10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(X)    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: December 29, 2012

OR

( )    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________

Commission File Number: 0-15386

CERNER CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	43-1196944
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

2800 Rockcreek Parkway North Kansas City, MO	64117
(Address of principal executive offices)	(Zip Code)

(816) 221-1024

(Registrant's telephone number, including area code)

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

Title of each class	Name of each exchange on which registered
Common Stock, $0.01 par value per share	The NASDAQ Stock Market LLC

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

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes [X]     No [  ]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes [  ]     No [X]

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 such filing requirements for the past 90 days.

Yes [X]     No [  ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes [X]     No [  ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [X]     Accelerated filer [  ]     Non-accelerated filer [  ]     Smaller reporting company [  ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes [  ]       No [X]

As of June 30, 2012, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was $12,351,700,511 based on the closing sale price as reported on the NASDAQ Global Select Market.

Indicate the number of shares outstanding of the issuer’s classes of common stock, as of the latest practicable date.

Class	Outstanding at February 1, 2013
Common Stock, $0.01 par value per share	172,207,737 shares

DOCUMENTS INCORPORATED BY REFERENCE

Document	Parts into Which Incorporated
Proxy Statement for the Annual Shareholders' Meeting to be held May 24, 2013	Part III

CERNER CORPORATION

TABLE OF CONTENTS

Part I
Item 1.	Business	3
Item 1A.	Risk Factors	10
Item 1B.	Unresolved Staff Comments	19
Item 2.	Properties	19
Item 3.	Legal Proceedings	19
Item 4.	Mine Safety Disclosures	19
Part II
Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	20
Item 6.	Selected Financial Data	21
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	22
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	34
Item 8.	Financial Statements and Supplementary Data	34
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	34
Item 9A.	Controls and Procedures	34
Item 9B.	Other Information	35
Part III
Item 10.	Directors, Executive Officers and Corporate Governance	36
Item 11.	Executive Compensation	36
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	36
Item 13.	Certain Relationships and Related Transactions, and Director Independence	37
Item 14.	Principal Accountant Fees and Services	37
Part IV
Item 15.	Exhibits and Financial Statement Schedules	38
Signatures		39

PART I.

Item 1. Business

Overview

Cerner Corporation started doing business in 1980, and it was organized as a Delaware corporation in 1986. Unless the context otherwise requires, references in this report to “Cerner,” the “Company,” “we,” “us” or “our” mean Cerner Corporation and its subsidiaries.

Our corporate world headquarters is located in a Company-owned office park in North Kansas City, Missouri, with our principal place of business located at 2800 Rockcreek Parkway, North Kansas City, Missouri 64117. Our telephone number is 816.221.1024. Our Web site address, which we use to communicate important business information, can be accessed at: www.cerner.com. We make our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports available free of charge on or through this Web site as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission (SEC).

Cerner’s mission is to contribute to the systemic improvement of health care delivery and the health of communities. We are a leading supplier of health care information technology (HCIT) solutions, services, devices and hardware. Our solutions optimize processes and help eliminate errors, variance and waste for health care organizations ranging from single-doctor practices to entire countries, for the pharmaceutical and medical device industries, and for the field of health care as a whole. These solutions are licensed by approximately 10,000 facilities around the world, including more than 2,700 hospitals; 4,150 physician practices; 45,000 physicians; 550 ambulatory facilities, such as laboratories, ambulatory centers, behavioral health centers, cardiac facilities, radiology clinics and surgery centers; 800 home health facilities; 45 employer sites and 1,750 retail pharmacies.

We design and develop most of our software solutions on the unified Cerner Millennium^® architecture, a person-centric computing framework, which combines clinical, financial and management information systems. This architecture allows providers to securely access an individual’s electronic health record (EHR) at the point of care, and it organizes and proactively delivers information to meet the specific needs of physicians, nurses, laboratory technicians, pharmacists, front- and back-office professionals and consumers. In recent years, we have extended this platform to include the next evolution of Cerner Millennium, Millennium+™, which leverages the cloud and enables greater mobility. We have also created the Healthe Intent^TM platform, a cloud-based platform that enables a new generation of solutions to leverage the increasing amount of data being captured as the health care industry is digitized. On the Healthe Intent platform, we are building solutions based on sophisticated, statistical algorithms that are intended to help providers predict and improve outcomes, control costs, and improve quality.

We offer a broad range of services, including implementation and training, remote hosting, operational management services, revenue cycle services, support and maintenance, health care data analysis, clinical process optimization, transaction processing, employer health centers, employee wellness programs and third party administrator (TPA) services for employer-based health plans.

In addition to software and services, we offer a wide range of complementary hardware and devices, both directly from Cerner and as a reseller for third parties.

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The following table presents our consolidated revenues by major solutions and services and by segment, as a percentage of total revenues:

	For the Years Ended
	2012		2011		2010
Revenues by Solutions & Services
System sales	34	%	32	%	30	%
Support and maintenance	23	%	25	%	28	%
Services	41	%	41	%	40	%
Reimbursed travel	2	%	2	%	2	%
	100	%	100	%	100	%
Revenues by Segment
Domestic	88	%	86	%	84	%
Global	12	%	14	%	16	%
	100	%	100	%	100	%

Health Care and Health Care IT Industry

We believe there are several factors that are favorable for the HCIT industry over the next decade. The Centers for Medicare and Medicaid Services (CMS) estimates United States health care spending in 2012 at $2.8 trillion, or 17.9 percent of Gross Domestic Product (GDP), and projects it to be 19.2 percent of GDP by 2020. We believe this growing cost of our health care system is unsustainable. We also believe the intelligent use of information systems can help reduce costs while also improving health outcomes. Further, most United States health care providers recognize that they must invest in HCIT to meet regulatory requirements, comply with government reimbursement requirements, and qualify for incentives. The importance of HCIT in facilitating this compliance along with the benefits of improving safety, efficiency and reducing costs, leads to investments in HCIT being viewed as more strategic than many other capital purchases, and supports our belief that we are positioned for continued growth.

An ongoing contributor to our growth is the inclusion of HCIT incentives in the American Recovery and Reinvestment Act (ARRA). The Health Information Technology for Economic and Clinical Health (HITECH) provisions within ARRA include more than $35 billion in incentives for health care organizations to modernize operations through “Meaningful Use” of HCIT. Hospitals and physicians that met the first of three stages of Meaningful Use criteria of the ARRA began receiving incentive funds in 2011, and the ongoing incentive program is contributing to continued demand for HCIT solutions and services in the United States. In addition to the demand created by existing clients seeking solutions and services to ensure they are positioned to qualify for incentives, we are seeing significant demand outside of our installed base from hospitals that previously chose a system from another supplier. We believe these hospitals are looking to change to a platform that better positions them for success as later stages of Meaningful Use and other regulatory requirements require more sophisticated IT systems.

Another trend in the United States marketplace that we believe will contribute to demand is the shift away from fee-for-service or volume-based reimbursement towards value-based or outcomes-based reimbursement. Payers, including health insurance companies and federal and state governments, are implementing programs to link reimbursement to quality measurements and outcomes, and we believe this alignment creates significant financial motivation for HCIT adoption. Within our current client base, we estimate that there could be more than $5 billion of annual reimbursement at risk tied to Value Based Purchasing, Medicare 30-day readmission rules, and quality reporting requirements by 2017. In order to comply with these programs, we believe our clients will need to expand their data analytics and reporting capabilities through the use of HCIT solutions and services. Ultimately, we believe all of these shifts are leading to an environment in which health care providers will become accountable for proactively managing the health of the populations they serve, and this will require ongoing investment in sophisticated information technology solutions that will enable them to predict when intervention is needed so they can improve outcomes and lower the cost of providing care.

In recent years, we have also seen a shift in the United States marketplace towards a preference for a single platform across inpatient and ambulatory settings. The number of physicians employed by hospitals has increased significantly as hospitals have acquired physician groups in order to ensure a consistent stream of referrals, and health systems are recognizing the benefit of having a single patient record at the hospital and the physician office. We are benefiting from this trend due to our unified Cerner Millennium platform that spans multiple venues and due to the significant enhancements we have made to

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our physician solutions in recent years.

Outside the United States, the economic downturn of the last several years has impacted and could continue to impact our results of operations. However, we believe long-term revenue growth opportunities outside the United States remain significant because other countries are also focused on controlling health care spending while improving the efficiency and quality of care that is delivered, and many of these countries recognize HCIT as an important piece of the solution to these issues.

Cerner Vision and Growth Strategy

For more than 30 years, Cerner has been executing its vision to make health care safer and more efficient. We started with the foundation of digitizing paper processes and now offer what we believe to be the most comprehensive array of solutions, services, hardware, and devices to the health care industry. Since our company began, we have been committed to transformational change in the vital task of keeping people healthy. Now more than ever, our focus is on developing the innovations that will help improve the entire health care system. Ultimately, we believe health care is personal and nothing matters more than our health and our families. As a result, we believe health care is too important to stay the same, and we are focused on changing the way people:

Use and share information

• We empower providers to base decisions on the best clinical evidence.

• We coordinate care across traditionally fragmented health care systems.

• We provide clinical organizations with reliability, flexibility and continuous innovation available through cloud-based intelligence.

• We provide contextually relevant information to the right people at the right time.

Pay for health and care

• We believe IT investment must be matched with innovative payment models that are easier to navigate.

• We are replacing the current, claims-based system with streamlined electronic payments.

• We develop ways to reward people and their providers for proactively achieving positive health goals.

Think about health

• We empower people to actively engage in their health by providing them with a standards-based, lifetime personal health record.

• We are replacing the reactive “sick care” model with a proactive, personalized plan for health.

Our vision has always guided our large investments in research and development, which have created strong levels of organic growth throughout our history. Our proven ability to innovate has led to what we believe to be industry-leading solution and device architectures and an unmatched breadth and depth of solutions and services. We believe these strengths position us well to gain market share in the United States during a period of expected strong demand driven by the HITECH provisions of ARRA and the nation’s focus on improving the efficiency and quality of health care. We also have a strong global brand and a presence in more than 25 countries and believe we have a good opportunity to gain market share outside of the United States.

In addition to growth by gaining market share, we have a significant opportunity to grow revenues by expanding our solution footprint with existing clients. There is opportunity to expand penetration of our core solutions, such as EHRs and computerized physician order entry, and increase penetration of our broad range of complementary solutions that can be offered into our existing client base. Examples include women’s health, anesthesiology, imaging, clinical process optimization, critical care, medical devices, device connectivity, emergency department, revenue cycle and surgery.

We have also introduced services in recent years that are targeted at capturing a larger percent of our clients’ existing IT spending. These services leverage our proven operational capabilities and the success of our CernerWorks^SM managed services business, where we have demonstrated the ability to improve our clients’ service levels at a cost that is at or below amounts they were previously spending. One of these services is Cerner ITWorks^SM, a suite of solutions and services that improve the ability of hospital IT departments to meet their organization’s needs while also creating a closer alignment between Cerner and our clients. A second example is Cerner RevWorks^SM, which includes solutions and services to help health care organizations improve their revenue cycle functions.

We have made good progress over the past several years at reducing the total cost of ownership of our solutions, which

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expands our end market opportunities by allowing us to offer lower-cost, higher-value solutions and services to smaller community hospitals, critical access hospitals and physician practices. For example, our CommunityWorks^TM offering leverages a shared instance of the Cerner Millennium platform across multiple clients, which decreases the total cost of ownership for these clients.

We also expect to drive growth over the course of the next decade through initiatives outside the core HCIT market. For example, we offer clinic, pharmacy, wellness and third-party administrator services directly to employers. These offerings have been shaped by what we have learned from changes we have implemented at Cerner over the past six years. We have removed our third-party administrator and become self-administered, launched an on-site clinic and pharmacy, incorporated biometric measurements for our population, realigned the economic incentives for associates in our health plan, and implemented a data-driven wellness management program. These changes have had a significant impact on the health of our associates and have allowed us to do what all employers want to do - reduce health care costs. We believe incorporating this success into our employer services offerings positions us well in a substantial addressable market of over 8,000 U.S. employers with over 1,000 employees.

As discussed below, another opportunity for future growth, and a significant area of investment for Cerner, is leveraging the vast amounts of data being created as the health care industry is digitized and using this data to help providers manage the health of populations.

Population Health

Today's system of episodic, fee-for-service care is characterized by waiting until a condition advances to the point of definite illness and complications to initiate costly and less effective treatment. We believe information technology will play a key role in a revolution to promote and manage health by helping predict what will happen in the future and allowing for lower cost interventions that can prevent harmful, costly outcomes.

For health care providers, population health management means serving patients with more precision. It means preventing potentially avoidable complications by developing prescriptive personalized health plans and applying preventative care to keep more people in a state of health, delaying and possibly preventing or reversing the effects of chronic disease, and using acute care as the last resort.

While this approach is logical and desirable, our system of care is structured in a way that physicians and hospitals get paid when people experience illness, not when they remain healthy. This is beginning to change through the formation of organizations, often called Accountable Care Organizations, which reward health systems for keeping healthy people healthy and for delivering higher quality and lower cost care to a defined population. As the industry continues down this path of creating incentives for managing the health of populations, we believe there will be significant new opportunities for Cerner.

We are already providing solutions and services to many of our clients that are foundational elements for population health. Examples of these include data liquidity through our Cerner Network interoperability and health information exchange offerings, Lighthouse Enterprise Data Warehousing and Quality solutions, our patient portal platform and personal health record solutions that offer a range of device and provider connectivity options and wellness offerings.

Supporting these solutions is Healthe Intent, which is our cloud-based architectural platform for population health that is agnostic to the source EHR and is also able to capture research, evidence, and financial and operational data. Healthe Intent also supports Chart Search, which leverages knowledge of the clinical meanings of words located within the EHR as well as the context in which those words occur to create algorithms that identify and rank the most important information contextually. This capability allows the physician to efficiently search through a patient's health record and identify relevant information in a matter of seconds. Chart Search adoption has now hit a tipping point across our client base, with more than 50 percent of our U.S. client base utilizing the solution.

The Healthe Intent platform also provides the ability to apply sophisticated, statistical algorithms against contextual clinical activity to recommend clinical action. We have illustrated this with our sepsis agent, which can assist in detecting the conditions that indicate a patient may be developing sepsis, a potentially fatal condition in which the bloodstream is overwhelmed by bacteria. Clients that have implemented this agent as part of a comprehensive sepsis prevention process have experienced significant reductions in sepsis mortality rates, and the adoption in our client base increased significantly in the past year.

In 2012 we outlined our vision for how we will continue to advance our capabilities in population health, building on the Healthe Intent platform and other foundational solutions that are already in place. Fundamental to the design of this platform is an evolving operating system specifically designed to identify the person, predict where interventions will be effective,

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attribute the individual to accountable providers and guide them to take appropriate action. We believe these elements will be critical to our clients in an accountable care environment, as providers will need the ability to predict and prevent incidents such as readmissions and proactively monitor patients with chronic conditions so complications can be prevented.

Our name for the clinical programming language that will drive our operating system for population health is Synapse. Synapse is a purpose built, clinical programming language that creates agents within the Healthe Intent platform to trigger and coordinate health care programs across a population. Very much like the clinical definition of Synapse, the language supports the signaling of an event, then coordinates that action across the platform based on localized requirements. We think this is a fundamental differentiator as the level of sophistication to manage the health of a population ultimately requires both personalization to the individual and adapting to the local provider network. This must be much more than a set of workflow applications with independent configuration options. We believe the ability to create these sophisticated commands in a natural language familiar to clinicians will create an ecosystem of discovery and innovation beyond the four walls of Cerner.

We are also working closely with clients to advance our population health capabilities. We announced a partnership in 2012 with Advocate Health Care, a leader in population health management, which will help us advance our population health initiatives and position us for significant opportunities as we deploy these capabilities across our client base. Early progress from these efforts has included joint development of sophisticated predictive models, including a predictive agent for readmissions that demonstrated a more than 20 percent improvement in predictive power as compared to the majority of the existing evidence based models in use today.

Another initiative that we believe will demonstrate the power of coordinated population health management is our partnership with Nevada, Missouri, which was announced in July 2012. We are collaborating with the city to build a new model of health and care with a goal of significantly improving health status and outcomes in Nevada. In addition to deploying Cerner solutions at Nevada Regional Medical Center, the project is focused on creating a culture of health in the community through education, incentives, infrastructure and partnerships with stakeholders such as the Nevada school district, local employers and community organizations. In addition, all residents will have access to their health information regardless of where they are or which provider they see. We believe a project of this scope has never been done before. Our goal is to see how quickly we can impact the cost, accessibility and quality of health and care and to create a replicable and sustainable model for other communities.

In summary, we believe we are uniquely positioned to build on our existing investments and create the most comprehensive platform for facilitating population health. We expect this platform to create significant opportunities for Cerner as health care continues to evolve towards a model that incents keeping people healthy.

Software Development

We commit significant resources to developing new health information system solutions and services. As of the end of 2012, approximately 3,200 associates were engaged in research and development activities. Total expenditures for the development and enhancement of our software solutions were approximately $319.8 million, $290.6 million and $284.8 million during the 2012, 2011 and 2010 fiscal years, respectively. These figures include both capitalized and non-capitalized portions and exclude amounts amortized for financial reporting purposes.

As discussed above, continued investment in research and development remains a core element of our strategy. This will include ongoing enhancement of our core solutions and development of new solutions and services.

Sales and Marketing

The markets for Cerner HCIT solutions, health care devices and services include integrated delivery networks, physician groups and networks, managed care organizations, hospitals, medical centers, free-standing reference laboratories, home health agencies, blood banks, imaging centers, pharmacies, pharmaceutical manufacturers, employers, governments and public health organizations. The majority of our sales are sales of clinical solutions and services to hospital and health systems, but the Cerner Millennium architecture is highly scalable and organizations ranging from several physician practices, to community hospitals, to complex integrated delivery networks, to local, regional and national government agencies use our Cerner Millennium solutions and services.

As previously discussed, we have focused on reducing the total cost of ownership of our systems, which allows us to be price competitive across the full size and organizational structure range of health care providers. Sales to large health systems typically take approximately nine to 18 months, while the sales cycle is often shorter when selling to smaller hospitals and physician practices. In some instances, the HITECH provisions of ARRA have shortened the sales process due to the timeline required for hospitals to qualify for stimulus incentives.

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Our executive marketing management is located at our Innovation Campus in Kansas City, Missouri, while our client representatives are deployed across the United States and globally. In addition to the United States, through our subsidiaries, we have sales associates and/or offices giving us a presence in more than 25 countries.

We support our sales force with technical personnel who perform demonstrations of Cerner solutions and services and assist clients in determining the proper hardware and software configurations. Our primary direct marketing strategy is to generate sales contacts from our existing client base and through presentations at industry seminars and tradeshows. We market the PowerWorks^® solutions, offered on a subscription basis, directly to the physician practice market using telemarketing, channel partners and through existing acute care clients that are looking to extend Cerner solutions to affiliated physicians. We attend a number of major tradeshows each year and sponsor executive user conferences, which feature industry experts who address the HCIT needs of large health care organizations.

Client Services

Substantially all of Cerner’s HCIT software solutions clients enter into software support agreements with us for maintenance and support of their Cerner systems. In addition to immediate software support in the event of problems, these agreements allow clients to access new releases of the Cerner solutions covered by support agreements. Each client has 24-hour access to the client support team located at our world headquarters in North Kansas City, Missouri and our global support organizations in England and Ireland.

Most clients who buy hardware through Cerner also enter into hardware maintenance agreements with us. These arrangements normally provide for a fixed monthly fee for specified services. In the majority of cases, we utilize subcontractors to meet our hardware maintenance obligations. We also offer a set of managed services that include remote hosting, operational management services and disaster recovery.

Backlog

At the end of 2012, we had a contract backlog of $6.5 billion as compared to $5.4 billion at the end of 2011. Such backlog represents system sales and services from signed contracts that have not yet been recognized as revenue. At the end of 2012, we had $18.2 million of contracts receivable compared to $81.8 million at the end of 2011, which represents revenues recognized but not yet billable under the terms of the contract. At the end of 2012, we had a software support and maintenance backlog of $738.2 million as compared to $705.7 million at the end of 2011. Such backlog represents contracted software support and hardware maintenance services for a period of 12 months. We estimate that approximately 29 percent of the aggregate backlog at the end of 2012 of $7.3 billion will be recognized as revenue during 2013.

Competition

The market for HCIT solutions, devices and services is intensely competitive, rapidly evolving and subject to rapid technological change. Our principal competitors in the health care solutions and services market include, but are not limited to: Allscripts Healthcare Solutions, Inc., Computer Programs and Systems, Inc. (CPSI), Epic Systems Corporation (Epic), GE Healthcare Technologies (GE), Healthcare Management Systems, Inc. (HMS), Healthland, Inc., Computer Sciences Corporation (iSoft), Keane, Inc., McKesson Corporation (McKesson), Medical Information Technology, Inc. (Meditech), Siemens Medical Solutions Health Services Corporation (Siemens), and Quadramed Corporation (Quadramed), each of which offers a suite of software solutions that compete with many of our software solutions and services.

Other competitors focus on only a portion of the market that we address. For example, competitors, without limitation, such as Accenture plc, Affiliated Computer Services (ACS), Cap Gemini S. A., Computer Task Group, Inc. (CTGHS), Dell, Inc. (Dell), Deloitte Consulting LLP, Hewlett-Packard Company, IBM Corporation and Science Applicaitons International Corporation (formerly maxIT Healthcare LLC) offer HCIT services that compete directly with some of our service offerings. AmazingCharts.com, Inc., Athenahealth, Inc., eClinicalWorks LLC, e-MDs, Inc., Greenway Medical Technologies, MED3000, Inc., NexGen Healthcare, Inc., Quality Systems, Inc., Sevocity (a division of Conceptual MindWorks, Inc.) and Vitera Healthcare Solutions (formerly Sage Software Healthcare LLC) offer solutions to the physician practice market but do not currently have a significant presence in the health systems and independent hospital market.

Cerner partners with third parties as a reseller of devices and markets its own competing proprietary health care devices. We view our principal competitors in the health care device market to include, without limitation: API Healthcare, CapsuleTech, Inc., CareFusion Corporation, GE, iSirona, LLC, McKesson and Omnicell, Inc. We view our principal competitors in the health care revenue cycle transactions market to include, without limitation: Accretive Health, Inc., Allscripts, Dell, Emdeon Corporation, Epic, GE, McKesson, MedAssets, Inc., Meditech, Optum, Inc., Quadramed, Siemens, SSI Group, Inc. and 3M Company with almost all of these competitors being substantially larger or having more experience and market share than

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us in their respective markets.

In addition, we expect that major software information systems companies, large information technology consulting service providers and system integrators, start-up companies, managed care companies and others specializing in the health care industry may offer competitive software solutions, devices or services. The pace of change in the HCIT market is rapid and there are frequent new software solutions, devices or services introductions, enhancements and evolving industry standards and requirements. We believe that the principal competitive factors in this market include the breadth and quality of solution and service offerings, the stability of the solution provider, the features and capabilities of the information systems and devices, the ongoing support for the systems and devices and the potential for enhancements and future compatible software solutions and devices.

Number of Employees (Associates)

At the end of 2012, we employed approximately 11,900 associates worldwide.

Operating Segments

Information about our operating segments, which are geographically based, may be found in Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” below and in Note (18) to the consolidated financial statements.

Executive Officers of the Registrant

The following table sets forth the names, ages, positions and certain other information regarding the Company’s executive officers as of February 1, 2013. Officers are elected annually and serve at the discretion of the Board of Directors.

Name	Age	Positions
Neal L. Patterson	63	Chairman of the Board of Directors, Chief Executive Officer and President
Clifford W. Illig	62	Vice Chairman of the Board of Directors
Marc G. Naughton	57	Executive Vice President and Chief Financial Officer
Michael R. Nill	48	Executive Vice President and Chief Operating Officer
Randy D. Sims	52	Senior Vice President, Chief Legal Officer and Secretary
Jeffrey A. Townsend	49	Executive Vice President and Chief of Staff
Julia M. Wilson	50	Senior Vice President and Chief People Officer
Zane M. Burke	47	Executive Vice President - Client Organization

Neal L. Patterson, co-founder of the Company, has been Chairman of the Board of Directors and Chief Executive Officer of the Company for more than five years. Mr. Patterson has served as President of the Company since July 2010, which position he also held from March of 1999 until August of 1999.

Clifford W. Illig, co-founder of the Company, has been a Director of the Company for more than five years. He previously served as Chief Operating Officer of the Company until October 1998 and as President of the Company until March of 1999. Mr. Illig was appointed Vice Chairman of the Board of Directors in March of 1999.

Marc G. Naughton joined the Company in November 1992 as Manager of Taxes. In November 1995 he was named Chief Financial Officer and in February 1996 he was promoted to Vice President. He was promoted to Senior Vice President in March 2002 and promoted to Executive Vice President in March 2010.

Michael R. Nill joined the Company in November 1996. Since that time he has held several positions in the Technology, Intellectual Property and CernerWorks Client Hosting Organizations. He was promoted to Vice President in January 2000, promoted to Senior Vice President in April 2006 and promoted to Executive Vice President and named Chief Engineering Officer in February 2009. Mr. Nill was appointed Chief Operating Officer in May 2011.

Randy D. Sims joined the Company in March 1997 as Vice President and Chief Legal Officer and was promoted to Senior Vice President in March 2011. Prior to joining the Company, Mr. Sims worked at Farmland Industries, Inc. for three years where he last served as Associate General Counsel. Prior to Farmland, Mr. Sims was in-house legal counsel at The Marley Company for seven years, holding the position of Assistant General Counsel when he left to join Farmland.

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Jeffrey A. Townsend joined the Company in June 1985. Since that time he has held several positions in the Intellectual Property Organization and was promoted to Vice President in February 1997. He was appointed Chief Engineering Officer in March 1998, promoted to Senior Vice President in March 2001, named Chief of Staff in July 2003 and promoted to Executive Vice President in March 2005.

Julia M. Wilson joined the Company in November 1995. Since that time, she has held several positions in the Functional Group Organization. She was promoted to Vice President and Chief People Officer in August 2003 and to Senior Vice President in March 2007.

Zane M. Burke joined the Company in September 1996. Since that time, he has held a variety of client-facing sales, implementation and support roles, including Corporate Controller and Vice President of Finance. He was promoted to President of the Company’s West region in 2002 and Senior Vice President of National Alignment in 2006. He was further promoted to Executive Vice President - Client Organization in July 2011.

Item 1A. Risk Factors

Risks Related to our Business

We may incur substantial costs related to product-related liabilities. Many of our software solutions, health care devices or services (including life sciences/research services) are intended for use in collecting, storing and displaying clinical and health care-related information used in the diagnosis and treatment of patients and in related health care settings such as admissions, billing, etc. We attempt to limit by contract our liability; however, the limitations of liability set forth in the contracts may not be enforceable or may not otherwise protect us from liability for damages. We may also be subject to claims that are not covered by contract, such as a claim directly by a patient. Although we maintain liability insurance coverage in an amount that we believe is sufficient for our business, there can be no assurance that such coverage will cover any particular claim that has been brought or that may be brought in the future, that such coverage will prove to be adequate or that such coverage will continue to remain available on acceptable terms, if at all. A successful material claim or series of claims brought against us, if uninsured or under-insured, could materially harm our business, results of operations and financial condition. Product-related claims, even if not successful, could damage our reputation, cause us to lose existing clients, limit our ability to obtain new clients, divert management’s attention from operations, result in significant revenue loss, create potential liabilities for our clients and us and increase insurance and other operational costs.

We may be subject to claims for system errors and warranties. Our software solutions and health care devices are very complex and may contain design, coding or other errors, especially when first introduced. It is not uncommon for HCIT providers to discover errors in software solutions and/or health care devices after their introduction to the market. Our software solutions and health care devices are intended for use in collecting, storing, and displaying clinical and health care-related information used in the diagnosis and treatment of patients and in related health care settings such as admissions, billing, etc. Therefore, users of our software solutions and health care devices have a greater sensitivity to errors than the market for software products and devices generally. Our client agreements typically provide warranties concerning material errors and other matters. Should a client’s Cerner software solution or health care device fail to meet these warranties or lead to faulty clinical decisions or injury to patients, it could 1) constitute a material breach under the client agreement, allowing the client to terminate the agreement and possibly obtain a refund or damages or both, or require us to incur additional expense in order to make the software solution or health care device meet these criteria or 2) subject us to claims or litigation by our clients or clinicians or directly by the patient. Additionally, such failures could damage our reputation and could negatively affect future sales. Our client agreements generally limit our liability arising from such claims but such limits may not be enforceable in certain jurisdictions or circumstances. Although we maintain liability insurance coverage in an amount that we believe is sufficient for our business, there can be no assurance that such coverage will cover any particular claim that has been brought or that may be brought in the future, that such coverage will prove to be adequate or that such coverage will continue to remain available on acceptable terms, if at all. A successful material claim or series of claims brought against us, if uninsured or under-insured, could materially harm our business, results of operations and financial condition.

