(In thousands)  2019  2018   2019  2018 
       
CASH FLOWS FROM OPERATING ACTIVITIES:      
Net earnings $81,935 $169,381  $375,123 $498,739 
Adjustments to reconcile net earnings to net cash provided by operating activities:      
Depreciation and amortization  173,073  161,103   509,559  473,748 
Share-based compensation expense  30,537  25,209   73,421  74,348 
Provision for deferred income taxes  7,639  14,676   22,793  16,412 
Investment gains  (8,722)    (24,231)  
Changes in assets and liabilities:      
Receivables, net  72,397  (64,003)  24,558  (250,042)
Inventory  2  (9,396)  1,877  (9,006)
Prepaid expenses and other  857  (18,982)  (75,191) 162,053 
Accounts payable  (28,326) (21,602)  (3,346) 21,762 
Accrued income taxes  774  (17,069)  (795) (9,150)
Deferred revenue  (11,310) 74,448   (89,400) 34,316 
Other accrued liabilities  32,592  24,689   61,156  33,940 
       
Net cash provided by operating activities  351,448  338,454   875,524  1,047,120 
       
CASH FLOWS FROM INVESTING ACTIVITIES:      
Capital purchases  (110,714) (116,957)  (388,588) (305,951)
Capitalized software development costs  (66,382) (66,171)  (211,284) (209,122)
Purchases of investments  (177,256) (282,564)  (317,979) (477,156)
Sales and maturities of investments  217,589  122,711   507,258  454,439 
Purchase of other intangibles  (8,337) (7,931)  (25,794) (24,304)
       
Net cash used in investing activities  (145,100) (350,912)  (436,387) (562,094)
       
CASH FLOWS FROM FINANCING ACTIVITIES:      
Long-term debt issuance       600,000   
Repayment of long-term debt         (75,000)
Proceeds from exercise of stock options  63,474  60,658   188,474  82,001 
Payments to taxing authorities in connection with shares directly withheld from associates  (10,134) (2,441)  (14,994) (9,749)
Treasury stock purchases  (400,000) (57,586)  (1,020,542) (345,210)
Dividends paid  (57,293)    (57,293)  
Other  (4,000) 3,945   (8,450) 2,254 
       
Net cash provided by (used in) financing activities  (407,953) 4,576   (312,805) (345,704)
       
Effect of exchange rate changes on cash and cash equivalents  (4,889) (4,472)  (4,028) (11,631)
       
Net increase (decrease) in cash and cash equivalents  (206,494) (12,354)  122,304  127,691 
Cash and cash equivalents at beginning of period  702,924  510,968   374,126  370,923 
       
Cash and cash equivalents at end of period $496,430 $498,614  $496,430 $498,614 
       


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Source: Cerner Corporation