The ABCs of systemic healthcare reform - Cerner Corporation

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(13) Commitments In prior years, the Company leased space to unrelated parties in its North Kansas City headquarters complex and in other business locations under noncancelable operating leases. Included in other revenues is rental income of $305,000 in 2006. The Company did not receive rental income in 2007 or 2008. The Company is committed under operating leases for office space and computer equipment through October 2027. Rent expense for office and warehouse space for the Company’s regional and global offices for 2008, 2007, and 2006 was $16,091,000, $12,436,000 and $11,391,000, respectively. Aggregate minimum future payments under these noncancelable operating leases are as follows: (14) Segment Reporting The Company has two operating segments, Domestic and Global. Revenues are derived primarily from the sale of clinical, financial and administrative information systems and solutions. The cost of revenues includes the cost of third party consulting services, computer hardware and sublicensed software purchased from computer and software manufacturers for delivery to clients. It also includes the cost of hardware maintenance and sublicensed software support subcontracted to the manufacturers. Operating expenses incurred by the geographic business segments consist of sales and client service expenses including salaries of sales and client service personnel, communications expenses and unreimbursed travel expenses. Performance of the segments is assessed at the operating earnings level and, therefore, the segment operations have been presented as such. “Other” includes revenues not generated by the operating segments and expenses such as software development, marketing, general and administrative, share-based compensation expense and depreciation that have not been allocated to the operating segments. It is impractical for the Company to track assets by geographical business segment. 82
Accounting policies for each of the reportable segments are the same as those used on a consolidated basis. The following table presents a summary of the operating information for the years ended January 3, 2009, December 29, 2007 and December 30, 2006. 83
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The ABCs of systemic healthcare ref
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ANNUAL REPORT 2008 1
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Board of Directors Neal L. Patterso
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To Cerner’s Shareholders, Clients
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As we have communicated, our long-t
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Key provisions of the ARRA designat
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most of our healthcare spending rel
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Appendix: Cerner’s Business Model
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that have allowed us to continue me
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A key point regarding our margin ex
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ANNUAL REPORT 2008 FORM 10-K 21
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PART I Item 1. Business Overview Ce
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total hours of effort needed to imp
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warranties concerning material erro
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known and unknown liabilities; 7) w
Page 33 and 34: Certain of our competitors have gre
Page 35 and 36: In July 2007, we entered into a lea
Page 37 and 38: Item 6. Selected Financial Data (1)
Page 39 and 40: Results Overview In a challenging e
Page 41 and 42: dispensing devices. Included in 200
Page 43 and 44: London which significantly enhances
Page 45 and 46: Net interest income was $1,269,000
Page 47 and 48: Liquidity and Capital Resources The
Page 49 and 50: The effects of inflation on the Com
Page 51 and 52: interest rates regularly reset ever
Page 53 and 54: PART III Item 10. Directors, Execut
Page 55 and 56: PART IV Item 15. Exhibits and Finan
Page 57 and 58: 10(r) 10(s) 10(t) 10(u) Cerner Corp
Page 59 and 60: Report of Independent Registered Pu
Page 65 and 66: (1) Summary of Significant Accounti
Page 67 and 68: Deferred revenue is comprised of de
Page 69 and 70: (n) Goodwill and Other Intangible A
Page 71 and 72: amounts that include the amounts at
Page 73 and 74: The Company performs ongoing credit
Page 75 and 76: The aggregate maturities for the Co
Page 77 and 78: Concurrently with the recognition o
Page 79 and 80: exercise and associate departure be
Page 81 and 82: own directly or indirectly, or hold
Page 83: The effective income tax rates for
Page 87 and 88: Stock Price Performance The followi
Page 92: World Headquarters Cerner Worldwide
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The ABCs of systemic healthcare reform - Cerner Corporation

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