We may experience interruption at our data centers or client support facilities. We perform data center and/or hosting services for certain clients, including the storage of critical patient and administrative data. In addition, we provide support services to our clients through various client support facilities. We have invested in reliability features such as multiple power feeds, multiple backup generators and redundant telecommunications lines, as well as technical (such as multiple overlapping security applications, access control and other countermeasures) and physical security safeguards, and structured our operations to reduce the likelihood of disruptions. Periodic risk assessments are conducted to ensure additional risks are

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identified and appropriately mitigated. However, complete failure of all local public power and backup generators, impairment of all telecommunications lines, a concerted denial of service cyber-attack, a significant data breach, damage, injury or impairment (environmental, accidental, intentional or pandemic) to the buildings, the equipment inside the buildings housing our data centers, the personnel operating such facilities or the client data contained therein, or errors by the personnel trained to operate such facilities could cause a disruption in operations and negatively impact clients who depend on us for data center and system support services. We offer our clients disaster recovery services for additional fees to protect clients from isolated data center failures, leveraging our multiple data center facilities, however only a small percentage of our hosted clients choose to contract for these services. Any interruption in operations at our data centers and/or client support facilities could damage our reputation, cause us to lose existing clients, hurt our ability to obtain new clients, result in significant revenue loss, create potential liabilities for our clients and us and increase insurance and other operating costs.

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. We rely upon a combination of license agreements, confidentiality policies and procedures, employee nondisclosure agreements, confidentiality agreements with third parties and technical security measures to maintain the confidentiality, exclusivity and trade secrecy of our proprietary information. We also rely on trademark and copyright laws to protect our intellectual property rights in the United States and abroad. We continue to develop our patent portfolio of United States and global patents, but these patents do not provide comprehensive protection for the wide range of solutions, devices and services we offer. Despite our protective measures and intellectual property rights, we may not be able to adequately protect against theft, copying, reverse-engineering, misappropriation, infringement or unauthorized use or disclosure of our intellectual property, which could have an adverse effect on our competitive position.

In addition, we are routinely involved in intellectual property infringement or misappropriation claims and we expect this activity to continue or even increase as the number of competitors, patents and patent enforcement organizations in the HCIT market increases, the functionality of our software solutions and services expands, the use of open-source software increases and we enter new geographies and new markets such as health care device innovation, health care transactions, population health management and life sciences. These claims, even if not meritorious, are expensive to defend and are often incapable of prompt resolution. If we become liable to third parties for infringing or misappropriating their intellectual property rights, we could be required to pay a substantial damage award, develop alternative technology, obtain a license or cease using, selling, offering for sale, licensing, importing, implementing or supporting the solutions, devices and services that violate the intellectual property rights.

We may become subject to legal proceedings that could have a material adverse impact on our financial position and results of operations. From time to time and in the ordinary course of our business, we and certain of our subsidiaries may become involved in various legal proceedings. All such legal proceedings are inherently unpredictable and, regardless of the merits of the claims, litigation may be expensive, time-consuming, disruptive to our operations and distracting to management. If resolved against us, such legal proceedings could result in excessive verdicts, injunctive or other equitable relief that may affect how we operate our business, or settlements of claims for monetary damages. Future court decisions, business expansion or legislative activity may increase our exposure to litigation and regulatory investigations. In some cases, substantial non-economic remedies or punitive damages may be sought.

We are subject to risks associated with our non-U.S. operations. We market, sell and service our solutions, devices and services globally. We have established offices around the world, including in the Americas, Europe, the Middle East and the Asia Pacific region. We will continue to expand our non-U.S. operations and enter new global markets. This expansion will require significant management attention and financial resources to develop successful direct and indirect non-U.S. sales and support channels. Our business is generally transacted in the local functional currency. In some countries, our success will depend in part on our ability to form relationships with local partners. There is a risk that we may sometimes choose the wrong partner. For these and other reasons, we may not be able to maintain or increase non-U.S. market demand for our solutions, devices and services.

Non-U.S. operations are subject to inherent risks, and our future results could be adversely affected by a variety of uncontrollable and changing factors. These include, but are not limited to:

• Greater difficulty in collecting accounts receivable and longer collection periods

• Difficulties and costs of staffing and managing non-U.S. operations

• The impact of global economic conditions

• Effects of sovereign debt conditions, including budgetary constraints

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• Unfavorable or volatile foreign currency exchange rates

• Legal compliance costs or business risks associated with our global operations where: i) local laws and customs differ from those in the United States, or ii) risk is heightened with respect to laws prohibiting improper payments and bribery, including without limitation the U.S. Foreign Corrupt Practices Act, the U.K. Anti-Bribery Act and similar laws and regulations in foreign jurisdictions

• Certification, licensing or regulatory requirements

• Unexpected changes in regulatory requirements

• Changes to or reduced protection of intellectual property rights in some countries

• Potentially adverse tax consequences and difficulties associated with repatriating cash generated or held abroad in a tax-efficient manner

• Different or additional functionality requirements or preferences

• Trade protection measures

• Export control regulations

• Health service provider or government spending patterns

• Natural disasters, war or terrorist acts

• Labor disruptions that may occur in a country

• Poor selection of a partner in a country

• Political conditions which may impact sales or threaten the safety of associates or our continued presence in these countries

Our failure to effectively hedge exposure to fluctuations in foreign currency exchange rates could unfavorably affect our performance. We currently utilize a non-derivative instrument to hedge our exposure to fluctuations in certain foreign currency exchange rates. This instrument may involve elements of market risk in excess of the amounts recognized in the Consolidated Financial Statements. For additional information about market risk on financial instruments, see Item 7A “Quantitative and Qualitative Disclosures about Market Risk”. Further, our financial results from non-U.S. operations may be negatively affected if we fail to execute or if we improperly hedge our exposure to currency fluctuations.

We are subject to tax legislation in numerous countries; tax legislation initiatives or challenges to our tax positions could adversely affect our results of operations and financial condition. We are a global corporation with a presence in more than 25 countries. As such, we are, or in the future could be, subject to tax laws, regulations and policies of the United States federal, state and local governments and of other country jurisdictions. From time to time, various legislative initiatives may be proposed that could adversely affect our tax positions and/or our tax liabilities. There can be no assurance that our effective tax rate or tax payments will not be adversely affected by these initiatives. In addition, United States federal, state and local, as well as other countries’ tax laws and regulations, are extremely complex and subject to varying interpretations. There can be no assurance that our tax positions will not be challenged by relevant tax authorities or that we would be successful in any such challenge, which could result in double taxation, penalties and interest payments.

Our success depends upon the recruitment and retention of key personnel. To remain competitive in our industries, we must attract, motivate and retain highly skilled managerial, sales, marketing, consulting and technical personnel, including executives, consultants, programmers and systems architects skilled in the HCIT, health care devices, health care transactions, population health management and life sciences industries and the technical environments in which our solutions, devices and services are needed. Competition for such personnel in our industries is intense in both the United States and abroad. Our failure to attract additional qualified personnel to meet our needs could have a material adverse effect on our prospects for long-term growth. In addition, we invest significant time and expense in training our employees, which increases their value to clients and competitors who may seek to recruit them and increases the cost of replacing them. Our success is dependent to a significant degree on the continued contributions of key management, sales, marketing, consulting and technical personnel. The unexpected loss of key personnel could have a material adverse impact on our business and results of operations, and could potentially inhibit development and delivery of our solutions, devices and services and market share advances.

We depend on third party suppliers and our revenue and operating earnings could suffer if we fail to manage suppliers properly. We license or purchase intellectual property and technology (such as software, hardware and content) from third parties, including some competitors, and incorporate such third party software, hardware or content into or sell or license it in conjunction with our solutions, devices and services. We depend on some of the third party software, hardware or content in the operation and delivery of our solutions, devices and services. For instance, we currently depend on Microsoft and IBM

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technologies for portions of the operational capabilities of our Millennium solutions. Our remote hosting business also relies on a single or a limited number of suppliers for certain functions of this business, such as Oracle database technologies, CITRIX technologies and Cisco networking technologies. Additionally, we rely on Hewlett Packard and IBM for our hardware technology platforms.

Most of the third party software licenses we have expire within one to five years, can be renewed only by mutual consent and may be terminated if we breach the terms of the license and fail to cure the breach within a specified period of time. Most of these third party software licenses are non-exclusive; therefore, our competitors may obtain the right to use any of the technology covered by these licenses and use the technology to compete directly with us.

If any of the third party suppliers were to change product offerings, cease actively supporting the technologies, fail to update and enhance the technologies to keep pace with changing industry standards, encounter technical difficulties in the continuing development of these technologies, significantly increase prices, terminate our licenses or supply contracts, suffer significant capacity constraints or suffer significant disruptions, we would need to seek alternative suppliers and incur additional internal or external development costs to ensure continued performance of our solutions, devices and services. Such alternatives may not be available on attractive terms, or may not be as widely accepted or as effective as the intellectual property or technology provided by our existing suppliers. If the cost of licensing, purchasing or maintaining the third party intellectual property or technology significantly increases, our operating earnings could significantly decrease. In addition, interruption in functionality of our solutions, devices or services as a result of changes in third party suppliers could adversely affect our commitments to customers, future sales of solutions, devices and services, and negatively affect our revenue and operating earnings.

We intend to continue strategic business acquisitions, which are subject to inherent risks. In order to expand our solutions, device offerings and services and grow our market and client base, we may continue to seek and complete strategic business acquisitions that we believe are complementary to our business. Acquisitions have inherent risks which may have a material adverse effect on our business, financial condition, operating results or prospects, including, but not limited to: 1) failure to successfully integrate the business and financial operations, services, intellectual property, solutions or personnel of an acquired business and to maintain uniform standard controls, policies and procedures; 2) diversion of management’s attention from other business concerns; 3) entry into markets in which we have little or no direct prior experience; 4) failure to achieve projected synergies and performance targets; 5) loss of clients or key personnel; 6) incurrence of debt or assumption of known and unknown liabilities; 7) write-off of software development costs, goodwill, client lists and amortization of expenses related to intangible assets; 8) dilutive issuances of equity securities; and, 9) accounting deficiencies that could arise in connection with, or as a result of, the acquisition of an acquired company, including issues related to internal control over financial reporting and the time and cost associated with remedying such deficiencies. If we fail to successfully integrate acquired businesses or fail to implement our business strategies with respect to these acquisitions, we may not be able to achieve projected results or support the amount of consideration paid for such acquired businesses.

We could suffer losses due to asset impairment charges. We assess our goodwill for impairment during the second quarter every year and on an interim date should events or changes in circumstances indicate the carrying value of goodwill may not be recoverable in accordance with provisions of Accounting Standards Codification Topic 350, Intangibles – Goodwill and Other. Declines in business performance or other factors could cause the fair value of a reporting unit to be revised downward and could result in a non-cash impairment charge. This could materially affect our reported net earnings.

The ongoing uncertainty in global economic conditions could negatively affect our business, results of operations and financial condition. Although certain indices and economic data have shown signs of stabilization in the United States and certain global markets, there can be no assurance that these improvements will be broad-based or sustainable, nor is it clear how, if at all, they will affect the markets relevant to us. As a result, our operating results may be impacted by the health of the global economy. Continued adverse economic conditions may lead to slowdowns or declines in client spending which could adversely affect our business and financial performance. Our business and financial performance, including new business bookings and collection of our accounts receivable, may be adversely affected by current and future economic conditions (including a reduction in the availability of credit, higher energy costs, rising interest rates, financial market volatility and lower than expected economic growth) that cause a slowdown or decline in client spending. Reduced purchases by our clients or changes in payment terms could adversely affect our revenue growth and cause a decrease in our cash flow from operations. Bankruptcies or similar events affecting clients may cause us to incur bad debt expense at levels higher than historically experienced. Further, an ongoing global financial crisis may also limit our ability to access the capital markets at a time when we would like, or need, to raise capital, which could have an impact on our ability to react to changing economic and business conditions. Accordingly, if the global financial crisis and current economic downturn continues or worsens, our business, results of operations and financial condition could be materially and adversely affected.

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If we are unable to manage our growth in the new markets in which we offer solutions, health care devices or services, our business and financial results could suffer. Our future financial results will depend in part on our ability to profitability manage our business in the new markets that we enter. Over the past several years, we have engaged in the identification of, and competition for, growth and expansion opportunities in the areas of analytics, revenue cycle and population health. In order to achieve those initiatives, we will need to, among other things, recruit, train, retain and effectively manage associates, manage changing business conditions and implement and improve our technical, administrative, financial control and reporting systems for offerings in those areas. Difficulties in managing future growth in new markets could have a significant negative impact on our business, financial condition and results of operations.

Risks Related to the Health Care Information Technology, Health Care Device, Health Care Transaction and Population Health Management Industry

The health care industry is subject to changing political, economic and regulatory influences. For example, the Health Insurance Portability and Accountability Act of 1996 (as modified by The Health Information Technology for Economic and Clinical Health Act (HITECH) provisions of the American Recovery and Reinvestment Act of 2009) (collectively, HIPAA) continues to have a direct impact on the health care industry by requiring national provider identifiers and standardized transactions/code sets and necessary security and privacy measures in order to ensure the appropriate level of privacy of protected health information. These regulatory factors affect the purchasing practices and operation of health care organizations.

Many health care providers are consolidating to create integrated health care delivery systems with greater market power. These providers may try to use their market power to negotiate price reductions for our solutions, health care devices and services. As the health care industry consolidates, our client base could be eroded, competition for clients could become more intense and the importance of landing new client relationships becomes greater.

The Patient Protection and Affordable Care Act, which was amended by the Health Care and Education Reconciliation Act of 2010, became law in 2010. This comprehensive health care reform legislation included provisions to control health care costs, improve health care quality, and expand access to affordable health insurance. This health care reform legislation could include changes in Medicare and Medicaid payment policies and other health care delivery administrative reforms that could potentially negatively impact our business and the business of our clients. Because the administrative rules implementing health care reform under the legislation have not yet been finalized, the impact of the health care reform legislation on our business is unknown, but there can be no assurances that health care reform legislation will not adversely impact either our operational results or the manner in which we operate our business. Health care industry participants may respond by reducing their investments or postponing investment decisions, including investments in our solutions and services.

The health care industry is highly regulated at the local, state and federal level. The impact of these regulations on us is direct, to the extent that we are ourselves subject to these laws and regulations, and is also indirect because, in a number of situations, even though we may not be directly regulated by specific health care laws and regulations, our solutions, devices and services must be capable of being used by our clients in a way that complies with those laws and regulations. There is a significant and wide-ranging number of regulations both within the United States and abroad, such as regulations in the areas of health care fraud, e-prescribing, claims processing and transmission, medical devices, the security and privacy of patient data and interoperability standards, that may be directly or indirectly applicable to our operations and relationships or the business practices of our clients. Specific risks include, but are not limited to, the following:

Health Care Fraud. Federal and state governments continue to enhance regulation of and increase their scrutiny over practices involving health care fraud affecting health care providers whose services are reimbursed by Medicare, Medicaid and other government health care programs. Our health care provider clients are subject to laws and regulations on fraud and abuse which, among other things, prohibit the direct or indirect payment or receipt of any remuneration for patient referrals, or arranging for or recommending referrals or other business paid for in whole or in part by these federal or state health care programs. Federal enforcement personnel have substantial funding, powers and remedies to pursue suspected or perceived fraud and abuse. The effect of this government regulation on our clients is difficult to predict. Many of the regulations applicable to our clients and that may be applicable to us, including those relating to marketing incentives offered in connection with medical device sales, are vague or indefinite and have not been interpreted by the courts. They may be interpreted or applied by a prosecutorial, regulatory or judicial authority in a manner that could broaden their applicability to us or require our clients to make changes in their operations or the way in which they deal with us. If such laws and regulations are determined to be applicable to us and if we fail to comply with any applicable laws and regulations, we could be subject to civil and criminal penalties, sanctions or other liability, including exclusion from government health programs, which could have a material

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adverse effect on our business, results of operations and financial condition. Even an unsuccessful challenge by a regulatory or prosecutorial authority of our activities could result in adverse publicity, could require a costly response from us and could adversely affect our business, financial condition and results of operations.

E-Prescribing. The use of our solutions by physicians for electronic prescribing, electronic routing of prescriptions to pharmacies and dispensing is governed by federal and state laws. States have differing regulations that govern the electronic transmission of certain prescription orders and prescription format requirements. The Centers for Medicare and Medicaid Services' (CMS) regulations related to “E-Prescribing and the Prescription Drug Program” set forth standards for the transmission of electronic prescriptions. These standards are detailed and significant, and cover not only transactions between prescribers and dispensers for prescriptions but also electronic eligibility, benefits inquiries, drug formulary and benefit coverage information. In general, regulations in this area impose certain requirements which can be burdensome and evolve regularly, meaning that any potential benefits may be reversed by a newly-promulgated regulation that adversely affects our business model. Our efforts to provide solutions that enable our clients to comply with these regulations could be time-consuming and expensive.

Preparation, Transmission and Submission of Medical Claims for Reimbursement. Our solutions are capable of electronically transmitting claims for services and items rendered by a physician to many patients' payers for approval and reimbursement. We also provide services to our clients that include the coding, preparation and submission of claims for medical service to payers for reimbursement. Such claims are governed by federal and state laws. Federal law provides civil liability to any person that knowingly submits a claim to a payer, including Medicare, Medicaid and private health plans, seeking payment for any services or items that have not been provided to the patient. Federal law may also impose criminal penalties for intentionally submitting such false claims. We have policies and procedures in place that we believe result in the accurate and complete preparation, transmission and submission of claims, provided that the information given to us by our clients is also accurate and complete. The HIPAA security, privacy and transaction standards, as discussed below, also have a potentially significant effect on our claims preparation, transmission and submission services, since those services must be structured and provided in a way that supports our clients' HIPAA compliance obligations. In connection with these laws, we may be subjected to federal or state government investigations and possible penalties may be imposed upon us; false claims actions may have to be defended; private payers may file claims against us; and, we may be excluded from Medicare, Medicaid or other government-funded health care programs. Any investigation or proceeding related to these laws, even if unwarranted or without merit, may have a material adverse effect on our business, results of operations and financial condition.

Regulation of Medical Devices. The United States Food and Drug Administration (the FDA) has determined that certain of our solutions are medical devices that are actively regulated under the Federal Food, Drug and Cosmetic Act (Act) and amendments to the Act. Other countries have similar regulations in place related to medical devices, that now or may in the future apply to certain of our solutions. If other of our solutions are deemed to be actively regulated medical devices by the FDA or similar regulatory agencies in countries where we do business, we could be subject to extensive requirements governing pre- and post-marketing activities including pre-market notification clearance. Complying with these medical device regulations on a global perspective is time consuming and expensive, and could be subject to unanticipated and significant delays. Further, it is possible that these regulatory agencies may become more active in regulating software and medical devices that are used in health care. If we are unable to obtain the required regulatory approvals for any such solutions or medical devices, our short to long term business plans for these solutions or medical devices could be delayed or canceled.

There have been six FDA inspections at various Cerner sites since 2003. Inspections conducted at our world headquarters and Innovations Campus in 2010 resulted in the issuance of an FDA Form 483 observation to which we responded promptly. The FDA has taken no further action with respect to the Form 483 observation that was issued in 2010. The remaining FDA inspections, including inspections at our world headquarters in 2006 and 2007, resulted in no issuance of a Form 483. We remain subject to periodic FDA inspections and we could be required to undertake additional actions to comply with the Act and any other applicable regulatory requirements. Our failure to comply with the Act and any other applicable regulatory requirements could have a material adverse effect on our ability to continue to manufacture, distribute and deliver our solutions, services and devices. The FDA has many enforcement tools including recalls, product corrections, seizures, injunctions, refusal to grant pre-market clearance of products, civil fines and criminal prosecutions. Any of the foregoing could have a material adverse effect on our business, results of operations and financial condition.

Security and Privacy of Patient Information. Federal, state, local and foreign laws regulate the confidentiality of patient records and the circumstances under which those records may be released. These regulations govern both the disclosure and use of confidential patient medical record information and require the users of such information to implement specified security and privacy measures. United States regulations currently in place governing electronic health data transmissions continue to evolve and are often unclear and difficult to apply. Laws in non-U.S. jurisdictions may have similar or even stricter

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requirements related to the treatment of patient information.

In the United States, HIPAA regulations require national standards for some types of electronic health information transactions and the data elements used in those transactions, security standards to ensure the integrity and confidentiality of health information and standards to protect the privacy of individually identifiable health information. Covered entities under HIPAA, which include health care organizations such as our clients, our employer clinic business model and our claims processing, transmission and submission services, are required to comply with the privacy standards, the transaction regulations and the security regulations. Moreover, the HITECH provisions of ARRA, and associated regulatory requirements, extend many of the HIPAA obligations, formerly imposed only upon covered entities, to business associates as well. As a business associate of our clients who are covered entities, we were in most instances already contractually required to ensure compliance with the HIPAA regulations as they pertain to handling of covered client data. However, the extension of these HIPAA obligations to business associates by law has created additional liability risks related to the privacy and security of individually identifiable health information.

Evolving HIPAA and HITECH-related laws or regulations in the U.S. and data privacy and security laws or regulations in non-U.S. jurisdictions could restrict the ability of our clients to obtain, use or disseminate patient information. This could adversely affect demand for our solutions if they are not re-designed in a timely manner in order to meet the requirements of any new interpretations or regulations that seek to protect the privacy and security of patient data or enable our clients to execute new or modified health care transactions. We may need to expend additional capital, software development and other resources to modify our solutions and devices to address these evolving data security and privacy issues. Furthermore, our failure to maintain confidentiality of sensitive personal information in accordance with the applicable regulatory requirements could damage our reputation and expose us to breach of contract claims (although we contractually limit liability, when possible and where permitted), fines and penalties.

Federal and state statutes and regulations have granted broad enforcement powers to regulatory agencies to investigate and enforce our compliance with these privacy and security laws and regulations. Federal and state enforcement personnel have substantial funding, powers and remedies to purse suspected or perceived violations. If we fail to comply with any applicable laws or regulations, we could be subject to civil penalties, sanctions or other liability. Enforcement investigations, even if meritless, could have a negative impact on our reputation, cause us to lose existing clients or limit our ability to attract new clients.

Interoperability Standards. Our clients are concerned with and often require that our software solutions and health care devices be interoperable with other third party HCIT suppliers. Market forces or governmental/regulatory authorities could create software interoperability standards that would apply to our solutions, health care devices or solutions, and if our software solutions, health care devices or services are not consistent with those standards, we could be forced to incur substantial additional development costs to conform. The Certification Commission for Healthcare Information Technology (CCHIT) has developed a comprehensive set of criteria for the functionality, interoperability and security of various software modules in the HCIT industry. CCHIT, however, continues to modify and refine those standards. Achieving CCHIT certification is becoming a competitive requirement, resulting in increased software development and administrative expense to conform to these requirements.

ARRA Meaningful Use Program. Various federal, state and non-U.S. government agencies are also developing standards that could become mandatory for systems purchased by these agencies. For example, ARRA requires “meaningful use of certified electronic health record technology” by health care providers in order to receive incentive payments. Regulations have been issued that identify standards and implementation specifications and establish the certification standards for qualifying electronic health record technology. Nevertheless, these standards and specifications are subject to interpretation by the entities designated to certify such technology. While a combination of our solutions have been certified as meeting the initial standards for certified health record technology, the regulatory standards to achieve certification will continue to evolve over time. We may incur increased development costs and delays in delivering solutions if we need to upgrade our software, devices or health care devices to be in compliance with these varying and evolving standards. In addition, delays in interpreting these standards may result in postponement or cancellation of our clients’ decisions to purchase our solutions or health care devices. If our software solutions, devices or health care devices are not compliant with these evolving standards, our market position and sales could be impaired and we may have to invest significantly in changes to our software solutions, devices or health care devices, although we do not expect such costs to be significant in relation to the overall development costs for our solutions, devices and health care devices.

We operate in intensely competitive and dynamic industries, and our ability to successfully compete and continue to grow our business depends on our ability to respond quickly to market changes and changing technologies and

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to bring competitive new solutions, devices, features and services to market in a timely fashion. The market for health care information systems, health care devices and services to the health care industry is intensely competitive, dynamically evolving and subject to rapid technological and innovative changes. Development of new proprietary technology or services is complex, entails significant time and expense and may not be successful. We cannot guarantee that we will be able to introduce new solutions, devices or services on schedule, or at all, nor can we guarantee that such solutions, devices or services will achieve market acceptance. Moreover, we cannot guarantee that errors will not be found in our new solution releases, devices or services before or after commercial release, which could result in solution, device or service delivery redevelopment costs, harm to our reputation, lost sales, license terminations or renegotiations, product liability claims, diversion of resources to remedy errors and loss of, or delay in, market acceptance.

Certain of our competitors have greater financial, technical, product development, marketing or other resources than us and some of our competitors offer software solutions, devices or services that we do not offer. Our principal existing competitors are set forth above under Part I, Item 1 Competition.

In addition, we expect that major software information systems companies, large information technology consulting service providers and system integrators, start-up companies and others specializing in the health care industry may offer competitive software solutions, devices or services. As we continue to develop new health care devices and services to address areas such as analytics, transaction services, HCIT and device integration, and population health management, we expect to face new competitors, and these competitors may have more experience in these markets and/or more established relationships with prospective clients. We face strong competition and often face downward price pressure, which could adversely affect our results of operations or liquidity. Additionally, the pace of change in the health care information systems market is rapid and there are frequent new software solution introductions, software solution enhancements, device introductions, device enhancements and evolving industry standards and requirements. There are a limited number of hospitals and other health care providers in the United States market and in recent years, the health care industry has been subject to increasing consolidation. As the industry consolidates, costs fall, technology improves, and market factors continue to compel investment by health care organizations in solutions and services like ours, market saturation in the United States may change the competitive landscape in favor of larger, more diversified competitors with greater scale. If we are unable to recognize these changes in a timely manner, or we are too inflexible to rapidly adjust our business models, our growth ambitions and financial results could be negatively affected materially.

Risks Related to Our Common Stock

Our quarterly operating results may vary, which could adversely affect our stock price. Our quarterly operating results have varied in the past and may continue to vary in future periods, including variations from guidance, expectations or historical results or trends. Quarterly operating results may vary for a number of reasons including demand for our solutions, devices and services, the financial condition of our current and potential clients, our long sales cycle, potentially long installation and implementation cycles for larger, more complex systems, accounting policy changes and other factors described in this section and elsewhere in this report. As a result of health care industry trends and the market for our solutions, a large percentage of our revenues are generated by the sale and installation of larger, more complex and higher-priced systems. The sales process for these systems is lengthy and involves a significant technical evaluation and commitment of capital and other resources by the client. Sales may be subject to delays due to changes in clients’ internal budgets, procedures for approving large capital expenditures, competing needs for other capital expenditures, additions or amendments to federal, state or local regulations, availability of personnel resources or by actions taken by competitors. Delays in the expected sale, installation or implementation of these large systems may have a significant negative impact on our anticipated quarterly revenues and consequently our earnings, since a significant percentage of our expenses are relatively fixed.

Revenue recognized in any quarter may depend upon our or our clients’ abilities to meet project milestones. Delays in meeting these milestone conditions or modification of the project plan could result in a shift of revenue recognition from one quarter to another and could have a material adverse effect on results of operations for a particular quarter.

Our revenues from system sales historically have been lower in the first quarter of the year and greater in the fourth quarter of the year, primarily as a result of clients’ year-end efforts to make final capital expenditures for the then-current year.

Our sales forecasts may vary from actual sales in a particular quarter. We use a “pipeline” system, a common industry practice, to forecast sales and trends in our business. Our sales associates monitor the status of all sales opportunities, such as the date when they estimate that a client will make a purchase decision and the potential dollar amount of the sale. These estimates are aggregated periodically to generate a sales pipeline. We compare this pipeline at various points in time to evaluate trends in our business. This analysis provides guidance in business planning and forecasting, but these pipeline

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estimates are by their nature speculative. Our pipeline estimates are not necessarily reliable predictors of revenues in a particular quarter or over a longer period of time, partially because of changes in the pipeline and in conversion rates of the pipeline into contracts that can be very difficult to estimate. A negative variation in the expected conversion rate or timing of the pipeline into contracts, or in the pipeline itself, could cause our plan or forecast to be inaccurate and thereby adversely affect business results. For example, a slowdown in information technology spending, adverse economic conditions, new federal, state or local regulations related to our industry or a variety of other factors can cause purchasing decisions to be delayed, reduced in amount or cancelled, which would reduce the overall pipeline conversion rate in a particular period of time. Because a substantial portion of our contracts are completed in the latter part of a quarter, we may not be able to adjust our cost structure quickly enough in response to a revenue shortfall resulting from a decrease in our pipeline conversion rate in any given fiscal quarter.

The trading price of our common stock may be volatile. The market for our common stock may experience significant price and volume fluctuations in response to a number of factors including actual or anticipated variations in operating results, articles or rumors about our performance or solutions, devices or services, announcements of technological innovations or new services or products by our competitors or us, changes in expectations of future financial performance or estimates of securities analysts, governmental regulatory action, health care reform measures, client relationship developments, economic conditions and changes occurring in the securities markets in general and other factors, many of which are beyond our control. For instance, our quarterly operating results have varied in the past and may continue to vary in future periods, due to a number of reasons including, but not limited to, demand for our solutions, devices and services, the financial condition of our current and potential clients, our long sales cycle, potentially long installation and implementation cycles for larger, more complex and higher-priced systems, accounting policy changes and other factors described herein. As a matter of policy, we do not generally comment on our stock price or rumors.

Furthermore, the stock market in general, and the markets for software, health care devices, other health care solutions and services and information technology companies in particular, have experienced extreme volatility that often has been unrelated to the operating performance of particular companies. These broad market and industry fluctuations may adversely affect the trading price of our common stock, regardless of actual operating performance.

Our Directors have authority to issue preferred stock and our corporate governance documents contain anti-takeover provisions. Our Board of Directors has the authority to issue up to 1,000,000 shares of preferred stock and to determine the preferences, rights and privileges of those shares without any further vote or action by the shareholders. The rights of the holders of common stock may be harmed by rights granted to the holders of any preferred stock that may be issued in the future.

In addition, some provisions of our Certificate of Incorporation and Bylaws could make it more difficult for a potential acquirer to acquire a majority of our outstanding voting stock. These include provisions that provide for a classified board of directors, prohibit shareholders from taking action by written consent and restrict the ability of shareholders to call special meetings. We are also subject to provisions of Delaware law that prohibit us from engaging in any business combination with any interested shareholder for a period of three years from the date the person became an interested shareholder, unless certain conditions are met, which could have the effect of delaying or preventing a change of control.

Factors that May Affect Future Results of Operations, Financial Condition or Business

Statements made in this report, the Annual Report to Shareholders of which this report is made a part, other reports and proxy statements filed with the Securities and Exchange Commission (SEC), communications to shareholders, press releases and oral statements made by representatives of the Company that are not historical in nature, or that state the Company’s or management’s intentions, hopes, beliefs, expectations, plans, goals or predictions of future events or performance, may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). Forward-looking statements can often be identified by the use of forward-looking terminology, such as “could,” “should,” “will,” “intended,” “continue,” “believe,” “may,” “expect,” “hope,” “anticipate,” “goal,” “forecast,” “plan,” “guidance” or “estimate” or the negative of these words, variations thereof or similar expressions. Forward-looking statements are not guarantees of future performance or results. They involve risks, uncertainties and assumptions. It is important to note that any such performance and actual results, financial condition or business, could differ materially from those expressed in such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in this Item 1A. Risk Factors and elsewhere herein or in other reports filed with the SEC. Other unforeseen factors not identified herein could also have such an effect. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes in future operating results, financial condition or business over time.

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Item 1B. Unresolved Staff Comments

None

Item 2. Properties

Our properties consist mainly of owned and leased office and data center facilities.

Our United States corporate world headquarters is located in a Company-owned office park (the Headquarters Campus) in North Kansas City, Missouri. The Headquarters Campus and three other nearby locations, collectively contain approximately 2.22 million gross square feet of useable space situated on 278 acres of land. The Headquarters Campus and the nearby properties primarily house office space, but also include space for other business needs, such as our Healthe Clinic and our Headquarters Campus data centers.

Company owned office space, known as the Innovation Campus, houses associates from our intellectual property organization and consists of 790,000 gross square feet of useable space located in Kansas City, Missouri.

Owned office space currently under construction, known as the Continuous Campus, will house associates who manage and support our clients' IT systems and consists of 611,000 gross square feet of useable space located in Kansas City, Kansas.

Our Cerner-operated data center facilities, which are used to provide remote hosting, disaster recovery and other services to our clients, are located at the Headquarters Campus and a leased facility in Lee’s Summit, Missouri.

As of the end of 2012, we leased additional office space in Tempe, Arizona; Culver City and Garden Grove, California; Denver, Colorado; Lenexa, Kansas; Waltham, Massachusetts; Minneapolis and Rochester, Minnesota; Columbia, Lee’s Summit and Kansas City, Missouri; Durham, North Carolina; New Concord, Ohio; and Vienna, Virginia. Globally, we also leased office space in: Brisbane, Sydney and Melbourne, Australia; Sao Paulo, Brazil; Toronto, Canada; Santiago, Chile; Cairo, Egypt; London, England; Paris, France; Idstein, Germany; Bangalore, India; Dublin, Ireland; Kuala Lumpur, Malaysia; Riyadh, Saudi Arabia; Singapore; Madrid, Spain; Doha, Qatar; and Abu Dhabi and Dubai, United Arab Emirates.

Item 3. Legal Proceedings

We are not a party to and none of our property is subject to any material pending legal proceedings, other than ordinary routine litigation incidental to our business.

Item 4. Mine Safety Disclosures

Not applicable

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Part II

Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Our common stock trades on The NASDAQ Global Select Market^SM under the symbol CERN. The following table sets forth the high, low and last sales prices for the fiscal quarters of 2012 and 2011 as reported by The Nasdaq Stock Market^®.

	2012						2011
	High		Low		Last		High		Low		Last
First Quarter	$	78.13	$	59.78	$	76.16	$	56.45	$	47.18	$	56.45
Second Quarter	86.91		72.26		82.66		62.54		54.46		62.54
Third Quarter	83.56		71.00		77.39		72.88		54.93		68.52
Fourth Quarter	81.12		68.00		76.08		69.97		55.75		61.25

At February 1, 2013, there were approximately 980 owners of record. To date, we have paid no cash dividends and we do not intend to pay cash dividends in the foreseeable future. We believe it is in the shareholders’ best interest for us to reinvest funds in the operation of the business.

The following table provides information with respect to Common Stock purchases by the Company during the fourth fiscal quarter of 2012:

Period	Total Number of Shares Purchased (a)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (b)	Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (b)
September 30, 2012 - October 27, 2012	2,356	$	72.56	—	—
October 28, 2012 - November 24, 2012	—	—		—	—
November 25, 2012 - December 29, 2012	—	—		—	—
Total	2,356	$	72.56	—

(a) All of the shares of common stock, par value $0.01 per share, presented on the table above were originally granted to employees as restricted stock pursuant to our Long-Term Incentive Plan F. The Long-Term Incentive Plan F allows for the withholding of shares to satisfy minimum tax obligations due upon the vesting of restricted stock, and pursuant to the Long-Term Incentive Plan F, the shares reflected above were relinquished by employees in exchange for our agreement to pay federal and state withholding obligations resulting from the vesting of the Company’s restricted stock.

(b) As announced on December 12, 2012, our Board of Directors authorized a stock repurchase program for an aggregate purchase of up to $170.0 million of our Common Stock. As of December 29, 2012, $170.0 million remains available under the authorized program. There were no shares repurchased by us under the program during the quarter or year ended December 29, 2012. The previous stock repurchase program approved by the Company's Board of Directors in 2008 was terminated.

See Part III, Item 12 for information relating to securities authorized for issuance under our equity compensation plans.

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Item 6. Selected Financial Data

(In thousands, except per share data)	2012		2011		2010		2009		2008
	(1)		(1)		(1)		(1)		(1)(2)
Statement of Operations Data:
Revenues	$	2,665,436	$	2,203,153	$	1,850,222	$	1,671,864	$	1,676,028
Operating earnings	571,662		459,798		359,333		292,006		278,885
Earnings before income taxes	587,708		469,694		362,212		292,681		281,431
Net earnings	397,232		306,627		237,272		193,465		188,658
Earnings per share:
Basic	2.32		1.82		1.44		1.19		1.17
Diluted	2.26		1.76		1.39		1.15		1.13
Weighted average shares outstanding:
Basic	170,931		168,634		164,916		161,963		161,097
Diluted	175,697		173,867		170,847		167,764		166,869
Balance Sheet Data:
Working capital	$	1,210,394	$	1,063,593	$	840,129	$	788,232	$	517,650
Total assets	3,704,468		3,000,358		2,422,790		2,148,567		1,880,988
Long-term debt and capital lease obligations, excl. current installments	136,557		86,821		67,923		95,506		111,370
Cerner Corporation shareholders' equity	2,833,650		2,310,681		1,905,297		1,580,678		1,311,009

(1) Includes share-based compensation expense. The impact of this expense is as follows:

(In thousands, except share data)	2012			2011			2010			2009			2008
Total share-based compensation expense	$	38,112		$	29,479		$	24,903		$	16,842		$	15,144
Amount of related income tax benefit	(14,578		)	(11,256		)	(9,329		)	(6,274		)	(5,641		)
Net impact on earnings	$	23,534		$	18,223		$	15,574		$	10,568		$	9,503
Decrease to diluted earnings per share	$	0.13		$	0.11		$	0.09		$	0.06		$	0.06

(2) Includes expense related to a settlement with a third party provider of software related to the use of the third party’s software in our remote hosting business. The settlement included compensation for the use of the software for periods prior to 2008 as well as compensation for licenses of the software for future use for existing and additional clients through January 2009. Of the total settlement amount, we determined that $5.0 million should have been recorded in prior periods, primarily 2005 through 2007. Based on this valuation, 2008 results include an increase of $8.0 million to sales and client service expense, a decrease of $5.0 million to net earnings, and a decrease of $0.03 to diluted earnings per share that are attributable to prior periods.

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

The following Management Discussion and Analysis (MD&A) is intended to help the reader understand our results of operations and financial condition. This MD&A is provided as a supplement to, and should be read in conjunction with, our financial statements and the accompanying notes to the financial statements (Notes).

Our fiscal year ends on the Saturday closest to December 31. Fiscal years 2012, 2011 and 2010 each consisted of 52 weeks and ended on December 29, 2012, December 31, 2011 and January 1, 2011, respectively. All references to years in this MD&A represent fiscal years unless otherwise noted.

Management Overview

Our revenues are primarily derived by selling, implementing and supporting software solutions, clinical content, hardware, devices and services that give health care providers secure access to clinical, administrative and financial data in real time, allowing them to improve quality, safety and efficiency in the delivery of health care.

Our fundamental strategy centers on creating organic growth by investing in research and development (R&D) to create solutions and services for the health care industry. This strategy has driven strong growth over the long-term, as reflected in five- and ten-year compound annual revenue growth rates of 12% or more. This growth has also created an important strategic footprint in health care, with Cerner^® solutions licensed by approximately 10,000 facilities around the world, including more than 2,700 hospitals; 4,150 physician practices; 45,000 physicians; 550 ambulatory facilities, such as laboratories, ambulatory centers, behavioral health centers, cardiac facilities, radiology clinics and surgery centers; 800 home health facilities; 45 employer sites and 1,750 retail pharmacies. Selling additional solutions back into this client base is an important element of our future revenue growth. We are also focused on driving growth through market share expansion by strategically aligning with health care providers that have not yet selected a supplier and by displacing competitors in health care settings that are looking to replace their current supplier.

We expect to drive growth through new initiatives and services that reflect our ongoing ability to innovate and expand our reach into health care. Examples of these include our CareAware^® health care device architecture and devices, employer services, Cerner ITWorks services, Cerner RevWorks services, and solutions on our Healthe Intent platform. Finally, we believe there is significant opportunity for growth outside of the United States, with many non-U.S. markets focused on HCIT as part of their strategy to improve the quality and lower the cost of health care.

Beyond our strategy for driving revenue growth, we are also focused on earnings growth. Similar to our history of growing revenue, our net earnings have increased at compound annual rates of more than 20% over the most recent five- and ten-year periods. We expect to drive continued earnings growth through ongoing revenue growth coupled with margin expansion, which we expect to achieve through efficiencies in our implementation and operational processes and by leveraging R&D investments and controlling general and administrative expenses.

We are also focused on continuing to deliver strong levels of cash flow, which we expect to do by continuing to grow earnings and prudently managing capital expenditures.

Results Overview

The Company delivered strong levels of bookings, revenues, earnings and cash flows in 2012.

New business bookings revenue in 2012, which reflects the value of executed contracts for software, hardware, professional services and managed services, was $3.1 billion, which is an increase of 15% compared to $2.7 billion in 2011. Our 2012 revenues increased 21% to $2.7 billion compared to $2.2 billion in 2011. The year-over-year increase in revenue reflects improved economic conditions, ongoing demand related to the HITECH Act, and increased contributions form new initiatives, such as device resale, Cerner ITWorks and Cerner RevWorks.

Our 2012 net earnings increased 30% to $397.2 million compared to $306.6 million in 2011. Diluted earnings per share increased 28% to $2.26 compared to $1.76 in 2011. The 2012 and 2011 net earnings and diluted earnings per share reflect the impact of stock-based compensation expense. The effect of these expenses reduced the 2012 net earnings and diluted earnings per share by $23.5 million and $0.13, and the 2011 earnings and diluted earnings per share by $18.2 million and $0.11, respectively. The growth in net earnings and diluted earnings per share was driven primarily by strong revenue growth and continued progress with our margin expansion initiatives, including efficiencies in our implementation and operational

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processes, leveraging R&D investments and controlling general and administrative expenses. Our full-year 2012 operating margin of 21.4% reflects an increase of 50 basis points compared to 2011, which was driven by strong margin expansion in our core business that was somewhat offset by record levels of lower-margin technology resale.

We had cash collections of receivables of $2.7 billion in 2012 compared to $2.2 billion in 2011. Days sales outstanding was 74 days for the 2012 fourth quarter compared to 73 days for the 2012 third quarter and 83 days for the 2011 fourth quarter. Operating cash flows for 2012 were strong at $708.3 million compared to $546.3 million in 2011.

Health Care Information Technology Market Outlook

We have provided a detailed assessment of the health care information technology market under “Health Care and Health Care IT Industry” in Part I, Item 1 "Business."

Results of Operations

Fiscal Year 2012 Compared to Fiscal Year 2011

(In thousands)	2012			% of Revenue		2011			% of Revenue		% Change
Revenues
System sales	$	902,799		34	%	$	706,714		32	%	28	%
Support and maintenance	604,247			23	%	550,554			25	%	10	%
Services	1,103,082			41	%	901,193			41	%	22	%
Reimbursed travel	55,308			2	%	44,692			2	%	24	%
Total revenues	2,665,436			100	%	2,203,153			100	%	21	%
Costs of revenue
Costs of revenue	608,197			23	%	441,672			20	%	38	%
Total margin	2,057,239			77	%	1,761,481			80	%	17	%
Operating expenses
Sales and client service	1,020,640			38	%	869,962			39	%	17	%
Software development	301,370			11	%	286,801			13	%	5	%
General and administrative	163,567			6	%	144,920			7	%	13	%
Total operating expenses	1,485,577			56	%	1,301,683			59	%	14	%
Total costs and expenses	2,093,774			79	%	1,743,355			79	%	20	%
Operating earnings	571,662			21	%	459,798			21	%	24	%
Other income, net	16,046					9,896
Income taxes	(190,476		)			(163,067		)
Net earnings	$	397,232				$	306,627				30	%

Revenues & Backlog

Revenues increased 21% to $2.7 billion in 2012, as compared to $2.2 billion in 2011.

• System sales, which include revenues from the sale of licensed software, software as a service, technology resale (hardware, devices, and sublicensed software), deployment period licensed software upgrade rights, installation fees, transaction processing and subscriptions, increased 28% to $902.8 million in 2012 from $706.7 million for the same period in 2011. The increase in system sales was driven by record levels of technology resale and solid growth in subscriptions and software.

• Support and maintenance revenues increased 10% to $604.2 million in 2012 compared to $550.6 million during the same period in 2011. This increase was attributable to continued success at selling Cerner Millennium applications and implementing them at client sites. We expect that support and maintenance revenues will continue to grow as the base of installed Cerner Millennium systems grows.

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• Services revenue, which includes professional services, excluding installation, and managed services, increased 22% to $1.1 billion in 2012 from $0.9 billion for the same period in 2011. This increase was driven by growth in CernerWorksmanaged services as a result of continued demand for our hosting services and an increase in professional services due to increased implementation activities and growth in Cerner ITWorks services.

Contract backlog, which reflects new business bookings that have not yet been recognized as revenue, increased 21% in 2012 when compared to 2011. This increase was driven by growth in new business bookings during the past four quarters, including continued strong levels of managed services and CernerITWorks services bookings that typically have longer contract terms.

A summary of total backlog at the end of 2012 and 2011 follows:

(In thousands)	2012		2011
Contract backlog	$	6,534,564	$	5,401,427
Support and maintenance backlog	738,154		705,744
Total backlog	$	7,272,718	$	6,107,171

Costs of Revenue

Cost of revenues as a percentage of total revenues was 23% in 2012, compared to 20% in the same period of 2011. The higher cost of revenues as a percent of revenue was driven by a higher mix of technology resale, which carries a higher cost of revenue.

Cost of revenues includes the cost of reimbursed travel expense, sales commissions, third party consulting services and subscription content and computer hardware, devices and sublicensed software purchased from manufacturers for delivery to clients. It also includes the cost of hardware maintenance and sublicensed software support subcontracted to the manufacturers. Such costs, as a percent of revenues, typically have varied as the mix of revenue (software, hardware, devices, maintenance, support, services and reimbursed travel) carrying different margin rates changes from period to period. Cost of revenues does not include the costs of our client service personnel who are responsible for delivering our service offerings. Such costs are included in sales and client service expense.

Operating Expenses

Total operating expenses increased 14% to $1.5 billion in 2012, compared with $1.3 billion in 2011.

• Sales and client service expenses as a percent of total revenues were 38% in 2012, compared to 39% in the same period of 2011. These expenses increased 17% to $1.0 billion in 2012, from $0.9 billion in the same period of 2011. Sales and client service expenses include salaries of sales and client service personnel, depreciation and other expenses associated with our CernerWorks managed service business, communications expenses, unreimbursed travel expenses, expense for share-based payments, sales and marketing salaries and trade show and advertising costs. The decrease as a percent of revenue reflects ongoing efficiencies in our implementation and operational processes.

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• Software development expenses as a percent of revenue were 11% in 2012, compared to 13% in 2011. Expenditures for software development reflect ongoing development and enhancement of the Cerner Millennium platform, including investments in the next evolution of Cerner Millennium, Millennium+, which leverages the cloud and enables greater mobility. The reduction as a percentage of revenue reflects our efforts to control spending relative to revenue growth. Because of the strong platform we have built, we are able to continue advancing our solutions and investing in new solutions without large increases in spending. Expense was also limited by a higher percentage of our software development investments being capitalized, which we expect to continue, as a higher percent of our development initiatives are focused on new functionality versus maintenance. A summary of our total software development expense in 2012 and 2011 is as follows:

	For the Years Ended
(In thousands)	2012			2011
Software development costs	$	319,828		$	290,645
Capitalized software costs	(98,067		)	(81,417		)
Capitalized costs related to share-based payments	(2,122		)	(1,525		)
Amortization of capitalized software costs	81,731			79,098
Total software development expense	$	301,370		$	286,801

• General and administrative expenses as a percent of total revenues were 6% in 2012, compared to 7% in 2011. These expenses increased 13% to $163.6 million in 2012, from $144.9 million for the same period in 2011. General and administrative expenses include salaries for corporate, financial and administrative staffs, utilities, communications expenses, professional fees, transaction gains or losses on foreign currency and expense for share-based payments. The increase in general and administrative expenses was primarily driven by an increase in corporate personnel costs, as we have continued to increase such personnel to support our overall revenue growth.

Non-Operating Items

• Interest income increased to $16.5 million in 2012 from $15.2 million in 2011 due primarily to growth in investments. Interest expense decreased to $5.1 million in 2012 compared to $5.3 million in 2011 due primarily to payments on our long-term debt, offset by increased capital lease obligations. Other income in 2012 also includes a $4.5 million gain recognized on the disposition of one of our cost-method investments.

• Our effective tax rate decreased to 32% in 2012 from 35% in 2011. This decrease was primarily due to an increase in net favorable permanent differences, along with a favorable adjustment to our unrecognized tax benefits, partially offset by the expiration of the research and development tax credit on December 31, 2011. We do not expect the favorable impact of permanent differences to be as significant in 2013. We also do not expect any significant favorable adjustments to our unrecognized tax benefits in 2013. Refer to Note (12) of the notes to consolidated financial statements for further information regarding our effective tax rate.

In January 2013, the American Taxpayer Relief Act of 2012 (Act) became law. The Act reinstates the research and development tax credit retroactively from January 1, 2012 to December 31, 2013. In the first quarter of 2013, we will recognize the research and development tax credit related to 2012 as a favorable discrete item. Research and development tax credits generated in 2013 will be recognized pro-rata over that year as a component of the overall 2013 effective tax rate.

Operations by Segment

We have two operating segments: Domestic and Global. The Domestic segment includes revenue contributions and expenditures associated with business activity in the United States. The Global segment includes revenue contributions and expenditures linked to business activity in Argentina, Aruba, Australia, Austria, Canada, Cayman Islands, Chile, China (Hong Kong), Egypt, England, France, Germany, Guam, India, Ireland, Italy, Japan, Malaysia, Mexico, Morocco, Puerto Rico, Qatar, Saudi Arabia, Singapore, Spain, Sweden, Switzerland and the United Arab Emirates.

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The following table presents a summary of the operating information for the years ended 2012 and 2011:

(In thousands)	2012			% of Revenue	2011			% of Revenue	% Change
Domestic Segment
Revenues	$	2,341,304		100%	$	1,894,454		100%	24%
Costs of revenue	548,813			23%	387,466			20%	42%
Operating expenses	506,249			22%	439,465			23%	15%
Total costs and expenses	1,055,062			45%	826,931			44%	28%
Domestic operating earnings	1,286,242			55%	1,067,523			56%	20%
Global Segment
Revenues	324,132			100%	308,699			100%	5%
Costs of revenue	59,384			18%	54,206			18%	10%
Operating expenses	131,580			41%	126,997			41%	4%
Total costs and expenses	190,964			59%	181,203			59%	5%
Global operating earnings	133,168			41%	127,496			41%	4%
Other, net	(847,748		)		(735,221		)		15%
Consolidated operating earnings	$	571,662			$	459,798			24%

Domestic Segment

• Revenues increased 24% to $2.3 billion in 2012 from $1.9 billion in 2011. This increase was primarily driven by strong growth in technology resale and professional services.

• Cost of revenues was 23% of revenues in 2012, compared to 20% of revenues in 2011. The higher cost of revenues as a percent of revenue was primarily driven by a higher mix of technology resale, which carries a higher cost of revenue.

• Operating expenses increased 15% to $506.2 million in 2012 from $439.5 million in 2011, due primarily to growth in managed services and professional services expenses.

Global Segment

• Revenues increased 5% to $324.1 million in 2012 from $308.7 million in 2011. This increase was primarily driven by growth in technology resale and managed services, along with a higher level of support services. Growth in our Global Segment revenues has lagged our faster rate of revenue growth in our Domestic Segment due to the more significant impact of the economic downturn of the last several years on the non-U.S. countries in which we conduct operations.

• Cost of revenues was 18% in 2012 and 2011, due to a similar mix of sales.

• Operating expenses were at $131.6 million in 2012, compared to $127.0 million in 2011, primarily due to overall growth in our Global segment.

Other, net

Operating results not attributed to an operating segment include expenses, such as centralized professional services costs, software development, marketing, general and administrative, stock-based compensation, depreciation, and amortization. These expenses increased 15% to $847.7 million in 2012 from $735.2 million in 2011. This increase was primarily due to growth in corporate and development personnel costs.

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Fiscal Year 2011 Compared to Fiscal Year 2010

(In thousands)	2011			% of Revenue		2010			% of Revenue		% Change
Revenues
System sales	$	706,714		32	%	$	550,792		30	%	28	%
Support and maintenance	550,554			25	%	517,494			28	%	6	%
Services	901,193			41	%	749,483			40	%	20	%
Reimbursed travel	44,692			2	%	32,453			2	%	38	%
Total revenues	2,203,153			100	%	1,850,222			100	%	19	%
Costs of revenue
Costs of revenue	441,672			20	%	320,356			17	%	38	%
Total margin	1,761,481			80	%	1,529,866			83	%	15	%
Operating expenses
Sales and client service	869,962			39	%	767,152			42	%	13	%
Software development	286,801			13	%	272,851			15	%	5	%
General and administrative	144,920			7	%	130,530			7	%	11	%
Total operating expenses	1,301,683			59	%	1,170,533			64	%	11	%
Total costs and expenses	1,743,355			79	%	1,490,889			81	%	17	%
Operating earnings	459,798			21	%	359,333			19	%	28	%
Other income, net	9,896					2,879
Income taxes	(163,067		)			(124,940		)
Net earnings	$	306,627				$	237,272				29	%

Revenues & Backlog

Revenues increased 19% to $2.2 billion in 2011, as compared to $1.9 billion in 2010.

• System sales increased 28% to $706.7 million in 2011 from $550.8 million in 2010. The increase in system sales was driven by strong increases in licensed software, technology resale, and subscriptions.

• Support and maintenance revenues increased 6% to $550.6 million in 2011 compared to $517.5 million in 2010. This increase was attributable to continued success at selling Cerner Millennium applications and implementing them at client sites.

• Services revenue increased 20% to $901.2 million in 2011 compared to $749.5 million in 2010. This increase was driven by growth in CernerWorks managed services as a result of continued demand for our hosting services and an increase in professional services due to increased implementation activities and growth in Cerner ITWorks services.

Contract backlog, which reflects new business bookings that have not yet been recognized as revenue, increased 26% in 2011 compared to 2010. This increase was driven by growth in new business bookings during 2011, including continued strong levels of managed services and Cerner ITWorks bookings that typically have longer contract terms.

A summary of total backlog at the end of 2011 and 2010 follows:

(In thousands)	2011		2010
Contract backlog	$	5,401,427	$	4,285,267
Support and maintenance backlog	705,744		654,913
Total backlog	$	6,107,171	$	4,940,180

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Costs of Revenue

Cost of revenues as a percentage of total revenues was 20% of total revenues in 2011, as compared to 17% of total revenues in 2010. The higher cost of revenues as a percent of revenue was primarily driven by a higher mix of technology resale, which carries a higher cost of revenue, and a slightly higher level of third party consulting costs.

Operating Expenses

Total operating expenses increased 11% in 2011 to $1.3 billion as compared to $1.2 billion in 2010.

• Sales and client service expenses as a percent of total revenues were 39% in 2011, as compared to 42% in 2010. These expenses increased 13% to $870.0 million in 2011, from $767.2 million in 2010. The increase in these expenses was primarily attributable to growth in the managed services business and a higher level of professional services expenses. The decrease as a percent of revenue reflected efficiencies in our implementation and operational processes.

• Software development expenses as a percent of revenue were 13% in 2011, as compared to 15% in 2010. These expenses increased 5% in 2011 to $286.8 million, from $272.9 million in 2010. Expenditures for software development in 2011 reflected continued development and enhancement of the Cerner Millennium platform and software solutions and investments in new growth initiatives. Although these expenses increased in 2011, the reduction as a percent of revenue reflected our ongoing efforts to control spending relative to revenue growth. A summary of our total software development expense in 2011 and 2010 is as follows:

	For the Years Ended
(In thousands)	2011			2010
Software development costs	$	290,645		$	284,836
Capitalized software costs	(81,417		)	(79,631		)
Capitalized costs related to share-based payments	(1,525		)	(1,348		)
Amortization of capitalized software costs	79,098			68,994
Total software development expense	$	286,801		$	272,851

• General and administrative expenses as a percent of total revenues were 7% in 2011 and 2010. These expenses increased 11% to $144.9 million in 2011 from $130.5 million in 2010. An increase in corporate personnel costs accounted for the majority of the overall increase in general and administrative expenses, as we increased personnel to support our overall revenue growth.

Non-Operating Items

• Interest income increased to $15.2 million in 2011 from $10.3 million in 2010 due primarily to growth in investments and related increase in investment returns. Interest expense decreased to $5.3 million in 2011 from $6.9 million in 2010 due to payment on our long-term debt.

• Our effective tax rate was 35% in 2011, as compared to 34% in 2010. The increase was attributable to the mix of domestic and foreign earnings.

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Operations by Segment

The following table presents a summary of our operating segment information for the years ended 2011 and 2010:

(In thousands)	2011			% of Revenue	2010			% of Revenue	% Change
Domestic Segment
Revenues	$	1,894,454		100%	$	1,562,563		100%	21%
Costs of revenue	387,466			20%	272,385			17%	42%
Operating expenses	439,465			23%	417,181			27%	5%
Total costs and expenses	826,931			44%	689,566			44%	20%
Domestic operating earnings	1,067,523			56%	872,997			56%	22%
Global Segment
Revenues	308,699			100%	287,659			100%	7%
Costs of revenue	54,206			18%	47,971			17%	13%
Operating expenses	126,997			41%	124,546			43%	2%
Total costs and expenses	181,203			59%	172,517			60%	5%
Global operating earnings	127,496			41%	115,142			40%	11%
Other, net	(735,221		)		(628,806		)		17%
Consolidated operating earnings	$	459,798			$	359,333			28%

Domestic Segment

• Revenues increased 21% to $1.9 billion in 2011 from $1.6 billion in the same period in 2010. This increase was driven by growth across all business models, with particular strength in licensed software, technology resale, professional services and managed services.

• Cost of revenues increased to 20% of revenues in 2011, compared to 17% in 2010. The higher cost of revenues as a percent of revenue was primarily driven by a higher mix of technology resale, which carries a high cost of revenue, and an increase in third party consulting costs.

• Operating expenses increased 5% to $439.5 million in 2011, from $417.2 million in 2010, due primarily to growth in managed services and professional services expense.

Global Segment

• Revenues increased 7% to $308.7 million in 2011 from $287.7 million in 2010. Global revenues increased due to an increase in licensed software and managed services revenue, which was partially offset by a decrease in professional services and technology resale revenue. The global comparisons were also impacted by a change in certain contract accounting estimates during the first quarter of 2010.

• Cost of revenues was 18% and 17% in 2011 and 2010, respectively. The higher cost of revenues in 2011 was primarily driven by an increase in third party professional services costs.

• Operating expenses increased 2% to $127.0 million in 2011 from $124.5 million in 2010, which was primarily to support our revenue growth.

Other, net

These expenses increased 17% to $735.2 million in 2011 from $628.8 million in 2010. This increase was primarily due to increased costs in software development, increased corporate and development personnel costs, increased stock compensation costs, and growth in other professional services.

Liquidity and Capital Resources

Our liquidity is influenced by many factors, including the amount and timing of our revenues, our cash collections from our clients and the amount we invest in software development, acquisitions and capital expenditures.

Our principal sources of liquidity are our cash, cash equivalents, which consist of money market funds and time deposits

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with original maturities of less than 90 days, and short-term investments. At the end of 2012, we had cash and cash equivalents of $317.1 million and short-term investments of $719.7 million, as compared to cash and cash equivalents of $243.1 million and short-term investments of $531.6 million at the end of 2011.

Approximately 15% of our aggregate cash, cash equivalents and short-term investments at December 29, 2012, were held outside of the United States. As part of our business strategy, we plan to indefinitely reinvest the earnings of our foreign operations; however, should the earnings of our foreign operations be repatriated, we would accrue and pay tax on such earnings, which may be material.

Additionally, we maintain a $100.0 million multi-year revolving credit facility, which expires in February 2017. The facility provides an unsecured revolving line of credit for working capital purposes, along with a letter of credit facility. Interest is payable at a rate based on prime, LIBOR, or the U.S. federal funds rate, plus a spread that varies depending on the leverage ratios maintained. The agreement provides certain restrictions on our ability to borrow, incur liens, sell assets and pay dividends and contains certain cash flow and liquidity covenants. As of the end of 2012, we were in compliance with all debt covenants. As of the end of 2012, we had no outstanding borrowings under this agreement; however, we had $14.3 million of outstanding letters of credit, which reduced our available borrowing capacity to $85.7 million.

We believe that our present cash position, together with cash generated from operations, short-term investments and, if necessary, our available line of credit, will be sufficient to meet anticipated cash requirements during 2013.

The following table summarizes our cash flows in 2012, 2011 and 2010:

	For the Years Ended
(In thousands)	2012			2011			2010
Cash flows from operating activities	$	708,314		$	546,294		$	456,444
Cash flows from investing activities	(701,631		)	(565,091		)	(520,896		)
Cash flows from financing activities	66,034			48,853			34,841
Effect of exchange rate changes on cash	1,257			(1,421		)	2,399
Total change in cash and cash equivalents	73,974			28,635			(27,212		)
Cash and cash equivalents at beginning of period	243,146			214,511			241,723
Cash and cash equivalents at end of period	$	317,120		$	243,146		$	214,511
Free cash flow (non-GAAP)	$	424,696		$	358,557		$	273,154

Cash from Operating Activities

	For the Years Ended
(In thousands)	2012			2011			2010
Cash collections from clients	$	2,714,315		$	2,211,361		$	1,900,145
Cash paid to employees and suppliers and other	(1,840,682		)	(1,543,414		)	(1,315,077		)
Cash paid for interest	(6,448		)	(5,786		)	(6,887		)
Cash paid for taxes, net of refund	(158,871		)	(115,867		)	(121,737		)
Total cash from operations	$	708,314		$	546,294		$	456,444

Cash flow from operations increased $162.0 million in 2012 compared to 2011 and $89.9 million in 2011 compared to 2010 due primarily to the increase in cash impacting earnings, along with cash provided by working capital changes. During 2012, 2011 and 2010, we received total client cash collections of $2.7 billion, $2.2 billion and $1.9 billion, respectively, of which 3%, 3% and 4%, respectively, were received from third party client financing arrangements and non-recourse payment assignments. Days sales outstanding was 74 days in the fourth quarter of 2012, 73 days in the third quarter of 2012 and 83 days in the fourth quarter of 2011. Revenues provided under support and maintenance agreements represent recurring cash flows. Support and maintenance revenues increased 10% in 2012 and 6% in 2011. We expect these revenues to continue to grow as the base of installed Cerner Millennium systems grows.

Cash from Investing Activities

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	For the Years Ended
(In thousands)	2012			2011			2010
Capital purchases	$	(183,429	)	$	(104,795	)	$	(102,311	)
Capitalized software development costs	(100,189		)	(82,942		)	(80,979		)
Purchases of investments, net of sales and maturities	(354,603		)	(291,393		)	(312,340		)
Other, net	(63,410		)	(85,961		)	(25,266		)
Total cash flows from investing activities	$	(701,631	)	$	(565,091	)	$	(520,896	)

Cash flows from investing activities consist primarily of capital spending and our short-term investment activities. Capital spending consists of capitalized equipment purchases primarily to support growth in our CernerWorks managed services business, building and improvement purchases to support our facilities requirements and capitalized spending to support our ongoing software development initiatives. Capital spending is expected to increase in 2013, primarily due to capital purchases associated with new office space and spending related to software development initiatives; however, we still expect strong levels of free cash flow.

Short-term investment activity consists of the investment of cash generated by our business in excess of what is necessary to fund operations. We expect to continue such short-term investment activity in 2013, as we expect strong levels of cash flow.

During 2012, we completed our acquisition of Anasazi Software, Inc. for $40.5 million, net of cash acquired. During 2011, we completed our acquisitions of Resource Systems, Inc. and Clairvia, Inc. for approximately $28.1 million and $37.2 million, net of cash acquired, respectively. During 2010, we completed our acquisition of IMC Health Care, Inc. for approximately $14.5 million, net of cash acquired. We expect to continue seeking and completing strategic business acquisitions that are complementary to our business.

Cash from Financing Activities

	For the Years Ended
(In thousands)	2012			2011			2010
Repayment of long-term debt and capital lease obligations	$	(17,083	)	$	(25,701	)	$	(27,625	)
Cash from option exercises (including excess tax benefits)	86,517			75,333			60,950
Other, net	(3,400		)	(779		)	1,516
Total cash flows from financing activities	$	66,034		$	48,853		$	34,841

Cash inflows from stock option exercises are dependent on a number of factors, including the price of our common stock, grant activity under our stock option and equity plans, and overall market volatility. We expect cash inflows from stock option exercises to continue in 2013 based on the number of exercisable options at the end of 2012 and our current stock price.

Free Cash Flow

	For the Years Ended
(In thousands)	2012			2011			2010
Cash flows from operating activities (GAAP)	$	708,314		$	546,294		$	456,444
Capital purchases	(183,429		)	(104,795		)	(102,311		)
Capitalized software development costs	(100,189		)	(82,942		)	(80,979		)
Free cash flow (non-GAAP)	$	424,696		$	358,557		$	273,154

Free cash flow increased $66.1 million from 2011 to 2012 and $85.4 million from 2010 to 2011, which we believe reflects continued strength in our earnings. Free cash flow is a non-GAAP financial measure used by management along with GAAP results to analyze our earnings quality and overall cash generation of the business. The presentation of free cash flow is not meant to be considered in isolation, nor 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 our consolidated financial statements prepared in accordance with GAAP. Free cash flow 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 calculation. We believe free cash flow is important to enable investors to better understand

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and evaluate our ongoing operating results and allows for greater transparency in the review of our overall financial, operational and economic performance, because free cash flow takes into account the capital expenditures necessary to operate our business.

Contractual Obligations, Commitments and Off Balance Sheet Arrangements

The following table represents a summary of our contractual obligations and commercial commitments at the end of 2012, except short-term purchase order commitments arising in the ordinary course of business.

	Payments Due by Period
(In thousands)	2013		2014		2015		2016		2017		2018 and thereafter		Total
Balance sheet obligations(a):
Long-term debt obligations	$	24,765	$	15,015	$	15,015	$	—	$	—	$	—	$	54,795
Interest on long-term debt obligations	2,808		1,664		832		—		—		—		5,304
Capital lease obligations	34,817		32,860		32,025		30,214		11,428		—		141,344
Interest on capital lease obligations	3,900		2,855		1,767		589		94		—		9,205
Other obligations(b):
Operating lease obligations	24,943		22,843		16,803		12,210		11,911		40,133		128,843
Purchase obligations	39,654		33,052		12,721		2,594		2,184		4,000		94,205
Total	$	130,887	$	108,289	$	79,163	$	45,607	$	25,617	$	44,133	$	433,696

(a) At the end of 2012, liabilities for unrecognized tax benefits were $2.2 million.

(b) At the end of 2012, we had certain obligations related to the construction of office space in Kansas City, Kansas. Refer to Note (16) of the notes to consolidated financial statements for information regarding the construction.

We have no off balance sheet arrangements as defined in Regulation S-K. The effects of inflation on our business during 2012, 2011 and 2010 were insignificant.

Recent Accounting Pronouncements

Refer to Note (1) of the notes to consolidated financial statements for information regarding recently adopted accounting pronouncements.

Critical Accounting Policies

We believe that there are several accounting policies that are critical to understanding our historical and future performance, as these policies affect the reported amount of revenue and other significant areas involving our judgments and estimates. These significant accounting policies relate to revenue recognition, software development, potential impairments of goodwill, and income taxes. These policies and our procedures related to these policies are described in detail below and under specific areas within this MD&A. In addition, Note (1) to the consolidated financial statements expands upon discussion of our accounting policies.

Revenue Recognition

We recognize revenue within our multiple element arrangements, including software and software-related services, using the residual method. Key factors in our revenue recognition model are our assessments that installation services are essential to the functionality of our software, whereas implementation services are not, and the length of time it takes for us to achieve the delivery and installation milestones for our licensed software. If our business model were to change such that implementation services are deemed to be essential to the functionality of our software, the period of time over which our licensed software revenue would be recognized would lengthen.

We generally recognize revenue from the sale of our licensed software over two key milestones, delivery and installation, based on percentages that reflect the underlying effort from planning to installation. Generally, both milestones are achieved in the quarter the contracts are executed. If the period of time to achieve our delivery and installation milestones for our licensed software were to lengthen, our milestones would be adjusted and the timing of revenue recognition for our licensed software could materially change.

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We also recognize revenue for certain projects using the percentage of completion method. Our revenue recognition is dependent upon our ability to reliably estimate the direct labor hours to complete a project which generally can span several years. We utilize our historical project experience and detailed planning process as a basis for our future estimates to complete current projects. Significant delays in completion of the projects, unforeseen cost increases or penalties could result in significant reductions to revenue and margins on these contracts. The actual project results can be significantly different from the estimated results. When adjustments are identified near or at the end of a project, the full impact of the change in estimate is recognized in that period. This can result in a material impact on our results for a single reporting period.

Software Development Costs

Costs incurred internally in creating computer software solutions and enhancements to those solutions are expensed until completion of a detailed program design, which is when we determine that technological feasibility has been established. Thereafter, all software development costs are capitalized until such time as the software solutions and enhancements are available for general release, and the capitalized costs subsequently are reported at the lower of amortized cost or net realizable value.

Net realizable value is computed as the estimated gross future revenues from each software solution less the amount of estimated future costs of completing and disposing of that product. Because the development of projected net future revenues related to our software solutions used in our net realizable value computation is based on estimates, a significant reduction in our future revenues could impact the recovery of our capitalized software development costs. We historically have not experienced significant inaccuracies in computing the net realizable value of our software solutions and the difference between the net realizable value and the unamortized cost has grown over the past three years. We expect this trend to continue in the future. If we missed our estimates of net future revenues by 10%, the amount of our capitalized software development costs would not be impaired.

Capitalized costs are amortized based on current and expected net future revenue for each software solution with minimum annual amortization equal to the straight-line amortization over the estimated economic life of the software solution. We are amortizing capitalized costs over five years. The five-year period over which capitalized software development costs are amortized is an estimate based upon our forecast of a reasonable useful life for the capitalized costs. Historically, use of our software programs by our clients has exceeded five years and is capable of being used a decade or more.

We expect that major software information systems companies, large information technology consulting service providers and systems integrators and others specializing in the health care industry may offer competitive products or services. The pace of change in the HCIT market is rapid and there are frequent new product introductions, product enhancements and evolving industry standards and requirements. As a result, the capitalized software solutions may become less valuable or obsolete and could be subject to impairment.

Goodwill

Goodwill is not amortized but is evaluated for impairment annually or whenever there is an impairment indicator. All goodwill is assigned to a reporting unit, where it is subject to an annual impairment assessment. We assess goodwill for impairment in the second quarter of each fiscal year and evaluate impairment indicators at each quarter end. We assessed our goodwill for impairment in the second quarters of 2012 and 2011 and concluded that goodwill was not impaired. The 2012 assessment consisted of a qualitative analysis in accordance with new guidance effective in 2012. The 2011 assessment consisted of a quantitative analysis, in which the fair values of each of our reporting units exceeded their carrying amounts by a significant margin. We used a discounted cash flow analysis utilizing Level 3 inputs, to determine the fair value of the reporting units in 2011. Goodwill amounted to $247.6 million and $211.8 million at the end of 2012 and 2011, respectively. If future anticipated cash flows from our reporting units that recognized goodwill do not materialize as expected, our goodwill could be impaired, which could result in significant charges to earnings.

Income Taxes

We make a number of assumptions and estimates in determining the appropriate amount of expense to record for income taxes. These assumptions and estimates consider the taxing jurisdictions in which we operate as well as current tax regulations. Accruals are established for estimates of tax effects for certain transactions, business structures and future projected profitability of our businesses based on our interpretation of existing facts and circumstances. If these assumptions and estimates were to change as a result of new evidence or changes in circumstances, the change in estimate could result in a material adjustment to the consolidated financial statements.

We have discussed the development and selection of these critical accounting estimates with the Audit Committee of our

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Board of Directors and the Audit Committee has reviewed our disclosure contained herein.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

We use a foreign-currency denominated debt instrument to reduce our foreign currency exchange rate exposure in the U.K. As of the end of 2012, we designated all of our Great Britain Pound (GBP) denominated long-term debt (27.9 million GBP) as a net investment hedge of our U.K. operations. Because the borrowing is denominated in pounds, we are exposed to movements in the foreign currency exchange rate between the U.S. dollar (USD) and the GPB. We estimate that a hypothetical 10% adverse change in the foreign currency exchange rate between the USD and GBP would have impacted the unrealized loss, net of related income tax effects, of the net investment hedge recognized in other comprehensive income in 2012 by approximately $2.8 million, as compared to $3.6 million in 2011. The 2012 model assumes an exchange rate of 1.617 at December 29, 2012 and a tax rate of 38.25%. The hypothetical decrease in other comprehensive income in 2012 from 2011 is a result of a lower amount of GBP denominated debt outstanding. Actual results may differ. Please refer to Notes (9) and (10) to the Consolidated Financial Statements for a more detailed discussion of the foreign-currency denominated debt instrument.

Item 8. Financial Statements and Supplementary Data

The Financial Statements and Notes required by this Item are submitted as a separate part of this report. See Note (19) to the Consolidated Financial Statements for supplementary financial information.

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

N/A

Item 9A. Controls and Procedures

a) The Company’s Chief Executive Officer (CEO) and Chief Financial Officer (CFO) have evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in the Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Annual Report (the Evaluation Date). They have concluded that, as of the Evaluation Date and based on the evaluation of these controls and procedures required by paragraph (b) of Exchange Act Rule 13a-15 or 15d-15, these disclosure controls and procedures were effective to ensure that material information relating to the Company and its consolidated subsidiaries would be made known to them by others within those entities and would be disclosed on a timely basis. The CEO and CFO have concluded that the Company’s disclosure controls and procedures are designed, and are effective, to give reasonable assurance that the information required to be disclosed by the Company in reports that it files under the Exchange Act is recorded, processed, summarized and reported within the time period specified in the rules and forms of the SEC. They have also concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed in the reports that are filed or submitted under the Exchange Act are accumulated and communicated to the Company’s management to allow timely decisions regarding required disclosure.

b) There were no changes in the Company’s internal controls over financial reporting during the three months ended December 29, 2012, that have materially affected, or are reasonably likely to materially affect, its internal controls over financial reporting.

c) The Company’s management, including its CEO and CFO, have concluded that our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives and are effective at that reasonable assurance level. However, the Company’s management can provide no assurance that our disclosure controls and procedures or our internal control over financial reporting can prevent all errors and all fraud under all circumstances. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been or will be detected. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

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Management’s Report on Internal Control over Financial Reporting

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended). The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of December 29, 2012. In making this assessment, the Company’s management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in its Internal Control-Integrated Framework. The Company’s management has concluded that, as of December 29, 2012, the Company’s internal control over financial reporting is effective based on these criteria. The Company’s independent registered public accounting firm that audited the consolidated financial statements included in this annual report has issued an audit report on the effectiveness of the Company’s internal control over financial reporting, which is included herein under “Report of Independent Registered Public Accounting Firm”.

Item 9B. Other Information

N/A

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PART III

Item 10. Directors, Executive Officers and Corporate Governance

The information required by this Item 10 regarding our Directors and any nominees to become Directors will be set forth under the caption “Information Concerning Directors” in our Proxy Statement in connection with the 2013 Annual Shareholders’ Meeting scheduled to be held May 24, 2013 (the Proxy Statement), and is incorporated in this Item 10 by reference. The information required by this Item 10 regarding family relationships between any Director, Executive Officer or other person nominated to become a Director or Executive Officer will be set forth under the caption “Certain Transactions” in our Proxy Statement and is incorporated in this Item 10 by reference. The information required by this Item 10 concerning compliance with Section 16(a) of the Securities Exchange Act of 1934 will be set forth under the caption “Section 16(a) Beneficial Ownership Reporting Compliance” in our Proxy Statement and is incorporated in this Item 10 by reference.

The information required by this Item 10 concerning our Code of Business Conduct and Ethics will be set forth under the caption “Code of Business Conduct and Ethics” in our Proxy Statement and is incorporated in this Item 10 by reference. The information required by this Item 10 concerning our Audit Committee and our Audit Committee financial expert will be set forth under the caption “Audit Committee” in our Proxy Statement and is incorporated in this Item 10 by reference.

There have been no material changes to the procedures by which security holders may recommend nominees to our Board of Directors since our last disclosure thereof. The information required by this Item 10 regarding our Executive Officers is set forth under the caption “Executive Officers of the Registrant” in Part I above.

Item 11. Executive Compensation

The information required by this Item 11 concerning our executive compensation will be set forth under the caption “Compensation Discussion and Analysis” in our Proxy Statement and is incorporated in this Item 11 by reference. The information required by this Item 11 concerning director compensation will be set forth under the caption "Director Compensation" in our Proxy Statement and is incorporated in this Item 11 by reference. The information required by this Item 11 concerning Compensation Committee interlocks and insider participation will be set forth under the caption “Compensation Committee Interlocks and Insider Participation” in our Proxy Statement and is incorporated in this Item 11 by reference. The information required by this Item 11 concerning Compensation Committee report will be set forth under the caption “Compensation Committee Report” in our Proxy Statement and is incorporated in this Item 11 by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required by this Item 12 will be set forth under the caption “Security Ownership of Certain Beneficial Owners and Management” in our Proxy Statement and is incorporated in this Item 12 by reference.

The following table provides information about our common stock that may be issued under our equity compensation plans as of December 29, 2012:

(In thousands, except per share data)	Securities to be issued upon exercise of outstanding options and rights (1)	Weighted average exercise price per share (2)		Securities available for future issuance(3)
Plan category
Equity compensation plans approved by security holders (4)	12,337	$	33.97	7,718
Equity compensation plans not approved by security holders	—	—		—
Total	12,337			7,718

^{(1) Includes grants of stock options, time-based and performance-based restricted stock.} 

^{(2) Includes weighted-average exercise price of outstanding stock options only.}  

^{(3) Excludes securities to be issued upon exercise of outstanding options and rights.} 

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^{(4) Includes the Stock Option Plan D, Stock Option Plan E, 2001 Long-Term Incentive Plan F, 2004 Long-Term Incentive Plan G and 2011 Omnibus Equity Incentive Plan. All new grants are made under the 2011 Omnibus Equity Incentive Plan, as the previous plans are no longer active.} 

All other information required by this Item is incorporated by reference from the Proxy Statement under the section entitled “Principal Security Ownership and Certain Beneficial Owners.”

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information required by this Item 13 concerning our transactions with related parties will be set forth under the caption “Certain Transactions” in our Proxy Statement and is incorporated in this Item 13 by reference. The information required by this Item 13 concerning director independence will be set forth under the caption “Meetings of the Board and Committees” in our Proxy Statement and is incorporated in this Item 13 by reference.

Item 14. Principal Accountant Fees and Services

The information required by this Item 14 will be set forth under the caption “Relationship with Independent Registered Public Accounting Firm” in our Proxy Statement and is incorporated in this Item 14 by reference.

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PART IV

Item 15. Exhibits and Financial Statement Schedules

a) Financial Statements and Exhibits

(1) Consolidated Financial Statements:

Consolidated Balance Sheets - As of December 29, 2012 and December 31, 2011

Consolidated Statements of Operations -Years Ended December 29, 2012, December 31, 2011 and January 1, 2011

Consolidated Statements of Comprehensive Income - Years Ended December 29, 2012, December 31, 2011 and January 1, 2011

Consolidated Statements of Cash Flows - Years Ended December 29, 2012, December 31, 2011 and January 1, 2011

Consolidated Statements of Changes in Shareholders' Equity - Years Ended December 29, 2012, December 31, 2011 and January 1, 2011

(2) The following financial statement schedule and Report of Independent Registered Public Accounting Firm of the Registrant for the three-year period ended December 29, 2012 are included herein:

All other schedules are omitted, as the required information is inapplicable or the information is presented in the consolidated financial statements or related notes.

(3) See the Index to Exhibits immediately following the signature page of this Annual Report on Form 10-K.

38

SIGNATURES

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

	CERNER CORPORATION
Date: February 8, 2013	By:	/s/ Neal L. Patterson
		Neal L. Patterson
		Chairman of the Board, Chief Executive Officer
		and President

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:

Signature and Title	Date
/s/ Neal L. Patterson	February 8, 2013
Neal L. Patterson, Chairman of the Board, Chief Executive Officer and President (Principal Executive Officer)
/s/ Clifford W. Illig	February 8, 2013
Clifford W. Illig, Vice Chairman and Director
/s/ Marc G. Naughton	February 8, 2013
Marc G. Naughton, Executive Vice President, Treasurer and Chief Financial Officer (Principal Financial Officer)
/s/ Michael R. Battaglioli	February 8, 2013
Michael R. Battaglioli, Vice President and Chief Accounting Officer (Principal Accounting Officer)
/s/ Gerald E. Bisbee, Jr.	February 8, 2013
Gerald E. Bisbee, Jr., Ph.D., Director
/s/ Denis A. Cortese, M.D.	February 8, 2013
Denis A. Cortese, M.D., Director
/s/ John C. Danforth	February 8, 2013
John C. Danforth, Director
/s/ Linda M. Dillman	February 8, 2013
Linda M. Dillman, Director
/s/ William B. Neaves	February 8, 2013
William B. Neaves, Ph.D., Director
/s/ William D. Zollars	February 8, 2013
William D. Zollars, Director

39

INDEX TO EXHIBITS

		Incorporated by Reference
Exhibit Number	Exhibit Description	Form	Exhibit(s)	Filing Date SEC File No./Film No.	Filed Herewith
3(a)	Second Restated Certificate of Incorporation of the Registrant, dated December 5, 2003	10-K	3(a)	3/18/2004 0-15386/04677199
3(b)	Certificates of Amendment to the Second Restated Certificate of Incorporation	8-K	3.1 & 3.2	6/1/2011
3(c)	Amended & Restated Bylaws dated September 16, 2008 (as amended March 31, 2010 and March 9, 2011)	8-K	3.2	3/15/2011
4(a)	Specimen stock certificate	10-K	4(a)	2/28/2007 0-15386/08646565
4(b)	Amended and Restated Credit Agreement, dated February 10, 2012, among Cerner Corporation and U.S. Bank National Association, Bank of America, N.A., Commerce Bank, N.A., UMB Bank, N.A. and RBS Citizens, N.A.	8-K	99.1	2/13/2012 0-15386/12599122
4(c)	First Amendment to Amended and Restated Credit Agreement, dated December 28, 2012, among Cerner Corporation and U.S. Bank National Association, Bank of America, N.A., Commerce Bank, N.A., UMB Bank, N.A. and RBS Citizens, N.A.				X
4(d)	Note Purchase Agreement, dated November 1, 2005, among Cerner Corporation, as issuer, and AIG Annuity Insurance Company, American General Life Insurance Company and Principal Life Insurance Company, as purchasers	8-K	99.1	11/7/2005 0-15386/051183275
10(a)*	2006 Form of Indemnification Agreement for use between the Registrant and its Directors	10-K	10(a)	2/28/2007 0-15386/07658265
10(b)*	2010 Form of Indemnification Agreement for use between the Registrant and its Directors and Section 16 Officers	8-K	99.1	6/3/2010
10(c)*	Amended & Restated Executive Employment Agreement of Neal L. Patterson dated January 1, 2008	10-K	10(c)	2/27/2008
10(d)*	Cerner Corporation 2001 Long-Term Incentive Plan F	DEF 14A	Annex I	4/16/2001 0-15386/1603080
10(e)*	Cerner Corporation 2004 Long-Term Incentive Plan G (as amended on December 3, 2007)	10-K	10(g)	2/27/2008 0-15386/08646565
10(f)*	Cerner Corporation 2011 Omnibus Equity Incentive Plan	S-8	4.5	5/27/2011
10(g)*	Cerner Corporation 2001 Associate Stock Purchase Plan as Amended and Restated March 1, 2010 and May 27, 2011	S-8	4.6	5/27/2011
10(h)*	Cerner Corporation Qualified Performance-Based Compensation Plan (as Amended and Restated) dated May 28, 2010	DEF 14A	Annex I	4/16/2010
10(i)*	Form of 2012 Executive Performance Agreement	10-Q	10.1	4/27/2012
10(j)*	Cerner Corporation Executive Deferred Compensation Plan as Amended & Restated dated January 1, 2008	10-K	10(k)	2/27/2008 0-15386/08646565

40

10(k)*	Cerner Corporation 2005 Enhanced Severance Pay Plan as Amended & Restated dated August 15, 2010	10-Q	10(a)	10/29/2010
10(l)*	Cerner Corporation 2005 Enhanced Severance Pay Plan as Amended & Restated (for I.R.C. § 409A) Effective December 31, 2012				X
10(m)*	Exhibit A Severance Matrix, effective April 1, 2011 to the Cerner Corporation 2005 Enhanced Severance Pay Plan as Amended & Restated dated August 15, 2010	10-Q	10(a)	4/29/2011
10(n)*	Cerner Corporation 2001 Long-Term Incentive Plan F Nonqualified Stock Option Agreement	10-K	10(v)	3/17/2005 0-15386/05688830
10(o)*	Cerner Corporation 2001 Long-Term Incentive Plan F Nonqualified Stock Option Grant Certificate	10-Q	10(a)	11/10/2005 0-15386/051193974
10(p)*	Cerner Corporation 2001 Long-Term Incentive Plan F Director Restricted Stock Agreement	10-K	10(x)	3/17/2005 0-15386/05688830
10(q)*	Cerner Corporation 2001 Long-Term Incentive Plan F Nonqualified Stock Option Director Agreement	10-K	10(w)	3/17/2005 0-15386/05688830
10(r)*	Cerner Corporation 2001 Long-Term Incentive Plan F Performance-Based Restricted Stock Agreement for Section 16 Officers	8-K	99.1	6/4/2010
10(s)*	Cerner Corporation 2004 Long-Term Incentive Plan G Nonqualified Stock Option Grant Certificate	10-K	10(q)	2/27/2008 0-15386/08646565
10(t)*	Cerner Corporation 2011 Omnibus Equity Incentive Plan - Director Restricted Stock Agreement	10-Q	10.1	7/27/2012
10(u)	Cerner Corporation 2011 Omnibus Equity Incentive Plan - Performance Based Restricted Stock Agreement				X
10(v)*	Cerner Corporation 2011 Omnibus Equity Incentive Plan-Non-Qualified Stock Option Grant Certificate				X
10(w)*	Aircraft Time Sharing Agreement between Cerner Corporation and Clifford W. Illig dated February 7, 2007	8-K	10.3	2/9/2007 0-15386/07598012
10(x)*	Notice of Change of Aircraft Provided Under Time Sharing Agreement from Cerner Corporation to Clifford W. Illig dated December 28, 2009	10-K	10(t)	2/22/2010
10(y)	Notice of Change of Aircraft Provided Under Time Sharing Agreement from Cerner Corporation to Clifford W. Illig dated effective December 20, 2011				X
10(z)	Amended and Restated Aircraft Time Sharing Agreement between Cerner Corporation and Neal L. Patterson dated February 1, 2012				X
10(aa)	Interparty Agreement, dated January 19, 2010, among Kansas Unified Development, LLC, OnGoal, LLC and Cerner Corporation	8-K	99.1	1/22/2010
21	Subsidiaries of Registrant				X
23	Consent of Independent Registered Public Accounting Firm				X

41

31.1	Certification of Neal L. Patterson pursuant to Section 302 of Sarbanes-Oxley Act of 2002	X
31.2	Certification of Marc G. Naughton pursuant to Section 302 of Sarbanes-Oxley Act of 2002	X
32.1	Certification of Neal L. Patterson pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley Act of 2002	X
32.2	Certification of Marc G. Naughton pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley Act of 2002	X
101.INS	XBRL Instance Document	X
101.SCH	XBRL Taxonomy Extension Schema Document	X
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document	X
101.LAB	XBRL Taxonomy Extension Labels Linkbase Document	X
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document	X
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document	X

* Indicates a management contract or compensatory plan or arrangement required to be identified by Part IV, Item 15(a)(3).

42

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders

Cerner Corporation:

We have audited Cerner Corporation’s (the Corporation) internal control over financial reporting as of December 29, 2012, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Corporation’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting, appearing in Item 9A. Our responsibility is to express an opinion on the Corporation’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Cerner Corporation maintained, in all material respects, effective internal control over financial reporting as of December 29, 2012, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Cerner Corporation and subsidiaries as of December 29, 2012 and December 31, 2011, and the related consolidated statements of operations, comprehensive income, changes in shareholders’ equity, and cash flows for each of the years in the three-year period ended December 29, 2012, and our report dated February 8, 2013 expressed an unqualified opinion on those consolidated financial statements.

/s/KPMG LLP

Kansas City, Missouri

February 8, 2013

43

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders

Cerner Corporation:

We have audited the accompanying consolidated balance sheets of Cerner Corporation and subsidiaries (collectively, the Corporation) as of December 29, 2012 and December 31, 2011, and the related consolidated statements of operations, comprehensive income, changes in shareholders’ equity, and cash flows for each of the years in the three-year period ended December 29, 2012. These consolidated financial statements are the responsibility of the Corporation’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 the standards of the Public Company Accounting Oversight Board (United States). 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 Cerner Corporation and subsidiaries as of December 29, 2012 and December 31, 2011, and the results of their operations and their cash flows for each of the years in the three-year period ended December 29, 2012, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Cerner Corporation’s internal control over financial reporting as of December 29, 2012, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated February 8, 2013 expressed an unqualified opinion on the effectiveness of Cerner Corporation’s internal control over financial reporting.

/s/KPMG LLP

Kansas City, Missouri

February 8, 2013

44

CERNER CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

As of December 29, 2012 and December 31, 2011

(In thousands, except share data)	2012			2011
Assets
Current assets:
Cash and cash equivalents	$	317,120		$	243,146
Short-term investments	719,665			531,635
Receivables, net	577,848			563,209
Inventory	23,681			23,296
Prepaid expenses and other	113,572			94,232
Deferred income taxes, net	38,620			46,795
Total current assets	1,790,506			1,502,313
Property and equipment, net	569,708			488,996
Software development costs, net	267,307			248,750
Goodwill	247,616			211,826
Intangible assets, net	132,045			75,366
Long-term investments	509,467			359,324
Other assets	187,819			113,783
Total assets	$	3,704,468		$	3,000,358
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	141,212		$	85,545
Current installments of long-term debt and capital lease obligations	59,582			39,722
Deferred revenue	189,652			153,139
Accrued payroll and tax withholdings	125,253			109,227
Other accrued expenses	64,413			51,087
Total current liabilities	580,112			438,720
Long-term debt and capital lease obligations	136,557			86,821
Deferred income taxes and other liabilities	143,212			150,229
Deferred revenue	10,937			13,787
Total liabilities	870,818			689,557
Shareholders’ Equity:
Cerner Corporation shareholders’ equity:
Common stock, $.01 par value, 250,000,000 shares authorized, 172,089,351 shares issued at December 29, 2012 and 169,565,856 shares issued at December 31, 2011	1,721			1,696
Additional paid-in capital	842,490			723,490
Retained earnings	1,994,694			1,597,462
Accumulated other comprehensive loss, net	(5,255		)	(11,967		)
Total Cerner Corporation shareholders’ equity	2,833,650			2,310,681
Noncontrolling interest	—			120
Total shareholders’ equity	2,833,650			2,310,801
Total liabilities and shareholders’ equity	$	3,704,468		$	3,000,358

See notes to consolidated financial statements.

45

CERNER CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

For the years ended December 29, 2012, December 31, 2011 and January 1, 2011

	For the Years Ended
(In thousands, except per share data)	2012			2011			2010
Revenues:
System sales	$	902,799		$	706,714		$	550,792
Support, maintenance and services	1,707,329			1,451,747			1,266,977
Reimbursed travel	55,308			44,692			32,453
Total revenues	2,665,436			2,203,153			1,850,222
Costs and expenses:
Cost of system sales	427,456			296,561			221,055
Cost of support, maintenance and services	125,433			100,419			66,848
Cost of reimbursed travel	55,308			44,692			32,453
Sales and client service	1,020,640			869,962			767,152
Software development (Includes amortization of $81,731, $79,098 and $68,994, respectively)	301,370			286,801			272,851
General and administrative	163,567			144,920			130,530
Total costs and expenses	2,093,774			1,743,355			1,490,889
Operating earnings	571,662			459,798			359,333
Other income, net	16,046			9,896			2,879
Earnings before income taxes	587,708			469,694			362,212
Income taxes	(190,476		)	(163,067		)	(124,940		)
Net earnings	$	397,232		$	306,627		$	237,272
Basic earnings per share	$	2.32		$	1.82		$	1.44
Diluted earnings per share	$	2.26		$	1.76		$	1.39
Basic weighted average shares outstanding	170,931			168,634			164,916
Diluted weighted average shares outstanding	175,697			173,867			170,847

See notes to consolidated financial statements.

46

CERNER CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the years ended December 29, 2012, December 31, 2011 and January 1, 2011

	For the Years Ended
(In thousands)	2012		2011			2010
Net earnings	$	397,232	$	306,627		$	237,272
Foreign currency translation adjustment and other (net of taxes (benefit) of $(1,396), $(2,162) and $1,146, respectively)	6,511		(7,776		)	(937		)
Change in net unrealized holding gain (loss) on available-for-sale investments (net of taxes of $125, $0 and $0, respectively)	201		—			—
Comprehensive income	$	403,944	$	298,851		$	236,335

See notes to consolidated financial statements.

47

CERNER CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the years ended December 29, 2012, December 31, 2011 and January 1, 2011

	For the Years Ended
(In thousands)	2012			2011			2010
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings	$	397,232		$	306,627		$	237,272
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	222,580			212,556			193,337
Share-based compensation expense	36,113			27,919			23,723
Provision for deferred income taxes	8,342			(22,113		)	30,362
Changes in assets and liabilities (net of businesses acquired):
Receivables, net	(83,705		)	(128,979		)	(17,370		)
Inventory	(279		)	(12,329		)	188
Prepaid expenses and other	(2,224		)	9,974			35,378
Accounts payable	35,265			17,504			30,812
Accrued income taxes	(22,784		)	26,053			(42,651		)
Deferred revenue	33,277			33,792			(24,618		)
Other accrued liabilities	84,497			75,290			(9,989		)
Net cash provided by operating activities	708,314			546,294			456,444
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital purchases	(183,429		)	(104,795		)	(102,311		)
Capitalized software development costs	(100,189		)	(82,942		)	(80,979		)
Purchases of investments	(1,286,997		)	(1,083,274		)	(803,832		)
Sales and maturities of investments	932,394			791,881			491,492
Purchase of other intangibles	(22,870		)	(20,620		)	(10,780		)
Acquisition of businesses, net of cash acquired	(40,540		)	(65,341		)	(14,486		)
Net cash used in investing activities	(701,631		)	(565,091		)	(520,896		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of long-term debt and capital lease obligations	(17,083		)	(25,701		)	(27,625		)
Proceeds from excess tax benefits from share-based compensation	48,370			36,433			26,226
Proceeds from exercise of options	38,147			38,900			34,724
Contingent consideration payments for acquisition of businesses	(3,400		)	(779		)	—
Proceeds from sale of future receivables	—			—			1,516
Net cash provided by financing activities	66,034			48,853			34,841
Effect of exchange rate changes on cash and cash equivalents	1,257			(1,421		)	2,399
Net increase (decrease) in cash and cash equivalents	73,974			28,635			(27,212		)
Cash and cash equivalents at beginning of period	243,146			214,511			241,723
Cash and cash equivalents at end of period	$	317,120		$	243,146		$	214,511
Supplemental disclosures of cash flow information
Cash paid during the year for:
Interest	$	6,448		$	5,786		$	6,887
Income taxes, net of refund	158,871			115,867			121,737
Summary of acquisition transactions:
Fair value of net tangible assets (liabilities) acquired (assumed)	$	(6,375	)	$	(8,464	)	$	1,069
Fair value of intangible assets acquired	18,559			32,264			5,076
Fair value of goodwill	35,281			50,751			11,290
Less: Fair value of contingent liability payable	(1,916		)	(5,235		)	(1,725		)
Less: Fair value of working capital settlement payable	—			(939		)	—
Cash paid for acquisitions	45,549			68,377			15,710
Cash acquired	(5,009		)	(3,036		)	(1,224		)
Net cash used	$	40,540		$	65,341		$	14,486

See notes to consolidated financial statements.

48

CERNER CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

For the years ended December 29, 2012, December 31, 2011 and January 1, 2011

	Common Stock			Additional		Retained		Accumulated Other			Noncontrolling
(In thousands)	Shares	Amount		Paid-in Capital		Earnings		Comprehensive Income (Loss)			Interest
Balance at January 2, 2010	163,550	$	1,636	$	528,733	$	1,053,563	$	(3,254	)	$	120
Exercise of stock options	2,929	29		34,695		—		—			—
Employee share-based compensation expense	—	—		23,723		—		—			—
Employee share-based compensation net excess tax benefit	—	—		29,837		—		—			—
Other comprehensive income (loss)	—	—		—		—		(937		)	—
Net earnings	—	—		—		237,272		—			—
Balance at January 1, 2011	166,479	1,665		616,988		1,290,835		(4,191		)	120
Exercise of stock options	3,087	31		38,869		—		—			—
Employee share-based compensation expense	—	—		27,919		—		—			—
Employee share-based compensation net excess tax benefit	—	—		39,714		—		—			—
Other comprehensive income (loss)	—	—		—		—		(7,776		)	—
Net earnings	—	—		—		306,627		—			—
Balance at December 31, 2011	169,566	1,696		723,490		1,597,462		(11,967		)	120
Exercise of stock options (including net-settled option exercises)	2,523	25		32,561		—		—			—
Employee share-based compensation expense	—	—		36,113		—		—			—
Employee share-based compensation net excess tax benefit	—	—		50,326		—		—			—
Other comprehensive income (loss)	—	—		—		—		6,712
Net earnings	—	—		—		397,232		—			—
Dissolution of underlying entity	—	—		—		—		—			(120		)
Balance at December 29, 2012	172,089	$	1,721	$	842,490	$	1,994,694	$	(5,255	)	$	—

See notes to consolidated financial statements.

49

CERNER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) Basis of Presentation, Nature of Operations and Summary of Significant Accounting Policies

Basis of Presentation

The consolidated financial statements include all the accounts of Cerner Corporation and its subsidiaries. All significant intercompany transactions have been eliminated in consolidation.

The consolidated financial statements were prepared using accounting principles generally accepted in the United States. These principles require us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses. Actual results could differ from those estimates.

Our fiscal year ends on the Saturday closest to December 31. Fiscal years 2012, 2011 and 2010 consisted of 52 weeks and ended on December 29, 2012, December 31, 2011 and January 1, 2011, respectively. All references to years in these notes to consolidated financial statements represent fiscal years unless otherwise noted.

Nature of Operations

We design, develop, market, install, host and support health care information technology, health care devices, hardware and content solutions for health care organizations and consumers. We also provide a wide range of value-added services, including implementation and training, remote hosting, operational management services, revenue cycle services, support and maintenance, health care data analysis, clinical process optimization, transaction processing, employer health centers, employee wellness programs and third party administrator services for employer-based health plans.

Summary of Significant Accounting Policies

(a) Revenue Recognition - We recognize software related revenue in accordance with the provisions of Accounting Standards Codification (ASC) 985-605, Software – Revenue Recognition and non-software related revenue in accordance with ASC 605, Revenue Recognition. In general, revenue is recognized when all of the following criteria have been met:

• Persuasive evidence of an arrangement exists;

• Delivery has occurred or services have been rendered;

• Our fee is fixed or determinable; and

• Collection of the revenue is reasonably assured.

The following are our major components of revenue:

• System sales – includes the licensing of computer software, software as a service, deployment period upgrades, installation, content subscriptions, transaction processing and the sale of computer hardware and sublicensed software;

• Support, maintenance and service – includes software support and hardware maintenance, remote hosting and managed services, training, consulting and implementation services; and

• Reimbursed travel – includes reimbursable out-of-pocket expenses (primarily travel) incurred in connection with our client service activities.

We provide for several models of procurement of our information systems and related services. The predominant model involves multiple deliverables and includes a perpetual software license agreement, project-related installation services, implementation and consulting services, software support and either hosting services or computer hardware and sublicensed software, which requires that we allocate revenue to each of these elements.

Allocation of Revenue to Multiple Element Arrangements

For multiple element arrangements that contain software and non-software elements, we allocate revenue to software and

50

software-related elements as a group and any non-software element separately. After the arrangement consideration has been allocated to the non-software elements, revenue is recognized when the basic revenue recognition criteria are met for each element. For the group of software and software-related elements, revenue is recognized under the guidance applicable to software transactions.

Since we do not have vendor specific objective evidence (VSOE) of fair value on software licenses within our multiple element arrangements, we recognize revenue on our software and software-related elements using the residual method. Under the residual method, license revenue is recognized in a multiple-element arrangement when vendor-specific objective evidence of fair value exists for all of the undelivered elements in the arrangement, when software is installed and all other conditions to revenue recognition are met. We allocate revenue to each undelivered element in a multiple-element arrangement based on the element’s respective fair value, with the fair value determined by the price charged when that element is sold separately. Specifically, we determine the fair value of the software support, hardware maintenance, sublicensed software support, remote hosting, subscriptions and software as a service portions of the arrangement based on the substantive renewal price for these services charged to clients; professional services (including training and consulting) portion of the arrangement, other than installation services, based on hourly rates which we charge for these services when sold apart from a software license; and sublicensed software based on its price when sold separately from the software. The residual amount of the fee after allocating revenue to the fair value of the undelivered elements is attributed to the licenses for software solutions, including project-related installation services. If evidence of the fair value cannot be established for the undelivered elements of a license agreement using VSOE, the entire amount of revenue under the arrangement is deferred until these elements have been delivered or VSOE of fair value can be established.

We also enter into arrangements that include multiple non-software deliverables. For each element in a multiple element arrangement that does not contain software-related elements to be accounted for as a separate unit of accounting, the following must be met: the delivered products or services have value to the client on a stand-alone basis; and for an arrangement that includes a general right of return relative to the delivered products or services, delivery or performance of the undelivered product or service is considered probable and is substantially controlled by the Company. We allocate the arrangement consideration to each element based on the selling price hierarchy of VSOE of fair value, if it exists, or third-party evidence (TPE) of selling price. If neither VSOE nor TPE are available, we use estimated selling price. After the arrangement consideration has been allocated to the elements, we account for each respective element in the arrangement as described below.

For certain arrangements, revenue for software, implementation services and, in certain cases, support services for which VSOE of fair value cannot be established are accounted for as a single unit of accounting. The revenue recognized from single units of accounting are typically allocated and classified as system sales and support, maintenance and services. If available, the VSOE of fair value of the services provides the basis for support, maintenance and services allocation, and the remaining residual consideration provides the basis for system sales revenue allocations. In cases where VSOE cannot be established, revenue is classified based on the nature of related costs incurred. The following table details the classification allocations for arrangements accounted for as a single unit of accounting:

	For the Years Ended
(In millions)	2012		2011		2010
System sales	$	17.7	$	23.3	$	17.5
Support, maintenance and services	140.7		97.5		88.1

Revenue Recognition Policies for Each Element

We provide project-related installation services when licensing our software solutions, which include project-scoping services, conducting pre-installation audits and creating initial environments. We have deemed installation services to be essential to the functionality of the software and, therefore, recognize the software license over the software installation period using the percentage-of-completion method. We measure the percentage-of-completion based on output measures that reflect direct labor hours incurred, beginning at software delivery and culminating at completion of installation. Installation generally occurs in the same period the contracts are executed but in the past has been extended over a longer period of time depending on client specific factors.

We provide implementation and consulting services. These services vary depending on the scope and complexity of the engagement. Examples of such services may include database consulting, system configuration, project management, testing

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assistance, network consulting, post conversion review and application management services. Except for limited arrangements where our software requires significant modifications or customization, implementation and consulting services generally are not deemed to be essential to the functionality of the software and, thus, do not impact the timing of the software license recognition. However, if software license fees are tied to implementation milestones, then the portion of the software license fee tied to implementation milestones is deferred until the related milestone is accomplished and related fees become due and payable and non-forfeitable. Implementation fees are recognized over the service period, which may extend from nine months to three years for multi-phased projects.

Remote hosting and managed services are marketed under long-term arrangements generally over periods of five to 10 years. These services are typically provided to clients that have acquired a perpetual license for licensed software and have contracted with us to host the software in our data center. Under these arrangements, the client generally has the contractual right to take possession of the licensed software at any time during the hosting period without significant penalty and it is feasible for the client to either run the software on its own equipment or contract with another party unrelated to us to host the software. Additionally, these services are not deemed to be essential to the functionality of the licensed software or other elements of the arrangement and as such, we allocate a portion of the services fee to the software and recognize it once the client has the ability to take possession of the software. The remaining services fee in these arrangements, as well as the services fee for arrangements where the client does not have the contractual right or the ability to take possession of the software at any time, is generally recognized ratably over the hosting service period.

We also offer our solutions on a software as a service model, providing time-based licenses for our software solutions available within an environment that we manage from our data centers. The data centers provide system and administrative support as well as processing services. Revenue on these services is combined and recognized on a monthly basis over the term of the contract. We capitalize related pre-contract direct set-up costs consisting of third party costs and direct software installation and implementation costs associated with the initial set up of a software as a service client. These costs are amortized over the term of the arrangement.

Software support fees are marketed under annual and multi-year arrangements and are recognized as revenue ratably over the contractual support term. Hardware and sublicensed software maintenance revenues are recognized ratably over the contractual maintenance term.

Subscription and content fees are generally marketed under annual and multi-year agreements and are recognized ratably over the contractual terms.

Hardware and sublicensed software sales are generally recognized when title and risk of loss have transferred to the client.

The sale of equipment under sales-type leases is recorded as system sales revenue at the inception of the lease. Sales-type leases also produce financing income, which is included in system sales revenue and is recognized at consistent rates of return over the lease term.

Where we have contractually agreed to develop new or customized software code for a client as a single element arrangement, we utilize percentage-of-completion accounting, labor-hours method.

Revenue generally is recognized net of any taxes collected from clients and subsequently remitted to governmental authorities.

Payment Arrangements

Our payment arrangements with clients typically include an initial payment due upon contract signing and date-based licensed software payment terms and payments based upon delivery for services, hardware and sublicensed software. Revenue recognition on support payments received in advance of the services being performed are deferred and classified as either current or long term deferred revenue depending on whether the revenue will be earned within one year.

We have periodically provided long-term financing options to creditworthy clients through third party financing institutions and have directly provided extended payment terms to clients from contract date. These extended payment term arrangements typically provide for date based payments over periods ranging from 12 months up to seven years. As a significant portion of the fee is due beyond one year, we have analyzed our history with these types of arrangements and have concluded that we have a standard business practice of using extended payment term arrangements and a long history of successfully collecting under the original payment terms for arrangements with similar clients, product offerings, and economics without granting concessions. Accordingly, we consider the fee to be fixed and determinable in these extended payment term

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arrangements and, thus, the timing of revenue is not impacted by the existence of extended payments.

Some of these payment streams have been assigned on a non-recourse basis to third party financing institutions. We account for the assignment of these receivables as sales of financial assets. Provided all revenue recognition criteria have been met, we recognize revenue for these arrangements under our normal revenue recognition criteria, and if appropriate, net of any payment discounts from financing transactions.

(b) Cash Equivalents - Cash equivalents consist of short-term marketable securities with original maturities less than 90 days.

(c) Investments – Our short-term investments are primarily invested in time deposits, commercial paper, government and corporate bonds. Our long-term investments are primarily invested in government and corporate bonds with maturities of less than two years.

Effective April 1, 2012, we began reporting all securities in our investment portfolio as available-for-sale. The change resulted in the transfer of investments with an aggregate carrying amount of $1.0 billion from held-to-maturity to available-for-sale, with gross unrealized gains of $0.7 million and gross unrealized losses of $0.7 million. The unrealized gains and losses, net of the related tax effects, were recorded to accumulated other comprehensive income. The decision to transfer the securities to available-for-sale is intended to provide us with financial flexibility in determining whether to hold our investment securities to maturity. Such change contemplates the possibility that securities may be liquidated prior to maturity as we manage through changing market conditions.

Available-for-sale securities are recorded at fair value with the unrealized gains and losses reflected in accumulated other comprehensive income until realized. Realized gains and losses from the sale of available-for-sale securities, if any, are determined on a specific identification basis.

We regularly review investment securities for impairment based on both quantitative and qualitative criteria that include the extent to which cost exceeds fair value, the duration of any market decline, and the financial health of and specific prospects for the issuer. Unrealized losses that are other than temporary are recognized in earnings.

Premiums are amortized and discounts are accreted over the life of the security as adjustments to interest income for our investments. Interest income is recognized when earned.

Refer to Note (3) and Note (4) for further description of these assets and their fair value.

(d) Concentrations - Substantially all of our cash and cash equivalents are held at four major financial institutions. The majority of our cash equivalents consist of money market funds. Deposits held with banks may exceed the amount of insurance provided on such deposits. Generally these deposits may be redeemed upon demand.

As of the end of 2012, we had significant concentration of receivables owed to us by Fujitsu Services Limited, which are currently in dispute. Refer to Note (5) for additional information.

(e) Inventory - Inventory consists primarily of computer hardware and sublicensed software, held for resale. Inventory is recorded at the lower of cost (first-in, first-out) or market.

(f)Property and Equipment - We account for property and equipment in accordance with ASC 360, Property, Plant, and Equipment. Property, equipment and leasehold improvements are stated at cost. Depreciation of property and equipment is computed using the straight-line method over periods of one to 50 years. Amortization of leasehold improvements is computed using a straight-line method over the shorter of the lease terms or the useful lives, which range from periods of one to 15 years.

(g) Software Development Costs - Software development costs are accounted for in accordance with ASC 985-20, Costs of Software to be Sold, Leased or Marketed. Software development costs incurred internally in creating computer software products are expensed until technological feasibility has been established upon completion of a detailed program design. Thereafter, all software development costs incurred through the software’s general release date are capitalized and subsequently reported at the lower of amortized cost or net realizable value. Capitalized costs are amortized based on current and expected future revenue for each software solution with minimum annual amortization equal to the straight-line amortization over the estimated economic life of the solution. We amortize capitalized software development costs over five

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years.

(h) Goodwill - We account for goodwill under the provisions of ASC 350, Intangibles – Goodwill and Other. Goodwill is not amortized but is evaluated for impairment annually or whenever there is an impairment indicator. All goodwill is assigned to a reporting unit, where it is subject to an annual impairment assessment. Based on these evaluations, there was no impairment of goodwill in 2012, 2011 or 2010. Refer to Note (7) for more information of Goodwill and other intangible assets.

(i)Contingencies - We accrue estimates for resolution of any legal and other contingencies when losses are probable and estimable, in accordance with ASC 450, Contingencies. We currently have no material pending litigation.

The terms of our software license agreements with our clients generally provide for a limited indemnification of such clients against losses, expenses and liabilities arising from third party claims based on alleged infringement by our solutions of an intellectual property right of such third party. The terms of such indemnification often limit the scope of and remedies for such indemnification obligations and generally include a right to replace or modify an infringing solution. To date, we have not had to reimburse any of our clients for any losses related to these indemnification provisions pertaining to third party intellectual property infringement claims. For several reasons, including the lack of prior indemnification claims and the lack of a monetary liability limit for certain infringement cases under the terms of the corresponding agreements with our clients, we cannot determine the maximum amount of potential future payments, if any, related to such indemnification provisions.

From time to time we are involved in routine litigation incidental to the conduct of our business, including for example, employment disputes and litigation alleging solution defects, personal injury, intellectual property infringement, violations of law and breaches of contract and warranties. We believe that no such routine litigation currently pending against us, if adversely determined, would have a material adverse effect on our consolidated financial position, results of operations or cash flows.

(j)Derivative Instruments and Hedging Activities - We account for our hedging activities in accordance with ASC 815, Derivatives and Hedging. Historically, our use of hedging instruments has primarily been to hedge foreign currency denominated assets and liabilities. We record all hedging instruments on our consolidated balance sheets at fair value. For hedging instruments that are designated and qualify as a net investment hedge, the effective portion of the gain or loss on the hedging instrument is reported in the foreign currency translation component of other comprehensive income (loss). Any ineffective portion of the gain or loss on the hedging instrument is recorded in the results of operations immediately. Refer to Note (10) for more information on our hedging activities.

(k) Income Taxes - Income taxes are accounted for in accordance with ASC 740, Income Taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Refer to Note (12) for additional information regarding income taxes.

(l) Earnings per Common Share - Basic earnings per share (EPS) excludes dilution and is computed, in accordance with ASC 260, Earnings Per Share, by dividing income available to common shareholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in our earnings. Refer to Note (13) for additional details of our earnings per share computations.

(m) Accounting for Share-based Payments - We recognize all share-based payments to associates, directors and consultants, including grants of stock options, restricted stock and performance shares, in the financial statements as compensation cost based on their fair value on the date of grant, in accordance with ASC 718, Compensation-Stock Compensation. This compensation cost is recognized over the vesting period on a straight-line basis for the fair value of awards that actually vest. Refer to Note (14) for a detailed discussion of share-based payments.

(n) Foreign Currency - In accordance with ASC 830, Foreign Currency Matters, assets and liabilities of non-U.S. subsidiaries whose functional currency is the local currency are translated into U.S. dollars at exchange rates prevailing at the balance sheet date. Revenues and expenses are translated at average exchange rates during the year. The net exchange differences resulting from these translations are reported in accumulated other comprehensive income. Gains and losses resulting from foreign currency transactions are included in the consolidated statements of operations.

(o) Collaborative Arrangements - In accordance with ASC 808, Collaborative Arrangements, third party costs incurred and

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revenues generated by arrangements involving joint operating activities of two or more parties that are each actively involved and exposed to risks and rewards of the activities are classified in the consolidated statements of operations on a gross basis only if we are determined to be the principal participant in the arrangement. Otherwise, third party revenues and costs generated by collaborative arrangements are presented on a net basis. Payments between participants are recorded and classified based on the nature of the payments.

(p) Recently Adopted Accounting Pronouncements

Comprehensive Income. On January 1, 2012, we adopted Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) 2011-05, Presentation of Comprehensive Income. ASU 2011-05 requires an entity to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. ASU 2011-05 eliminates the option to present the components of other comprehensive income as part of the statement of changes in equity. These consolidated financial statements include separate consolidated statements of comprehensive income.

Goodwill Impairment. On January 1, 2012, we adopted FASB ASU 2011-08, Testing for Goodwill Impairment. ASU 2011-08 amends existing guidance by giving an entity the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than the carrying amount. The more-likely-than-not threshold is defined as having a likelihood of more than 50 percent. If an entity determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then it is necessary to perform the two-step goodwill impairment test, as currently prescribed by FASB Accounting Standards Codification Topic 350. Otherwise, the two-step goodwill impairment test is not required. The adoption of this standard did not have a material effect on our consolidated financial statements.

(2)Business Acquisitions

Anasazi Software, Inc.

On November 26, 2012, we completed the purchase of 100% of the outstanding stock of Anasazi Software, Inc. (Anasazi). Anasazi is a provider of behavioral health technology solutions. We believe the combination of CernerMillennium, including in-patient behavioral health, and Anasazi's community behavioral health solutions will create a more comprehensive offering in the market.

Consideration for the acquisition of Anasazi is expected to total $47.5 million consisting of up-front cash plus contingent consideration, which is payable if we achieve certain revenue milestones during 2013 from Anasazi solutions and services. We valued the contingent consideration at $1.9 million based on a probability-weighted assessment of potential contingent consideration payment scenarios.

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The acquisition of Anasazi is being treated as a purchase in accordance with ASC 805, Business Combinations, which requires allocation of the purchase price to the estimated fair values of assets and liabilities acquired in the transaction. The allocation of purchase price is based on management's judgment after evaluating several factors, including a preliminary valuation assessment. The allocation of purchase price is subject to changes as an appraisal of intangible assets and liabilities is finalized and additional information becomes available; however, we do not expect material changes. The following is a summary of the preliminary allocation of purchase price:

(In thousands)	Allocation Amount
Tangible assets and liabilities
Current assets	$	6,026
Property and equipment	798
Current liabilities	(6,605		)
Deferred income taxes, net	(6,594		)
Total net tangible liabilities	(6,375		)
Intangible assets
Customer relationships	12,829
Existing technologies	5,218
Trade names	512
Total intangible assets	18,559
Goodwill	35,281
Total purchase price	$	47,465

The fair values of the acquired intangible assets were estimated by applying the income approach. Such estimations required the use of inputs that were unobservable in the market place (Level 3), including a discount rate that we estimated would be used by a market participant in valuing these assets, projections of revenues and cash flows, and client attrition rates, among others. See Note (4) for further information about the fair value level hierarchy.

The goodwill of $35.3 million arising from the acquisition consists largely of the synergies and economies of scale, including the value of the assembled workforce, expected from combining the operations of Cerner and Anasazi. All of the goodwill was allocated to our Domestic operating segment and is not expected to be deductible for tax purposes. Identifiable intangible assets are being amortized over a weighted-average period of 12 years. The operating results of Anasazi were combined with our operating results subsequent to the purchase date of November 26, 2012. Pro-forma results of operations, assuming this acquisition was made at the beginning of the earliest period presented, have not been presented because the effect of this acquisition was not material to our results.

Clairvia, Inc.

On October 17, 2011, we purchased the net assets of Clairvia, Inc. Clairvia is a developer of health care workforce management solutions, including Care Value Management™ and Physician Scheduler™. The Care Value Management suite was integrated into our broader cloud-based and interoperability platforms, Cerner Healthe Intent and CareAware, which allows us to offer a comprehensive suite of resource management solutions.

Consideration for the acquisition of Clairvia was $38.3 million, which was paid in cash. The allocation of the purchase price to the estimated fair value of the identified tangible and intangible assets acquired and liabilities assumed resulted in goodwill of $24.6 million and $14.1 million in intangible assets, of which $6.8 million and $6.1 million was related to the value of established customer relationships and existing technologies, respectively. The goodwill was allocated to our Domestic operating segment and is expected to be deductible for tax purposes. Identifiable intangible assets are being amortized over a weighted-average period of seven years.

The operating results of Clairvia were combined with our operating results subsequent to the purchase date of October 17, 2011. Pro-forma results of operations have not been presented because the effect of this acquisition was not material to our results.

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Resource Systems, Inc.

On May 23, 2011, we completed the purchase of 100% of the outstanding common shares of Resource Systems, Inc., developer of the CareTracker^® point-of-care electronic documentation system primarily used within skilled nursing and assisted living facilities. Cerner believes that there is significant market opportunity for information technology solutions in the long-term care market as the U.S. population ages and life expectancy continues to increase.

Consideration for the acquisition of Resource Systems was $36.3 million consisting of up-front cash plus additional contingent consideration, which was payable upon the achievement of certain revenue and bookings milestones. During 2012, we paid $3.4 million to satisfy all contingent consideration obligations.

The allocation of the purchase price to the estimated fair value of the identified tangible and intangible assets acquired and liabilities assumed resulted in goodwill of $26.1 million and $18.2 million in intangible assets, of which $11.2 million and $6.4 million was related to the value of established customer relationships and existing technologies, respectively. The goodwill was allocated to our Domestic operating segment and is not expected to be deductible for tax purposes. Identifiable intangible assets are being amortized over five years.

The operating results of Resource Systems were combined with our operating results subsequent to the purchase date of May 23, 2011. Pro-forma results of operations have not been presented because the effect of this acquisition was not material to our results.

IMC Health Care, Inc.

On January 4, 2010, we completed the purchase of 100% of the outstanding common shares of IMC Health Care, Inc. (IMC), a provider of employer sponsored on-site health centers. The acquisition of IMC expanded our employer health initiatives, such as on-site employer health centers, occupational health services and wellness programs. Consideration for this transaction was $16.6 million, which was paid in cash.

The allocation of the purchase price to the estimated fair value of the identified tangible and intangible assets acquired and liabilities assumed resulted in goodwill of $11.3 million and $5.1 million in intangible assets, of which $4.1 million was related to the value of established customer relationships.

The goodwill was allocated to our Domestic operating segment and is expected to be deductible for tax purposes. Identifiable intangible assets are being amortized over five years. The operating results of IMC were combined with our operating results subsequent to the purchase date of January 4, 2010.

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(3) Investments

Available-for-sale investments at the end of 2012 were as follows:

(In thousands)	Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Cash equivalents:
Money market funds	$	68,267	$	—	$	—		$	68,267
Time deposits	24,068		—		—			24,068
Total cash equivalents	92,335		—		—			92,335
Short-term investments:
Time deposits	90,535		17		(2		)	90,550
Commercial paper	86,500		15		(57		)	86,458
Government and corporate bonds	542,236		497		(76		)	542,657
Total short-term investments	719,271		529		(135		)	719,665
Long-term investments:
Time deposits	6,190		10		(3		)	6,197
Government and corporate bonds	496,845		324		(399		)	496,770
Total long-term investments	503,035		334		(402		)	502,967
Total available-for-sale investments	$	1,314,641	$	863	$	(537	)	$	1,314,967

At December 29, 2012, we also held $6.5 million of investments reported under the cost-method of accounting.

At December 31, 2011, we held cash equivalents, short-term investments and long-term investments of $131.3 million, $531.6 million and $359.3 million, respectively. Investments at December 31, 2011 were classified as held-to-maturity and stated at amortized cost, which approximated fair value.

We sold available-for-sale investments for proceeds of $28.6 million in 2012, resulting in an insignificant gain.

(4) Fair Value Measurements

We determine fair value measurements used in our consolidated financial statements based upon the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

• Level 1 – Valuations based on quoted prices in active markets for identical assets or liabilities that the entity has the ability to access.

• Level 2 – Valuations based on quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.

• Level 3 – Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

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The following table details our financial assets measured and recorded at fair value on a recurring basis at the end of 2012:

(In thousands)
		Fair Value Measurements Using
Description	Balance Sheet Classification	Level 1		Level 2		Level 3
Money market funds	Cash equivalents	$	68,267	$	—	$	—
Time deposits	Cash equivalents	—		24,068		—
Time deposits	Short-term investments	—		90,550		—
Commercial paper	Short-term investments	—		86,458		—
Government and corporate bonds	Short-term investments	—		542,657		—
Time deposits	Long-term investments	—		6,197		—
Government and corporate bonds	Long-term investments	—		496,770		—

The following table details our financial assets measured, but not recorded, at fair value on a recurring basis at the end of 2011:

(In thousands)
		Fair Value Measurements Using
Description	Balance Sheet Classification	Level 1		Level 2		Level 3
Money market funds	Cash equivalents	$	123,919	$	—	$	—
Time deposits	Cash equivalents	—		7,358		—
Time deposits	Short-term investments	—		67,632		—
Commercial paper	Short-term investments	—		23,250		—
Government and corporate bonds	Short-term investments	—		440,753		—
Time deposits	Long-term investments	—		19,579		—
Government and corporate bonds	Long-term investments	—		337,245		—

We estimate the fair value of our long-term, fixed rate debt using a Level 3 discounted cash flow analysis based on current borrowing rates for debt with similar maturities. The fair value of our long-term debt, including current maturities, at the end of 2012 and 2011 was approximately $59.0 million and $72.6 million, respectively. The carrying amount of such fixed-rate debt at the end of 2012 and 2011 was $54.8 million and $67.5 million, respectively.

(5) Receivables

Receivables consist of accounts receivable, contracts receivable, and the current portion of amounts due under sales-type leases. Accounts receivable represent recorded revenues that have been billed. Contracts receivable represent recorded revenues that are billable by us at future dates under the terms of a contract with a client. Billings and other consideration received on contracts in excess of related revenues recognized are recorded as deferred revenue. Substantially all receivables are derived from sales and related support and maintenance and professional services of our clinical, administrative and financial information systems and solutions to health care providers located throughout the United States and in certain non-U.S. countries.

We perform ongoing credit evaluations of our clients and generally do not require collateral from our clients. We provide an allowance for estimated uncollectible accounts based on specific identification, historical experience and our judgment. Provisions for losses on uncollectible accounts for 2012, 2011, and 2010 totaled $13.5 million, $11.4 million and $9.9 million, respectively.

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A summary of net receivables is as follows:

(In thousands)	2012		2011
Gross accounts receivable	$	563,141	$	496,706
Less: Allowance for doubtful accounts	33,230		24,270
Accounts receivable, net of allowance	529,911		472,436
Contracts receivable	18,245		81,776
Current portion of lease receivables	29,692		8,997
Total receivables, net	$	577,848	$	563,209

Lease receivables represent our net investment in sales-type leases resulting from the sale of certain medical devices to our clients. The components of our net investment in sales-type leases are as follows:

(In thousands)	2012		2011
Minimum lease payments receivable	$	152,112	$	60,695
Less: Unearned income	8,206		5,347
Total lease receivables	143,906		55,348
Less: Long-term receivables included in other assets	114,214		46,351
Current portion of lease receivables	$	29,692	$	8,997

Future minimum lease payments to be received under existing sales-type leases for the next five years are as follows:

(In thousands)
2013	$	33,145
2014	36,840
2015	36,782
2016	32,477
2017	12,868

During the second quarter of 2008, Fujitsu Services Limited’s (Fujitsu) contract as the prime contractor in the National Health Service (NHS) initiative to automate clinical processes and digitize medical records in the Southern region of England was terminated by the NHS. This had the effect of automatically terminating our subcontract for the project. We are in dispute with Fujitsu regarding Fujitsu’s obligation to pay the amounts comprised of accounts receivable and contracts receivable related to that subcontract, and we are working with Fujitsu to resolve these issues based on processes provided for in the contract. Part of that process requires resolution of disputes between Fujitsu and the NHS regarding the contract termination. As of December 29, 2012, it remains unlikely that the matter will be resolved in the next 12 months. Therefore, these receivables have been classified as long-term and represent less than the majority of other long-term assets at the end of 2012 and 2011. While the ultimate collectability of the receivables pursuant to this process is uncertain, we believe that we have valid and equitable grounds for recovery of such amounts and that collection of recorded amounts is probable.

During 2012 and 2011, we received total client cash collections of $2.7 billion and $2.2 billion, respectively, of which $69.1 million and $68.2 million were received from third party arrangements with non-recourse payment assignments.

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(6) Property and Equipment

A summary of property, equipment and leasehold improvements stated at cost, less accumulated depreciation and amortization, is as follows:

(In thousands)	Depreciable Lives (Yrs)			2012		2011
Computer and communications equipment	1	—	5	$	817,186	$	741,547
Land, buildings and improvements	12	—	50	281,798		207,069
Leasehold improvements	1	—	15	146,004		163,794
Furniture and fixtures	5	—	12	63,848		61,499
Capital lease equipment	3	—	5	3,194		5,914
Other equipment	3	—	20	575		383
				1,312,605		1,180,206
Less accumulated depreciation and leasehold amortization				742,897		691,210
Total property and equipment, net				$	569,708	$	488,996

Depreciation and leasehold amortization expense for 2012, 2011 and 2010 was $120.1 million, $117.9 million and $111.4 million, respectively.

(7) Goodwill and Other Intangible Assets

The changes in the carrying amounts of goodwill were as follows:

(In thousands)	2012		2011
Beginning Balance	$	211,826	$	161,374
Goodwill recorded in connection with business acquisitions	35,281		51,100
Foreign currency translation adjustment and other	509		(648		)
Ending Balance	$	247,616	$	211,826

Our intangible assets subject to amortization are amortized on a straight-line basis, and are summarized as follows:

	2012				2011
(In thousands)	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Purchased software	$	153,330	$	67,178	$	94,963	$	55,305
Customer lists	90,376		62,403		77,513		58,259
Patents	10,877		4,562		10,298		2,997
Other	16,419		4,814		11,460		2,307
Total	$	271,002	$	138,957	$	194,234	$	118,868
Intangible assets, net			$	132,045			$	75,366

Amortization expense for 2012, 2011 and 2010 was $20.3 million, $14.7 million and $12.0 million, respectively.

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Estimated aggregate amortization expense for each of the next five years is as follows:

(In thousands)
2013	$	29,015
2014	27,315
2015	24,850
2016	20,286
2017	13,555

(8) Software Development

Information regarding our software development costs is included in the following table:

	For the Years Ended
(In thousands)	2012			2011			2010
Software development costs	$	319,828		$	290,645		$	284,836
Capitalized software development costs	(100,189		)	(82,942		)	(80,979		)
Amortization of capitalized software development costs	81,731			79,098			68,994
Total software development expense	$	301,370		$	286,801		$	272,851

Accumulated amortization as of the end of 2012 and 2011 was $703.1 million and $621.9 million, respectively.

(9) Long-term Debt and Capital Lease Obligations

The following is a summary of indebtedness outstanding:

(In thousands)	2012			2011
Note agreement, 5.54%	$	45,045		$	57,683
Senior Notes, Series B, 6.42%	9,750			9,750
Capital lease obligations	141,344			58,995
Other obligations	—			115
Total debt and capital lease obligations	196,139			126,543
Less: current portion	(59,582		)	(39,722		)
Long-term debt and capital lease obligations	$	136,557		$	86,821

In November 2005, we completed a £65.0 million unsecured private placement of debt at 5.54% pursuant to a Note Agreement. The Note Agreement is payable in seven equal annual installments, which commenced November 2009. The proceeds were used to repay the outstanding amount under our credit facility and for general corporate purposes. The Note Agreement contains certain net worth and fixed charge coverage covenants and provides certain restrictions on our ability to borrow, incur liens, sell assets and pay dividends. We were in compliance with all covenants at the end of 2012.

In December 2002, we completed a $60.0 million unsecured private placement of debt pursuant to a Note Agreement. The Series A Senior Notes, with a $21.0 million principal amount at 5.57% were paid in full in 2008. The Series B Senior Notes, with a $39.0 million principal amount at 6.42%, are payable in four equal annual installments, which commenced December 2009. The proceeds were used to repay the outstanding amount under our credit facility and for general corporate purposes. The Note Agreement contains certain net worth and fixed charge coverage covenants and provides certain restrictions on our ability to borrow, incur liens, sell assets and pay dividends. We were in compliance with all covenants at the end of 2012. On December 31, 2012, we made the final installment payment, repaying the Series B Senior Notes in full.

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Minimum annual payments under existing capital lease obligations and maturities of indebtedness at the end of 2012 are as follows:

	Capital Lease Obligations
(In thousands)	Minimum Lease Payments		Less: Interest		Principal		Principal Amount of Indebtedness		Total
2013	$	38,717	$	3,900	$	34,817	$	24,765	$	59,582
2014	35,715		2,855		32,860		15,015		47,875
2015	33,792		1,767		32,025		15,015		47,040
2016	30,803		589		30,214		—		30,214
2017	11,522		94		11,428		—		11,428
Total	$	150,549	$	9,205	$	141,344	$	54,795	$	196,139

We maintain a $100.0 million multi-year revolving credit facility, which expires in February 2017. The facility provides an unsecured revolving line of credit for working capital purposes, along with a letter of credit facility. Interest is payable at a rate based on prime, LIBOR, or the U.S. federal funds rate, plus a spread that varies depending on the leverage ratios maintained. The agreement provides certain restrictions on our ability to borrow, incur liens, sell assets and pay dividends and contains certain cash flow and liquidity covenants. As of the end of 2012, we were in compliance with all debt covenants. As of the end of 2012, we had no outstanding borrowings under this agreement; however, we had $14.3 million of outstanding letters of credit, which reduced our available borrowing capacity to $85.7 million.

(10) Hedging Activities

We designated all of our Great Britain Pound (GBP) denominated long-term debt as a net investment hedge of our U.K. operations. The objective of the hedge is to reduce our foreign currency exposure in our U.K. subsidiary investment. Changes in the exchange rate between the United States Dollar (USD) and GBP, related to the notional amount of the hedge, are recognized as a component of other comprehensive income (loss), to the extent the hedge is effective. The following tables represent the fair value of our net investment hedge included within the consolidated balance sheets and the related unrealized gain or loss, net of related income tax effects, on the net investment hedge recognized in comprehensive income:

(In thousands)		2012
Derivatives Designated	Balance Sheet Classification	Fair Value		Net Unrealized Loss
Net investment hedge	Short-term liabilities	$	15,015	$	451
Net investment hedge	Long-term liabilities	30,030		981
Total net investment hedge		$	45,045	$	1,432

(In thousands)		2011
Derivatives Designated	Balance Sheet Classification	Fair Value		Net Unrealized Loss
Net investment hedge	Short-term liabilities	$	14,421	$	133
Net investment hedge	Long-term liabilities	43,262		1,381
Total net investment hedge		$	57,683	$	1,514

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(11) Other Income

A summary of other income is as follows:

	For the Years Ended
(In thousands)	2012			2011			2010
Interest income	$	16,543		$	15,191		$	10,347
Interest expense	(5,068		)	(5,341		)	(6,908		)
Other	4,571			46			(560		)
Other income, net	$	16,046		$	9,896		$	2,879

Other income in 2012 includes a $4.5 million gain recognized on the disposition of one of our cost-method investments.

(12) Income Taxes

Income tax expense (benefit) for 2012, 2011 and 2010 consists of the following:

	For the Years Ended
(In thousands)	2012			2011			2010
Current:
Federal	$	164,690		$	162,288		$	85,106
State	13,302			19,061			10,355
Foreign	4,142			3,831			(883		)
Total current expense	182,134			185,180			94,578
Deferred:
Federal	9,035			(15,927		)	22,297
State	4,453			(5,410		)	4,038
Foreign	(5,146		)	(776		)	4,027
Total deferred expense (benefit)	8,342			(22,113		)	30,362
Total income tax expense	$	190,476		$	163,067		$	124,940

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Temporary differences between the financial statement carrying amounts and tax basis of assets and liabilities that give rise to significant portions of deferred income taxes at the end of 2012 and 2011 relate to the following:

(In thousands)	2012			2011
Deferred tax assets:
Accrued expenses	$	20,346		$	18,597
Separate return net operating losses	21,412			16,757
Share based compensation	35,323			26,462
Contract and service revenues and costs	17,339			25,022
Other	6,890			5,410
Total deferred tax assets	101,310			92,248
Deferred tax liabilities:
Software development costs	(101,393		)	(91,267		)
Depreciation and amortization	(96,695		)	(85,746		)
Other	(5,537		)	(4,029		)
Total deferred tax liabilities	(203,625		)	(181,042		)
Net deferred tax liability	$	(102,315	)	$	(88,794	)

At the end of 2012, we had net operating loss carry-forwards subject to Section 382 of the Internal Revenue Code for Federal income tax purposes of $7.4 million that are available to offset future Federal taxable income, if any, through 2020. We had net operating loss carry-forwards from non-U.S. jurisdictions of $0.9 million that are available to offset future taxable income, if any, through 2024 and $59.8 million that are available to offset future taxable income, if any, with no expiration. In addition, we had a deferred tax asset for state net operating loss carryforwards of $0.9 million which are available to offset future taxable income, if any, through 2032. We expect to fully realize all these net operating loss carry-forwards in future periods.

At the end of 2012, we had not provided tax on the cumulative undistributed earnings of our foreign subsidiaries of approximately $82 million, because it is our intention to reinvest these earnings indefinitely. If these earnings were distributed, we would be subject to U.S. taxes and foreign withholding taxes, net of U.S. foreign tax credits which may be available. The calculation of this unrecognized deferred tax liability is complex and not practicable.

The effective income tax rates for 2012, 2011, and 2010 were 32%, 35%, and 34%, respectively. These effective rates differ from the Federal statutory rate of 35% as follows:

	For the Years Ended
(In thousands)	2012			2011			2010
Tax expense at statutory rates	$	205,698		$	164,393		$	126,744
State income tax, net of federal benefit	13,856			11,439			10,151
Tax credits	(1,510		)	(5,520		)	(10,568		)
Unrecognized tax benefit (including interest)	(12,832		)	102			7,501
Permanent differences	(19,900		)	(2,472		)	(4,629		)
Other, net	5,164			(4,875		)	(4,259		)
Total income tax expense	$	190,476		$	163,067		$	124,940

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A reconciliation of the beginning and ending amount of unrecognized tax benefit is presented below:

(In thousands)	2012			2011		2010
Unrecognized tax benefit - beginning balance	$	14,640		$	14,100	$	6,599
Gross increases (decreases) - tax positions in prior periods	(12,464		)	540		—
Gross increases - current-period tax positions	—			—		7,501
Unrecognized tax benefit - ending balance	$	2,176		$	14,640	$	14,100

All of the unrecognized tax benefit will favorably impact our effective tax rate if recognized. We do not expect to recognize any material portion of our unrecognized tax benefits in the next 12 months. Our federal returns have been examined by the Internal Revenue Service through 2009. We have various state and foreign returns under examination.

The 2012 beginning and ending amounts of accrued interest related to unrecognized tax benefits were $0.9 million and $0.1 million, respectively. We classify interest and penalties as income tax expense in our consolidated statement of operations. No accrual for tax penalties was recorded at the end of the year.

(13) Earnings Per Share

A reconciliation of the numerators and the denominators of the basic and diluted per share computations are as follows:

	2012					2011					2010
	Earnings		Shares	Per-Share		Earnings		Shares	Per-Share		Earnings		Shares	Per-Share
(In thousands, except per share data)	(Numerator)		(Denominator)	Amount		(Numerator)		(Denominator)	Amount		(Numerator)		(Denominator)	Amount
Basic earnings per share:
Income available to common shareholders	$	397,232	170,931	$	2.32	$	306,627	168,634	$	1.82	$	237,272	164,916	$	1.44
Effect of dilutive securities:
Stock options and non-vested shares	—		4,766			—		5,233			—		5,931
Diluted earnings per share:
Income available to common shareholders including assumed conversions	$	397,232	175,697	$	2.26	$	306,627	173,867	$	1.76	$	237,272	170,847	$	1.39

Options to purchase 2.3 million, 2.1 million and 1.2 million shares of common stock at per share prices ranging from $55.24 to $85.96, $39.36 to $68.45 and $29.11 to $45.96, were outstanding at the end of 2012, 2011 and 2010, respectively, but were not included in the computation of diluted earnings per share because they were anti-dilutive.

(14) Share-Based Compensation and Equity

Stock Option and Equity Plans

As of the end of 2012, we had five fixed stock option and equity plans in effect for associates and directors. This includes one plan from which we could issue grants, the Cerner Corporation 2011 Omnibus Equity Incentive Plan (the Omnibus Plan); and four plans from which no new grants are permitted, but some awards remain outstanding (Plans D, E, F, and G).

Awards under the Omnibus Plan may consist of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units, performance grants and bonus shares. At the end of 2012, 7.7 million shares remain available for awards. Stock options granted under the Omnibus Plan are exercisable at a price not less than fair market value on the date of grant. Stock options under the Omnibus Plan typically vest over a period of five years and are exercisable for periods of up to 10 years.

Stock Options

The fair market value of each stock option award is estimated on the date of grant using a lattice option-pricing model. The pricing model requires the use of the following estimates and assumptions:

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• Expected volatilities under the lattice model are based on an equal weighting of implied volatilities from traded options on our shares and historical volatility. We use historical data to estimate the stock option exercise and associate departure behavior used in the lattice model; groups of associates (executives and non-executives) that have similar historical behavior are considered separately for valuation purposes.

• The expected term of stock options granted is derived from the output of the lattice model and represents the period of time that stock options granted are expected to be outstanding.

• The risk-free rate is based on the zero-coupon U.S. Treasury bond with a term equal to the contractual term of the awards.

The weighted-average assumptions used to estimate the fair market value of stock options are as follows:

	2012		2011		2010
Expected volatility (%)	34.8	%	36.5	%	40.9	%
Expected term (yrs)	9.1		8.6		9.5
Risk-free rate (%)	2.1	%	2.2	%	2.9	%

Stock option activity for 2012 was as follows:

(In thousands, except per share data)	Number of Shares		Weighted- Average Exercise  Price		Aggregate Intrinsic  Value		Weighted-Average       Remaining       Contractual  Term (Yrs)
Outstanding at beginning of year	12,909		$	23.78
Granted	1,931		81.00
Exercised	(2,521	)	15.87
Forfeited and expired	(283	)	51.27
Outstanding at end of year	12,036		33.97		$	516,168	6.35
Exercisable at end of year	7,265		$	17.72	$	423,982	5.13

	For the Years Ended
(In thousands, except for grant date fair values)	2012		2011		2010
Weighted-average grant date fair values	$	37.04	$	28.89	$	22.42
Total intrinsic value of options exercised	$	152,117	$	117,601	$	88,876
Cash received from exercise of stock options	38,147		38,900		34,724
Tax benefit realized upon exercise of stock options	55,952		44,908		33,802

As of the end of 2012, there was $99.3 million of total unrecognized compensation cost related to stock options granted under all plans. That cost is expected to be recognized over a weighted-average period of 3.20 years.

Non-vested Shares

Non-vested shares are valued at fair market value on the date of grant and will vest provided the recipient has continuously served on the Board of Directors through such vesting date or, in the case of an associate, provided that performance measures are attained. The expense associated with these grants is recognized over the period from the date of grant to the vesting date, when achievement of the performance condition is deemed probable.

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Non-vested share activity for 2012 was as follows:

(In thousands, except per share data)	Number of Shares		Weighted-Average Grant Date Fair Value
Outstanding at beginning of year	254		$	47.75
Granted	99		76.55
Vested	(52	)	50.24
Forfeited	—		—
Outstanding at end of year	301		$	56.82

	For the Years Ended
(In thousands, except for grant date fair values)	2012		2011		2010
Weighted average grant date fair values for shares granted during the year	$	76.55	$	54.07	$	41.09
Total fair value of shares vested during the year	$	2,612	$	2,527	$	1,147

As of the end of 2012, there was $8.5 million of total unrecognized compensation cost related to non-vested share awards granted under all plans. That cost is expected to be recognized over a weighted-average period of 1.31 years.

Associate Stock Purchase Plan

We established an Associate Stock Purchase Plan (ASPP) in 2001, which qualifies under Section 423 of the Internal Revenue Code. Each individual employed by us and associates of our United States based subsidiaries, except as provided below, are eligible to participate in the Plan (Participants). The following individuals are excluded from participation: (a) persons who, as of the beginning of a purchase period under the Plan, have been continuously employed by us or our domestic subsidiaries for less than two weeks; (b) persons who, as of the beginning of a purchase period, own directly or indirectly, or hold options or rights to acquire under any agreement or Company plan, an aggregate of 5% or more of the total combined voting power or value of all outstanding shares of all classes of Company Common Stock; and, (c) persons who are customarily employed by us for less than 20 hours per week or for less than five months in any calendar year. Participants may elect to make contributions from 1% to 20% of compensation to the ASPP, subject to annual limitations determined by the Internal Revenue Service. Participants may purchase Company Common Stock at a 15% discount on the last business day of the option period. The purchase of our Common Stock is made through the ASPP on the open market and subsequently reissued to the associates. The difference of the open market purchase and the participant’s purchase price is being recognized as compensation expense.

Share Based Compensation Cost

Our stock option and non-vested share awards qualify for equity classification. The costs of our ASPP, along with participant contributions, are recorded as a liability until open market purchases are completed. The amounts recognized in the consolidated statements of operations with respect to stock options, non-vested shares and ASPP are as follows:

	For the Years Ended
(In thousands)	2012			2011			2010
Stock option and non-vested share compensation expense	$	36,113		$	27,919		$	23,723
Associate stock purchase plan expense	2,859			2,180			1,692
Amounts capitalized in software development costs, net of amortization	(860		)	(620		)	(512		)
Amounts charged against earnings, before income tax benefit	$	38,112		$	29,479		$	24,903
Amount of related income tax benefit recognized in earnings	$	14,578		$	11,256		$	9,329

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Preferred Stock

As of the end of 2012 and 2011, we had 1.0 million shares of authorized but unissued preferred stock, $0.01 par value.

(15) Foundations Retirement Plan

The Cerner Corporation Foundations Retirement Plan (the Plan) was established under Section 401(k) of the Internal Revenue Code. All associates age 18 and older and who are not a member of an excluded class are eligible to participate. Participants may elect to make pretax contributions from 1% to 80% of eligible compensation to the Plan, subject to annual limitations determined by the Internal Revenue Service. Participants may direct contributions into mutual funds, a stable value fund, a Company stock fund, or a self-directed brokerage account. We have a first tier discretionary match that is made on behalf of participants in an amount equal to 33% of the first 6% of the participant’s salary contribution. Our first tier discretionary match expenses for the Plan amounted to $12.3 million, $10.5 million and $8.9 million for 2012, 2011 and 2010, respectively.

We added a second tier discretionary match to the Plan in 2000. Contributions are based on attainment of established earnings per share goals for the year or the established financial metric for the Plan. Only participants who defer 2% of their paid base salary, are actively employed as of the last day of the Plan year and are employed before October 1st of the Plan year are eligible to receive the discretionary match contribution. For the years ended 2012, 2011 and 2010 we expensed $11.9 million, $10.5 million and $8.9 million for the second tier discretionary distributions, respectively.

(16) Related Party Transactions

During 2009, as part of our long-term space planning analysis, we determined that we would require additional office space for associates to accommodate our anticipated growth. We evaluated various sites in the Kansas City metropolitan area and negotiated with several different governmental entities regarding available incentives. Upon completion of this review, we decided to proceed with an office development in Wyandotte County, Kansas, which is part of the “Village West” development. In order to maximize available incentives, we agreed to pursue the Village West office development in conjunction with the development of an 18,000 seat, multi-sport stadium and related recreational athletic complex.

The Village West stadium complex was developed by Kansas Unified Development, LLC (the “Developer”), an entity controlled by Neal Patterson, Chairman of the Board of Directors, Chief Executive Officer and President of Cerner Corporation, and Clifford Illig, Vice Chairman of the Board of Directors of Cerner Corporation. Sporting Kansas City (“Sporting KC”) is the principal tenant of the stadium complex. OnGoal LLC (“OnGoal”), the owner of the Sporting KC professional soccer club, is also controlled by Messrs. Patterson and Illig.

The total construction and development cost of the office complex has been estimated to be approximately $170.0 million. The Company currentlybelieves it will receive incentives totaling approximately $82.0 million from the Developer, the Unified Government of Wyandotte County/Kansas City, Kansas (the “Unified Government”) and the Kansas Department of Commerce. Incentives from the Kansas Department of Commerce will include cash grants, tax exemptions and tax credits. The value of some of these incentives may ultimately increase or decrease depending upon the final capital invested and the number of new jobs created. We currently expect our net investment in the Village West office complex, after applying expected government incentives and payments from the Developer, to be approximately $88.0 million.

In connection with the Village West office complex development and the related incentives, we have entered into three agreements:

• Land Transfer and Specific Venture Agreement (the “Land Transfer Agreement”) dated January 19, 2010 with the Unified Government and the Developer,

• Workforce Services Training Agreement (the “Workforce Agreement”) dated January 20, 2010 with the Kansas Department of Commerce, as amended by the First Amendment to Workforce Services Training Agreement dated June 7, 2011, and

• Interparty Agreement dated January 19, 2010 with OnGoal and the Developer.

Pursuant to the Land Transfer Agreement, we acquired the land from the Unified Government with certain contingencies upon which the office complex is being constructed. The purchase price, equal to the site’s fair market value, is being paid by the Developer. In the second quarter of 2012, vertical construction began on the Village West office development. In connection with the commencement of vertical construction, contingencies were resolved and we recorded land contributed to the Company from the Unified Government at its appraisal value.

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Pursuant to the Workforce Agreement, as amended, we agreed to establish positions for 4,500 employees with an average annual wage of at least $31.00 per hour. In consideration of this commitment, we have elected to receive up to $48.5 million from the Kansas Department of Commerce for project investment costs and employee training (the “IMPACT Award”). We can specify the date when the IMPACT Award will be distributed by the Kansas Department of Commerce, which must be by December 31, 2014. The State of Kansas has issued bonds in order to fund these incentives to us and has incurred costs of issuance and debt service obligations. We may be obligated to repay the Kansas Department of Commerce under the following circumstances:

• If we do not request distribution of all or part of the IMPACT Award, we must pay $64.9 million (which represents the Impact Award amount plus the state’s estimated issuance costs)(the “Gross Funded Amount”) less an amount equal to any IMPACT Award amount not received,

• If we fail to establish new jobs for at least 4,275 full time employees at the Village West office complex prior to December 31, 2017, we will repay an amount equal to $48.0 million multiplied by the shortfall of total new jobs created by us, which is 4,500 less the number of jobs created as of December 31, 2017, divided by 4,500 (the “MPI Repayment Amount”), and

• If we have not generated aggregate Kansas state tax withholdings from wages earned by new jobs at the Village West office complex of at least the Gross Funded Amount within 10 years after receiving the IMPACT Award, then we will repay the difference (the “Withholding Tax Repayment Amount”).

The MPI Repayment Amount is not due until 10 years after we first receive the IMPACT Award. Our total repayment obligations under the Workforce Agreement will not exceed the Withholding Tax Repayment Amount.

The Interparty Agreement provides that the Developer and OnGoal will be responsible for the repayment of any issuance costs plus the MPI Repayment Amount owed by us under the Workforce Agreement. The Developer and OnGoal will also indemnify and hold us harmless from and against any and all losses, costs, expenses, penalties and damages arising as a result of: a) the Developer’s failure to pay any sum that it has agreed to pay, or b) the Developer’s breach of any agreement with us which creates an obligation on our part for which the Developer has agreed to be responsible.

The Interparty Agreement further provides that the Developer or OnGoal will pay us a success fee of $4.0 million if the terms and conditions of the Workforce Agreement are satisfied so that no MPI Repayment Amounts or issuance costs are due by the Developer under the Workforce Agreement.

Pursuant to the Multi-Sport Stadium Specific Venture Agreement, the Developer, recognizing that the Unified Government relied on our jobs creation goals in its decision to provide incentives for the stadium complex, agreed to make ten annual “Office Payment Installments” to the Unified Government, each in the amount of approximately $3.0 million, commencing in 2017. The Office Payment Installments are intended to supplement the purchase prices paid to the Unified Government by the Developer for the stadium site and the office site. The Office Payment Installments may be reduced if the Developer meets certain conditions and if we commence construction of the office complex and meet the job creation goals.

We believe that the amount of government incentives that the Developer and OnGoal received, as well as the government incentives received by us, were materially increased due to the fact that we agreed to build our office complex in close proximity to the stadium complex. The independent members of our Board of Directors, acting as a committee, reviewed and unanimously approved the decision to proceed with the development of the Village West office complex in 2009. The independent Directors received advice from outside legal counsel, retained a consultant with real estate expertise regarding the transaction and were briefed on the structure of the various expansion options by members of management (other than Messrs. Patterson and Illig) at six separate meetings.

We entered into a Construction Coordinator Agreement dated January 20, 2012, as amended by Amendment No. 1 to the Construction Coordinator Agreement dated May 31, 2012, with GRAND Construction, LLC (“Coordinator”), a limited liability company owned in part by an entity controlled by Messrs. Patterson and Illig, to coordinate, supervise, schedule and assist with managing the development, design and construction of the Cerner Phase 1 and 2 Buildings and site at the Village West development. Under the agreement, we will pay Coordinator 2% of the total cost of the project (as specified in the agreement). We paid Coordinator $1.4 million in 2012. Based on management’s projected scope of services, it is anticipated that the total fees will be approximately $3.2 million, and paid over two years through April 2014. The independent members of the Company’s Board of Directors, acting as a committee, reviewed and unanimously approved the Construction Coordinator Agreement dated January 20, 2012.

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Additionally, in June 2012, the Company entered into an agreement with Coordinator for a separate project to make improvements to a parking facility for future use by one of our office campuses. That project is complete, and we paid Coordinator $0.3 million.

(17) Commitments

Leases

We are committed under operating leases primarily for office and data center space and computer equipment through October 2027. Rent expense for office and warehouse space for our regional and global offices for 2012, 2011 and 2010 was $18.1 million, $17.6 million and $20.5 million, respectively. Aggregate minimum future payments under these non-cancelable operating leases are as follows:

(In thousands)	Operating Lease Obligations
2013	$	24,943
2014	22,843
2015	16,803
2016	12,210
2017	11,911
2018 and thereafter	40,133
	$	128,843

Purchase Obligations

We have purchase commitments with various vendors through 2019. These commitments represent non-cancellable commitments primarily to provide ongoing support, maintenance and service to our clients. Aggregate future payments under these commitments are as follows:

(In thousands)	Purchase Obligations
2013	$	39,654
2014	33,052
2015	12,721
2016	2,594
2017	2,184
2018 and thereafter	4,000
	$	94,205

(18) Segment Reporting

We have 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, devices and sublicensed software purchased from 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. “Other” includes expenses that have not been allocated to the operating segments, such as software development, marketing, general and administrative, share-based compensation expense and depreciation. Performance of the segments is assessed at the operating earnings level and, therefore, the segment operations have been presented as such. Items such as interest, income taxes, capital expenditures and total assets are managed at the consolidated level and thus are not included in our operating segment

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disclosures.

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 our operating segments and other expense for 2012, 2011 and 2010:

(In thousands)	Domestic		Global		Other			Total
2012
Revenues	$	2,341,304	$	324,132	$	—		$	2,665,436
Cost of revenues	548,813		59,384		—			608,197
Operating expenses	506,249		131,580		847,748			1,485,577
Total costs and expenses	1,055,062		190,964		847,748			2,093,774
Operating earnings (loss)	$	1,286,242	$	133,168	$	(847,748	)	$	571,662

(In thousands)	Domestic		Global		Other			Total
2011
Revenues	$	1,894,454	$	308,699	$	—		$	2,203,153
Cost of revenues	387,466		54,206		—			441,672
Operating expenses	439,465		126,997		735,221			1,301,683
Total costs and expenses	826,931		181,203		735,221			1,743,355
Operating earnings (loss)	$	1,067,523	$	127,496	$	(735,221	)	$	459,798

(In thousands)	Domestic		Global		Other			Total
2010
Revenues	$	1,562,563	$	287,659	$	—		$	1,850,222
Cost of revenues	272,385		47,971		—			320,356
Operating expenses	417,181		124,546		628,806			1,170,533
Total costs and expenses	689,566		172,517		628,806			1,490,889
Operating earnings (loss)	$	872,997	$	115,142	$	(628,806	)	$	359,333

(19) Quarterly Results (unaudited)

Selected quarterly financial data for 2012 and 2011 is set forth below:

(In thousands, except per share data)	Revenues		Earnings Before Income Taxes		Net Earnings		Basic Earnings Per Share		Diluted Earnings Per Share
2012 quarterly results:
First Quarter	$	641,212	$	130,063	$	88,708	$	0.52	$	0.51
Second Quarter	637,358		138,897		97,829		0.57		0.56
Third Quarter	676,482		151,047		98,887		0.58		0.56
Fourth Quarter	710,384		167,701		111,808		0.65		0.63
Total	$	2,665,436	$	587,708	$	397,232

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(In thousands, except per share data)	Revenues		Earnings Before Income Taxes		Net Earnings		Basic Earnings Per Share		Diluted Earnings Per Share
2011 quarterly results:
First Quarter	$	491,664	$	95,710	$	64,556	$	0.38	$	0.37
Second Quarter	524,223		110,853		72,044		0.43		0.42
Third Quarter	571,640		123,167		78,835		0.47		0.45
Fourth Quarter	615,626		139,964		91,192		0.54		0.52
Total	$	2,203,153	$	469,694	$	306,627

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Schedule II

CERNER CORPORATION

VALUATION AND QUALIFYING ACCOUNTS

For the years ended December 29, 2012, December 31, 2011 and January 1, 2011

(In thousands)	Balance at Beginning of Period		Additions Charged to Costs and Expenses	Additions Through Acquisitions and Consolidation of Variable Interest Entity	Deductions		Balance at End of Period
Description
2010
Doubtful Accounts and Sale Allowances	$	16,895	9,856	—	(11,201	)	$	15,550
2011
Doubtful Accounts and Sale Allowances	$	15,550	11,365	31	(2,676	)	$	24,270
2012
Doubtful Accounts and Sale Allowances	$	24,270	13,483	8	(4,531	)	$	33,230

See accompanying report of independent registered public accounting firm.

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Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders

Cerner Corporation:

Under date of February 8, 2013, we reported on the consolidated balance sheets of Cerner Corporation and subsidiaries (collectively, the Corporation) as of December 29, 2012 and December 31, 2011, and the related consolidated statements of operations, comprehensive income, changes in shareholders’ equity, and cash flows for each of the years in the three-year period ended December 29, 2012, which are included in the Corporation’s 2012 Annual Report on Form 10-K. In connection with our audits of the aforementioned consolidated financial statements, we also audited the related consolidated financial statement schedule noted as Schedule II under Item 15(a)(2). This consolidated financial statement schedule is the responsibility of the Corporation’s management. Our responsibility is to express an opinion on this financial statement schedule based on our audits.

In our opinion, this financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.

/s/KPMG LLP

Kansas City, Missouri

February 8, 2013

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EX-4.(C)

Exhibit 4(c)

FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

This First Amendment to Amended and Restated Credit Agreement (this “Amendment”) is made as of December 28, 2012, by and among CERNER CORPORATION, a Delaware corporation (the “Borrower”); U.S. BANK NATIONAL ASSOCIATION, a national banking association, COMMERCE BANK, a Missouri banking corporation, UMB BANK, N.A., a national banking association, BANK OF AMERICA, N.A., a national banking association, and RBS CITIZENS, N.A., a national banking association (each a “Bank” and, collectively, the “Banks”); BANK OF AMERICA, N.A., a national banking association, as Documentation Agent (in such capacity, the “Documentation Agent”); U.S. BANK NATIONAL ASSOCIATION, as the lender for Swingline Loans (in such capacity, the “Swingline Lender”), and U.S. BANK NATIONAL ASSOCIATION, as agent for the Banks hereunder (in such capacity, the “Administrative Agent” or “Agent”), as lead arranger hereunder (in such capacity, the “Lead Arranger”) and as sole book runner. Capitalized terms used and not defined in this Amendment have the meanings given to them in the Credit Agreement referred to below.

Preliminary Statements

(a)The Banks and the Borrower are parties to an Amended and Restated Credit Agreement dated as of February 10, 2012 (as the same may be amended, renewed, restated, replaced, consolidated or otherwise modified from time to time, the “Credit Agreement”).

(b)The Borrower has requested certain modifications to the terms of the Credit Agreement as set forth in this Amendment.

(c)The Banks are willing to agree to the requested modifications, subject, however, to the terms, conditions and agreements set forth below.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1.Modification to Section 1.1 -- Definition of “Guarantor Subsidiary.” The definition of “Guarantor Subsidiary” contained in Section 1.1 of the Credit Agreement is deleted and is replaced in its entirety with the following:

“Guarantor Subsidiary” shall mean Cerner Properties, Inc., Cerner International, Inc., Cerner Multum, Inc., Cerner Health Connections, Inc., Cerner Healthcare Solutions, Inc., Cerner Innovation, Inc., The Health Exchange, Inc., and each existing and future Subsidiary of the Borrower which is or becomes a Guarantor Subsidiary pursuant to the terms of Section 6.9 other than the Foreign Subsidiaries, other than the Immaterial Subsidiaries and other than Cerner Chouteau Data Center, Inc.

2.Modification to Section 6.1(j) -- Information. Section 6.1(j) of the Credit Agreement is deleted and is replaced in its entirety with the following:

(j) as soon as available and in any event within 120 days after the end of each fiscal year of the Borrower, an unaudited balance sheet and income statement for the fiscal year setting forth the relevant financial information for each individual Subsidiary of Borrower

referenced in the definition of “Immaterial Subsidiary” set forth in Section 6.9(b) of this Agreement;

3.Modification to Section 6.9(b)(3)(B) -- Threshold Amount. Section 6.9(b)(3)(B) of the Credit Agreement is deleted and is replaced in its entirety with the following:

(B) when two or more Immaterial Subsidiaries have, in the aggregate, (1) total assets (as determined in accordance with GAAP) that exceed 5% of the Consolidated Total Assets (as determined in accordance with GAAP) or (2) EBITDA (as determined in accordance with GAAP) in excess of 5% of Consolidated EBITDA (as determined in accordance with GAAP) (each of (1) and (2) are referred to herein as a “Threshold Amount”), in which case such number of Subsidiaries deemed Immaterial Subsidiaries immediately prior to the determination that the Threshold Amount has been exceeded (such Subsidiaries to be selected by the Borrower in its sole discretion) must become party to the Subsidiary Guaranty (and thereafter be deemed Guarantor Subsidiaries) as would cause the aggregate total assets or EBITDA of the remaining non-Guarantor, non-Foreign Subsidiaries to remain at or below the Threshold Amount. Calculations shall be performed annually based on the information provided by Borrower in accordance with Section 6.1(j).

4.Modification to Section 6.9(b) -- “Immaterial Subsidiary.” The definition of “Immaterial Subsidiary” set forth in the third to last paragraph of Section 6.9(b) is deleted and is replaced in its entirety with the following:

For purposes hereof, “Immaterial Subsidiary” means a Subsidiary (other than any Subsidiary which is a Guarantor Subsidiary as of December 28, 2012 or which is excluded under the definition of Guarantor Subsidiary), which either: (a) has total assets (as determined in accordance with GAAP) that equal less than 5% of Consolidated Total Assets (as determined in accordance with GAAP), or (b) has an EBITDA (as determined in accordance with GAAP) that equals less than 5% of Consolidated EBITDA. The parties acknowledge and agree that at no time shall any Subsidiary that is a Guarantor Subsidiary as of December 28, 2012 be deemed to be an “Immaterial Subsidiary” that is released from liability under the Guaranty, and that the Guarantor Subsidiaries as of December 28, 2012 are the following entities: (1) Cerner Properties, Inc. (2) Cerner International, Inc., (3) Cerner Multum, Inc., (4) Cerner Health Connections, Inc., (5) Cerner Healthcare Solutions, Inc., (6) Cerner Innovation, Inc., and (7) The Health Exchange, Inc. Calculations shall be performed annually based on the information provided by Borrower in accordance with Section 6.1(j).

5.Replacement of Schedule 5.12. Schedule 5.12 of the Credit Agreement is deleted and is replaced in its entirety with Schedule 5.12 attached hereto.

6.Reaffirmation of Credit Documents. The Borrower reaffirms its obligations under the Credit Agreement, as amended hereby, and the other Credit Documents to which it is a party or by which it is bound, and represents, warrants and covenants to the Agent and the Banks, as a material inducement to the Agent and each Bank to enter into this Amendment, that (a) the Borrower has no and in any event waives any, defense, claim or right of setoff with respect to its obligations under, or in any other way relating to, the Credit Agreement, as amended hereby, or any of the other Credit Documents to which it is a party, or the Agent’s or any Bank’s actions or inactions in respect of any of the foregoing, and (b) all representations

First Amendment to Amended and Restated Credit Agreement –Page 2

and warranties made by or on behalf of the Borrower in the Credit Agreement and the other Credit Documents are true and complete on the date hereof as if made on the date hereof.

7.Conditions Precedent to Amendment. Except to the extent waived in a writing signed by the Administrative Agent and delivered to the Borrower, the Administrative Agent and the Banks shall have no duties under this Amendment until the Administrative Agent shall have received fully executed originals of each of the following, each in form and substance satisfactory to the Administrative Agent:

(a)Amendment. This Amendment;

(b)Secretary’s Certificate. A certificate from the Secretary or Assistant Secretary of the Borrower certifying to the Administrative Agent that, among other things, (i) attached thereto as an exhibit is a true and correct copy of the resolutions of the board of directors of the Borrower authorizing the Borrower to enter into the transactions described in this Amendment and the execution, delivery and performance by the Borrower of any documents related to this Amendment, (ii)  the articles of incorporation and by-laws of the Borrower attached thereto are in full force and effect and have not been amended or otherwise modified or revoked, and (iii) attached thereto as exhibits are certificates of good standing, each of recent date, from the Secretary of State of Delaware and the Secretary of State of Missouri, certifying the good standing and authority of the Borrower in such states as of such dates; and

(c)Other Documents. Such other documents as the Administrative Agent may reasonably request to further implement the provisions of this Amendment or the transactions contemplated hereby.

8.No Other Amendments; No Waiver of Default. Except as amended hereby, the Credit Agreement and the other Credit Documents shall remain in full force and effect and be binding on the parties in accordance with their respective terms. By entering into this Amendment, the Administrative Agent and the Banks are not waiving any Default or Event of Default which may exist on the date hereof.

9.Expenses. The Borrower agrees to pay and reimburse the Administrative Agent and/or the Banks for all out-of-pocket costs and expenses incurred in connection with the negotiation, preparation, execution, delivery, operation, enforcement and administration of this Amendment, including the reasonable fees and expenses of counsel to the Administrative Agent and the Banks.

10.Counterparts; Fax Signatures. This Amendment and any documents contemplated hereby may be executed in one or more counterparts and by different parties thereto, all of which counterparts, when taken together, shall constitute but one agreement. This Amendment and any documents contemplated hereby may be executed and delivered by facsimile or other electronic transmission and any such execution or delivery shall be fully effective as if executed and delivered in person.

11.Mo. Rev. Stat. Section 432.047 Statement. The following statement is given pursuant to Mo. Rev. Stat. Section 432.047: NO ORAL AGREEMENTS; FINAL WRITTEN AGREEMENT. ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT ARE NOT ENFORCEABLE REGARDLESS OF THE LEGAL THEORY UPON WHICH IT IS BASED THAT IS IN ANY WAY RELATED TO THE CREDIT AGREEMENT. TO PROTECT YOU (THE BORROWER) AND US (THE ADMINISTRATIVE AGENT, THE DOCUMENTATION AGENT, THE LEAD ARRANGER, THE SWINGLINE LENDER, THE ISSUING BANK AND THE BANKS) FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE REACH

First Amendment to Amended and Restated Credit Agreement –Page 3

COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING, WHICH, TOGETHER WITH ALL OTHER WRITTEN AGREEMENTS BETWEEN US, IS THE COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN WRITING TO MODIFY IT.

12.Governing Law. This Amendment shall be governed by the same law that governs the Credit Agreement.

[Remainder of Page Intentionally Left Blank]

First Amendment to Amended and Restated Credit Agreement –Page 4

IN WITNESS WHEREOF, the parties have entered into this Amendment as of the date first above written.

CERNER CORPORATION,

the Borrower

By: /s/Marc G. Naughton______________________

Marc G. Naughton

Executive Vice President and Chief Financial Officer

U.S. BANK NATIONAL ASSOCIATION,

as Administrative Agent, Lead Arranger, Sole Book Ruuner, Swingline Lender, an Issuing Bank and a Bank

By: /s/Shelly Ungles__________________________

    Shelly Ungles

Vice President

COMMERCE BANK

as a Bank

By: /s/Pamela T. Hill__________________________

Pamela T. Hill

Vice President

UMB BANK, N.A.,

as a Bank

By: /s/Robert P. Elbert_________________________

Robert P. Elbert

Senior Vice President

BANK OF AMERICA, N.A.,

as Documentation Agent, an Issuing Bank and a Bank

By: /s/Jeffery P. Yoakum_______________________

Jeffery P. Yoakum

Senior Vice President

RBS CITIZENS, N.A.

as a Bank

By: /s/Kristin L. Lenda________________________

Kristin L. Lenda

Vice President

SCHEDULE 5.12

SUBSIDIARIES OF CERNER CORPORATION

^ Denotes Subsidiary not wholly-owned by Cerner Corporation or Cerner International, Inc.
* Denotes Foreign Subsidiary

1. Cerner Campus Redevelopment Corporation, a Missouri corporation

2. *Cerner Canada Limited, a Delaware corporation, qualified to do business as a registered branch office in Canada

3. Cerner Capital, Inc., a Delaware corporation

4. Cerner Chouteau Data Center, Inc., a Delaware corporation

5. Cerner Galt, Inc., a Delaware corporation

6. Cerner Health Connections, Inc., a Delaware corporation

7. Cerner Healthcare Solutions, Inc., a Delaware corporation (f/k/a Cerner Physician Practice, Inc.)

8. Cerner Innovation, Inc., a Delaware corporation

• ^*Cerner Healthcare Solutions Private Limited, a private limited company organized under the laws of India

• ^Cerner Math, Inc., a Delaware corporation

9. Cerner International, Inc., a Delaware corporation, has the following Subsidiaries:

• ^*Cerner Arabia Limited, a corporation organized under the laws of Saudi Arabia

• ^*Cerner Chile Limitada, a private limited company organized under the laws of Chile

• *Cerner Corporation PTY Limited, a corporation organized under the laws of Australia

• ^*Cerner India Sales Private Limited, a private limited company organized under the laws of India

• *Cerner Ireland Limited, a company organized under the laws of Ireland, has the following Subsidiaries

◦ ^*Cerner Deutschland GmbH, a corporation organized under the laws of Germany

◦ ^*Cerner Egypt L.L.C, a limited liability company organized under the laws of the Arab Republic of Egypt

◦ ^*Cerner France SAS, a corporation organized under the laws of France

◦ ^*Cerner Iberia, S.L., a corporation organized under the laws of Spain

◦ ^*Cerner Limited, a corporation organized under the laws of the United Kingdom

◦ ^*Cerner Middle East FZ-LLC, a free zone limited liability company duly organized and existing under the laws and regulations of the Dubai Internet City Free Zone, Emirate of Dubai, United Arab Emirates (the "FZ-LLC")

▪ ^*Cerner Middle East, Ltd., an Exempted Company incorporated in the Cayman Islands with Limited Liability, qualified to do business as a registered branch office in Abu Dhabi, Riyhad, Saudi Arabia and Doha Qatar

• ^*Cerner México, S. de R. L. de C.V., a limited liability company organized under the laws of Mexico

• *Cerner Singapore Limited, a Delaware corporation, qualified to do business as a registered branch office in Singapore

• ^*Cerner Soluções para a Saúde Ltda. (Brazil), a limited liability company organized under the laws of Brazil

10. Cerner Lingologix, Inc., a Delaware corporation

11. *Cerner (Malaysia) SDN BHD, a corporation organized under the laws of Malaysia

12. Cerner Multum, Inc., a Delaware corporation

13. Cerner Properties, Inc., a Delaware corporation

14. Rockcreek Aviation, Inc., a Delaware corporation

15. The Health Exchange, Inc., a Missouri corporation

EX-10.(L)

Exhibit 10(l)

CERNER CORPORATION

2005 ENHANCED SEVERANCE PAY PLAN

As Amended and Restated (for I.R.C. § 409A) Effective December 31, 2012

SECTION 1.INTRODUCTION.

(a)Purpose. Cerner Corporation and its United States-based wholly-owned subsidiaries ("Cerner") value the contributions of their Associates and take measures to create and maintain a productive and fulfilling work environment. However, Cerner recognizes that business needs, an Associate's work performance or other reasons may require termination of employment. At any point during an Associate's employment, Cerner may choose to terminate the employment relationship.

Because employment with Cerner is at-will, Cerner has no obligation to compensate any Associate upon termination from his or her employment other than as may be provided in that Associate's Cerner Associate Employment Agreement or as specifically set forth in this 2005 Enhanced Severance Pay Plan ("Plan"). Cerner values its Associates and is interested in helping to mitigate the financial hardship caused by business conditions or other factors necessitating a termination.

(b)Overview. Generally, this Plan provides enhanced Severance Benefits to Associates upon either a (i) "Non-CIC Severance" or (ii) "CIC Severance", as such terms are defined herein. Cerner expressly reserves the right to amend or terminate this Plan, or the benefits provided hereunder, at any time; provided, however, that no such amendment or termination shall occur with respect to the CIC Severance Benefits after the occurrence of a Change in Control.

(c)Summary Plan Description. This Plan document also constitutes the Summary Plan Description for the Plan.

SECTION 2.DEFINITIONS.

Certain capitalized terms used herein are defined parenthetically throughout this Plan and/or defined in this Section 2.

(a)Associate. “Associate” means an employee of Cerner.

(b)Beneficial Ownership. "Beneficial Ownership", "Beneficial Owner" or "Beneficially Own" shall have the same meaning as such terms are used in Rule 13d-3 of the Exchange Act.

(c)Board. "Board" means the Board of Directors of Cerner Corporation.

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(d)Cause. "Cause" means an Eligible Associate's (i) material breach of his/her Employment Agreement or material neglect of his/her duties and responsibilities thereunder, (ii) fraud against Cerner, (iii) misappropriation of Cerner's assets, (iv) embezzlement from Cerner, (v) theft from Cerner, (vi) acts resulting in the arrest and indictment for a crime involving drug abuse, violence, dishonesty or theft or (vii) act or failure to take any action that results in a violation of the Sarbanes-Oxley Act of 2002, or any related statutes, laws or regulations.

(e)Change in Control. "Change in Control" means:

(i)    The acquisition by any "Person" (as the term "person" is used for purposes of Section 13(d) or 14(d) of the Exchange Act) of Beneficial Ownership of thirty-five percent (35%) or more of either: (A) the then outstanding shares of common stock of Cerner Corporation (the "Outstanding Cerner Common Stock"), or (B) the combined voting power of the then outstanding voting securities of Cerner Corporation entitled to vote generally in the election of the Board's directors (the "Outstanding Cerner Voting Securities"); provided, however, that for purposes of this subsection (i), the following acquisitions shall not constitute a Change in Control: (X) any acquisition directly from Cerner, (Y) any acquisition by Cerner or (Z) any acquisition by any Associate benefit plan (or related trust) sponsored or maintained by Cerner Corporation or any corporation controlled by Cerner; or

(ii)    Individuals who, as of the date hereof, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a Board director subsequent to the date hereof whose appointment or election, or nomination for election by Cerner's shareholders, was approved by a vote of at least a majority of the Board directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of Board directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

(iii)    Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of Cerner (a "Business Combination"), in each case, unless, following such Business Combination, (A) all or substantially all of the individuals and entities who were the Beneficial Owners, respectively, of the Outstanding Cerner Common Stock and Outstanding Cerner Voting Securities immediately prior to such Business Combination Beneficially Own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of Cerner Corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns Cerner or all or substantially all of Cerner's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Cerner Common Stock

2

and Outstanding Cerner Voting Securities, as the case may be, (B) no Person (excluding any Associate benefit plan (or related trust) of Cerner or such corporation resulting from such Business Combination) Beneficially Owns, directly or indirectly, 35% or more of, respectively, the then outstanding shares of common stock of Cerner Corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (C) at least a majority of the members of the Board resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or

(iv)    Approval by the shareholders of Cerner Corporation of a complete liquidation or dissolution of Cerner.

(f)CIC Protected Period. "CIC Protected Period" means the period beginning on the effective date of a Change in Control and ending on the one-year anniversary of such effective date.

(g)CIC Severance. "CIC Severance" means, at any time during the CIC Protected Period, an Eligible Associate's termination of employment with Cerner (or its successor), that also qualifies as a separation from service under Section 409A of the Code, due to (i) Cerner's (or its successor’s) termination without Cause of the Eligible Associate's employment, or (ii) the Eligible Associate's resignation for Good Reason.

(h)CIC Severance Benefits. "CIC Severance Benefits" means those severance benefits set forth in Section 4(b) that, provided an Eligible Associate is entitled to receive such benefits in accordance with Section 3, the Eligible Associate receives following a CIC Severance.

(i)CIC Week of Severance Pay. A "CIC Week of Severance Pay" means an Eligible Associate's: (i) regular weekly base rate of pay in effect on the effective date of a CIC Severance (prior to any reductions taken for payroll taxes, income tax withholdings, elective deferrals made to or in connection with Cerner's Associate benefit plans or Executive Deferred Compensation Plan, and excluding any overtime, bonuses, commissions, premium pay, benefits, expense reimbursements, etc.), plus (ii) the average annual cash bonus the Associate had received from Cerner during the three (3) years preceding the CIC Severance (prior to any reductions taken for payroll taxes, income tax withholdings, elective deferrals made to or in connection with Cerner's Associate benefit plans or Executive Deferred Compensation Plan, and excluding any overtime, bonuses, commissions, premium pay, benefits, expense reimbursements, etc.), divided by 52 weeks. For example, a CIC Week of Severance Pay for an Eligible Associate whose: (i) annual base salary (excluding the pay and benefits listed above) is $52,000, and (ii) whose average annual cash bonus received during the three (3) years preceding the CIC Severance is $15,600, would be $1,000 ($52,000/52 weeks) plus $300 ($15,600/52 weeks), equaling a CIC Week of Severance Pay of $1,300. Cerner’s cash bonus plan currently pays a bonus, if earned, following each fiscal quarter of Cerner. When calculating the average annual cash bonus, the actual cash bonus paid to the Associate (or earned but not yet paid for the most recent full fiscal quarter preceding the CIC Severance) for the twelve (12) consecutive full Cerner fiscal quarters immediately preceding the

3

CIC Severance shall be included in the calculation of the Associate’s average annual cash bonus for the three (3) years preceding the CIC Severance. If the Associate has not been employed by Cerner for twelve (12) consecutive full Cerner fiscal quarters immediately prior to the CIC Severance, the average annual cash bonus received by such Associate shall be calculated based on the number of consecutive full fiscal quarters the Associate has been employed by Cerner immediately prior to the CIC Severance and adjusted to equal a yearly average. For avoidance of all doubt, the calculation of average annual cash bonus shall not include any sales commissions or similar payments received by an Associate based on individual sales or contracts signed with Cerner clients.

(j)COBRA. "COBRA" means the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.

(k)Code. "Code" means the Internal Revenue Code of 1986, as amended.

(l)Eligible Associate. "Eligible Associate" means an individual who: (i) is a permanent, full-time salaried Associate on the U.S. payroll of Cerner, as determined by Cerner's employment records; and (ii) has entered into an Employment Agreement. The determination of whether an Associate is an Eligible Associate shall be made by the Plan Administrator, in its sole discretion, and such determination shall be binding and conclusive on all persons. In no event shall part-time Associates, interns or independent contractors be Eligible Associates.

(m)Employment Agreement. "Employment Agreement" means an Eligible Associate's then current Cerner Associate Employment Agreement with Cerner.

(n)Exchange Act. "Exchange Act" means the Securities Exchange Act of 1934, as amended.

(o)Excess Severance Benefits. "Excess Severance Benefits" means any Severance Benefits that exceed the limit provided in Treas. Reg. Section 1.409A-1(b)(9)(iii).

(p)Good Reason. "Good Reason" means, without an Eligible Associate's express written consent: (i) a material adverse change in the Eligible Associate's authority, duties or job responsibilities (except for such subordination in duties and job responsibilities as may normally be required due to Cerner's change from an independent business entity to a subsidiary or division of another corporate entity); or (ii) a reduction of 5% or more to an Eligible Associate's annual salary and cash bonus opportunity in effect prior to the Change in Control; provided, however, the Eligible Associate must provide notice to Cerner (or its successors) within 30 days after the adverse change or reduction and must give Cerner (or its successors) at least 30 days to remedy the event or condition. In no event will an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by Cerner (or its successors) constitute Good Reason.

(q)Non-CIC Severance. "Non-CIC Severance" means at any time, other than during a CIC Protected Period, an Eligible Associate's termination of employment with Cerner, that also qualifies as a separation from service under Section 409A of the Code, by Cerner, other than for Cause, due to reorganization, restructuring, unsatisfactory work performance (other than where

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such unsatisfactory work performance is deliberate), or for other reasons as determined by the Plan Administrator in its sole discretion to constitute a Non-CIC Severance. Without limitation, the following events and reasons shall not constitute a Non-CIC Severance:

(i)death;

(ii)disability;

(iii)voluntary resignation (regardless of the circumstances surrounding the Eligible Associate's decision to resign);

(iv)retirement;

(v)discharge by Cerner for any other work related reason other than redundancy or unsatisfactory work performance (including, without limitation, absenteeism, misconduct, refusal to transfer to an equivalent position that does not require relocation, failure to return to work after an approved leave of absence, insubordination, violation of Cerner's rules or policies, dishonesty, deliberate unsatisfactory performance, etc.);

(vi)entering military duty;

(vii)CIC Severance; or

(viii)Termination for Cause.

(r)Non-CIC Severance Benefits. "Non-CIC Severance Benefits" means those severance benefits set forth in Section 4(a) that, provided an Eligible Associate is entitled to receive such benefits in accordance with Section 3, the Eligible Associate receives following a Non-CIC Severance.

(s)Plan Administrator. "Plan Administrator" means the person or entity specified as such in Section 7.

(t)Role Level. "Role Level" means an Eligible Associate's designated category of employment as specified by Cerner's current employment classification hierarchy. In the event Cerner changes its hierarchy structure, the Role Levels specified in this Plan shall refer to the equivalent Role Level under any new classification scheme.

(u)Severance Benefits. “Severance Benefits” means either CIC Severance Benefits or Non-CIC Severance Benefits.

(v)Specified Associate. "Specified Associate" means an Associate that would be a "specified employee" as defined in Section 409A(a)(2)(B)(i) of the Code and Department of Treasury regulations and other interpretive guidance issued thereunder.

(w)Week of Severance Pay. "Week of Severance Pay" means an Eligible Associate's regular weekly base rate of pay in effect on the effective date of a Non-CIC Severance

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(prior to any reductions taken for payroll taxes, income tax withholdings, elective deferrals made to or in connection with Cerner's Associate benefit plans or Executive Deferred Compensation Plan, and excluding any overtime, bonuses, commissions, premium pay, benefits, expense reimbursements, etc.). For example, a Week of Severance Pay for an Eligible Associate whose annual base salary as of the Non-CIC Severance (excluding the pay and benefits listed above) is $52,000, would be $1,000 ($52,000/52 weeks).

(x)Year of Service. "Year of Service" means, with respect to an Eligible Associate, each period of twelve (12) consecutive months of full-time employment by Eligible Associate with Cerner beginning with the Associate's full-time employment commencement date with Cerner and ending with the day preceding the anniversary of such date in the next and all succeeding years. No partial Years of Service shall be credited under this Plan nor will prorated Severance Benefits be paid for any fractional Year of Service.

SECTION 3.ENTITLEMENT FOR SEVERANCE BENEFITS

(a)Entitlement. Subject to the exceptions set forth below in Section 3(b), an Eligible Associate shall be entitled to receive either the Non-CIC Severance Benefits or the CIC Severance Benefits described below in Section 4, upon experiencing a Non-CIC Severance or CIC Severance, respectively, and provided that the following conditions are satisfied:

(i)The Eligible Associate's termination of employment with Cerner must have constituted either a CIC Severance or Non-CIC Severance. In no event shall an Associate’s leave during one of Cerner’s recognized leave programs constitute a termination of employment event under this Plan,

(ii)Following or in connection with the Eligible Associate's termination of employment, the Eligible Associate must comply with all transition assistance requests of Cerner, to Cerner's satisfaction, such as aiding in the location of files and documents, returning all Cerner property and repaying any amounts owed Cerner, and

(iii)With respect to and in connection with a Non-CIC Severance only, the Eligible Associate has executed and delivered to Cerner (and not revoked by the end of any applicable revocation period) a Severance and Release Agreement with Cerner, such agreement providing for an irrevocable and complete release of all present and future claims by the Eligible Associate, within twenty-one (21) days or forty-five (45) days, whichever period is required under applicable law. The end of any applicable revocation period, which in no event is to exceed seven (7) days, is referred to in this Plan as the “Release Period Deadline.”

(b)Exceptions to Severance Entitlement. An Eligible Associate will not receive Severance Benefits under this Plan in the following circumstances, as determined in the Plan Administrator's sole discretion:

(i)The Eligible Associate's Employment Agreement (or amendments or supplement thereto) provides that none of the benefits provided under this Plan or any other

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broad-based Cerner severance plan or policy shall apply to such Associate. In such a case, such Associate's severance benefits, if any, shall be governed by the terms of such Employment Agreement (as amended or supplemented).

(ii)The Associate breaches the terms and conditions of his/her Employment Agreement (including, without limitation, violating the non-competition provisions thereof).

(iii)With respect to Non-CIC Severance Benefits only: (a) the Eligible Associate's employment termination is in connection with the sale, divesture or other disposition of the stock or assets of any subsidiary, division or other operating unit of Cerner or any of its subsidiaries ("Operating Unit") (or part thereof) which does not constitute a Change in Control (a "Transaction"), and the Eligible Associate is offered continued employment, or continues in employment, with the divested Operating Unit (or part thereof) or the purchaser of the stock or assets of the Operating Unit (or part thereof), or one of such purchaser's affiliates (the "Post-Transaction Employer"), as the case may be, on terms and conditions that would not constitute Good Reason, and (b) Cerner obtains an agreement from the Post-Transaction Employer, enforceable by the Eligible Associate, to provide (or Cerner agrees to provide) severance pay, if the Eligible Associate accepts the offered employment or continues in employment with the Post-Transaction Employer or its affiliates following the Transaction, at least equal to the severance pay set forth in Section 4(a) payable upon a Non-CIC Severance termination of the Eligible Associate's employment with the Post-Transaction Employer or its affiliates within the six (6) month period following the Transaction. For purposes of this Section 3(b)(iii), the term "Good Reason" shall have the meaning ascribed to it in this Plan, but the term "Cerner" as it is used in such definition shall be deemed to refer to the Post-Transaction Employer employing the Eligible Associate after the Transaction. For avoidance of doubt, in the circumstances described in the first sentence of this Section 3(b)(iii), the Eligible Associate shall not be entitled to receive Non-CIC Severance Benefits under Section 4(a) whether or not the Eligible Associate accepts the offered employment or continues in employment. Except as to separate severance benefits Cerner may itself expressly agree to in writing to provide in connection with a Transaction (as contemplated by subpart (b) of the first sentence of this Section 3(b)(iii)), the provisions of this Section 3(b)(iii) do not create any entitlement to Severance Benefits from Cerner in any circumstances whatsoever and are to be construed solely as a limitation on such entitlement in the circumstances herein set forth.

SECTION 4.SEVERANCE BENEFITS.

(a)Non-CIC Severance Benefits: If the termination of an Eligible Associate's employment constitutes a Non-CIC Severance, Cerner shall pay the Eligible Associate an amount of severance pay based on the Eligible Associate's Role Level and Years of Service with Cerner as of the effective date of such termination. The amount of such severance pay shall be equal to: (i) a Week of Severance Pay for such Eligible Associate multiplied by (ii) that number set forth in a severance matrix, adopted periodically by management, outlining the severance benefits to which

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Eligible Associates shall be entitled (“Severance Matrix”). The Severance Matrix shall be attached hereto as Exhibit A, and dated to reflect the most recent adoption date by management.

(b)CIC Severance Benefits. If the termination of an Eligible Associate's employment constitutes a CIC Severance, Cerner shall pay the Eligible Associate an amount of severance pay based on the Eligible Associate's Role Level and Years of Service with Cerner as of the effective date of such termination. The amount of such CIC Severance Benefits shall be equal to: (i) a CIC Week of Severance Pay for such Eligible Associate multiplied by (ii) that number set forth in the current Severance Matrix, multiplied by 1.5.

(c)Form of Payment.

(i)Before any Change in Control and except with respect to Excess Severance Benefits, all Non-CIC Severance Benefits shall be paid in a lump sum or, if the Plan Administrator elects, as salary continuation (without interest) on regularly scheduled paydays of Cerner for the applicable severance period or some other method, but in no event shall payments continue beyond the last day of the twenty-fourth (24^th) month following the month in which the Non-CIC Severance occurs.

(ii)Before a Change in Control, all Non-CIC Severance Benefits which are Excess Severance Benefits shall be paid in a lump sum as soon as practicable within 75 days of the Non-CIC Severance.

(iii)After a Change in Control and subject to the immediately following sentence, all Severance Benefits shall be paid in lump sum and (A) if the Severance Benefits are on account of a Non-CIC Severance, such that the payment of such benefits is subject to the Severance and Release Agreement requirements described above in Section 3(a)(iii), such Non-CIC Severance Benefits shall be paid on the last day of the Release Period Deadline, and (B) if the Severance Benefits are on account of a CIC Severance, such that the payment of such benefits is not subject to the Severance and Release Agreement requirements described above in Section 3(a)(iii), such CIC Severance Benefits shall be paid within seventy-five (75) days of the CIC Severance. Notwithstanding the immediately preceding sentence, if the Associate receiving any Severance Payment subject to this Section 4(c)(iii) is a Specified Associate, then the payment of any Severance Benefits shall be delayed until and paid on the first day of the seventh month following the CIC or Non-CIC Severance.

(iv)All Severance Benefit payments are subject to the offset provisions of Section 6(c) of the Plan.

(d)Withholding. All Severance Benefits made under this Plan will be subject to applicable withholding for federal, state and local taxes. If any Eligible Associate is indebted to Cerner at his or her termination date, Cerner reserves the right to offset any Severance Benefits under this Plan by the amount of such indebtedness.

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SECTION 5.EMPLOYMENT.

(a)No Modification of Associate Employment Agreements. This Plan shall not modify any terms of an Eligible Associate's Employment Agreement, including but not limited to the type of employment relationship, the Associate's obligations and continuing obligations set forth therein.

(b)Limitation on Associate Rights. This Plan shall not give any Associate the right to be retained in the service of Cerner or interfere with or restrict the right of Cerner to terminate the employment of any Associate.

(c)Changed Decisions. Cerner has the right to cancel or reschedule the effective date of an Eligible Associate's employment termination. An Eligible Associate will not be eligible for any Severance Benefits under this Plan if the Eligible Associate's employment termination is canceled by Cerner, or if the Eligible Associate is offered an opportunity to return to work or have his or her employment reinstated with Cerner.

SECTION 6.RELATION TO OTHER BENEFITS AND PAY

(a)COBRA. Associates and their dependents covered under one or more of Cerner's group health plans may be eligible for continuation coverage pursuant to the federal COBRA law. This Plan does not provide Associates or their dependents with any greater right to continuation coverage than what the federal COBRA law requires.

(b)Other Benefit Plans. Eligibility, coverage and benefits under other Cerner benefit plans (e.g., any group life, disability, accidental death, retirement, stock plans, etc.) are governed by the terms of those respective plans. This Plan does not provide Associates or their beneficiaries and dependents with any greater eligibility, coverage or benefits than what such plans provide.

(c)Offset of Benefits. Except as may otherwise be specifically provided for in an Associate's Employment Agreement, the amount of any Severance Benefits paid under this Plan is in lieu of, and not in addition to, any other severance an Eligible Associate may otherwise be entitled to receive from Cerner, including under an Employment Agreement or other document. Notwithstanding the payment provisions of Section 4(c)(i) with respect to any Severance Benefit payment before a Change in Control, the Company may offset any amount otherwise owed to the Company against any Severance Benefit the Cerner Associate may be entitled to provided such offset is not in contravention of Code section 409A, and (ii) with respect to any Severance Benefit payment after a Change in Control, the Company may offset any amount otherwise owed to the Company against any Severance Benefits in accordance with Treasury Regulation § 1.409A-3(j)(4)(xiii) or in any other manner which the Company determines that doing so would allow both this Plan and the other plan or agreement to operate in compliance with Code section 409A.

(d)Integration with Other Payments. Severance Benefits paid under this Plan are not intended to duplicate benefits such as pay-in-lieu of notice, severance pay, workers compensation wage replacement, disability pay, or similar benefits or pay under other benefit plans,

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severance programs, employment agreements, transaction documents or applicable laws, such as the WARN Act. In the event such other pay or benefits is payable to an Eligible Associate, Severance Benefits under this Plan will be reduced accordingly or, alternatively, pay or benefits previously paid under this Plan will be treated as having been paid to satisfy other pay or benefit obligations. In either case, the Plan Administrator, in its sole discretion, will determine how to apply this provision and may override other provisions in the Plan in doing so. This provision, however, shall not preclude an otherwise Eligible Associate from receiving any payments under a Cerner Performance Plan (CPP) or any pay for accrued vacation under Cerner’s separate CPP or vacation policy, as may be amended from time-to-time. CPP and pay for accrued vacation, if any, shall be paid pursuant to the terms of those separate plans or policies.

(e)Reemployment. If an Eligible Associate is reemployed by Cerner while Severance Benefits are still payable under the Plan, all such Severance Benefits will cease, except as otherwise specified by the Plan Administrator, in its sole discretion.

SECTION 7.PLAN ADMINISTRATION.

(a)Plan Administrator. The Plan is administered by Cerner, which is the Plan Administrator under the Employee Retirement Income Security Act of 1974 ("ERISA"). It is the responsibility of the Plan Administrator to ensure that the Plan is administered in accordance with its terms. It is also the responsibility of the Plan Administrator to explain any rights and benefits that an Eligible Associate may have under the Plan and to answer any questions which an Eligible Associate may have. The Plan Administrator maintains all documents which comprise the Plan and annual filings, if any, which are prepared for the Plan. If you have any questions regarding the Plan, you should review these available documents. The Plan Administrator may, but is not required to, adopt rules and regulations of uniform applicability in its interpretation and implementation of the Plan. The Plan Administrator may require each Eligible Associate to submit, in such form as it shall deem reasonable and acceptable, proof of any information which the Plan Administrator finds necessary or desirable for the proper administration of the Plan.

(b)Exclusive Discretion. The Plan Administrator has full and complete discretionary authority to determine eligibility for benefits under the Plan and to construe and interpret the terms of the Plan. In making any decision or resolving any disputes, the Plan Administrator shall have full and complete discretionary authority to (i) construe and interpret the provisions of the Plan and to determine the right of any person to any interest in or eligibility for any benefit under the Plan, and (ii) make any and all factual determinations necessary to determine the right of any person to any interest in or eligibility for any benefit under the Plan; and, no person shall be entitled to any benefit or interest under this Plan if the Plan Administrator decides in its discretion that there is no entitlement to that benefit or interest. Decisions of the Plan Administrator shall be final, binding and conclusive upon all parties.

SECTION 8.AMENDMENT OR TERMINATION

Cerner, acting through its Chief Executive Officer, Chief Financial Officer, Chief Legal Officer or Chief People Officer, has the right, in its nonfiduciary capacity, to amend the Plan or to terminate it at any time, prospectively or retroactively, for any reason or no reason, without

10

notice, including discontinuing or eliminating benefits; provided, however, that no such amendment or termination shall affect the right to any unpaid benefit of any Eligible Associate whose termination date has occurred prior to such amendment or termination of the Plan and provided further that no amendment or termination shall occur with respect to the CIC Severance Benefits after the occurrence of a Change in Control. Accordingly, no Associate has a “legally binding right” (as that term is used in Treasury Regulations § 1.409A-1(b)(1)) to any benefit or amount pursuant to this Plan until, if at all, the first to occur of an Associate’s Non-CIC Severance or a Change in Control and only then is the Associate entitled to those Severance Benefits, if any, as are provided for in the Plan at such time.

SECTION 9.CLAIMS AND APPEAL PROCEDURE

(a)Initial Claim. If benefits under this Plan become due, the Plan Administrator will notify you as to the amount of benefits you are entitled to, the duration of such benefit, the time the benefit is to commence and other pertinent information concerning your benefit. If you have been denied a benefit under the Plan, or if you feel that the benefit which has been given to you is not accurate, you may file a claim with the Plan Administrator. If a claim for benefit is denied by the Plan Administrator, the Plan Administrator shall provide you with written or electronic notification of any adverse benefit determination within ninety (90) days after receipt of the claim unless special circumstances require an extension of time for processing the claim. If such an extension of time for processing is required, written or electronic notice indicating the special circumstances and the date by which a final decision is expected to be rendered shall be furnished to you. In no event shall the period of extension exceed one hundred eighty (180) days after receipt of the claim. The notice of denial of the claim shall set forth:

(i)The specific reason or reasons for the adverse determination;

(ii)Reference to the specific plan provisions on which the determination is based;

(iii)A description of any additional material or information necessary for you to perfect the claim, and an explanation of why such material or information is necessary; and

(iv)A description of the Plan's review procedures and the time limits applicable to such procedures, including a statement of your right to bring a civil action under ERISA section 502(a) following an adverse benefit determination on review.

You (or your duly authorized representative) may review pertinent documents and submit issues and comments in writing to the Plan Administrator. If you fail to appeal such action to the Plan Administrator in writing within the prescribed period of time described in the next section, the Plan Administrator's adverse determination shall be final, binding and conclusive.

(b)Appeal. In the event of an adverse benefit determination, you may appeal the adverse determination by giving written notice to the Plan Administrator within sixty (60) days after receipt of the notice of adverse benefit determination. The Plan Administrator may hold a

11

hearing or otherwise ascertain such facts as it deems necessary and shall render a decision which shall be binding upon both parties. The appeal procedure shall:

(i)Provide you at least 60 days following receipt of a notification of an adverse benefit determination within which to appeal the determination;

(ii)Provide you the opportunity to submit written comments, documents, records, and other information relating to the claim for benefits;

(iii)Provide that you shall be provided, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to your claim for benefits; and

(iv)Provide for a review that takes into account all comments, documents, records, and other information submitted by you relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.

The decision of the Plan Administrator shall be made within sixty (60) days after the receipt by the Plan Administrator of the notice of appeal, unless special circumstances require an extension of time for processing, in which case a decision of Cerner shall be rendered as soon as possible but not later than one hundred twenty (120) days after receipt of the request for review. If such an extension of time is required, written or electronic notice of the extension shall be furnished to you prior to the commencement of the extension. The decision of the Plan Administrator shall be provided in written or electronic form to you and shall include the following:

(i)The specific reason or reasons for the adverse determination;

(ii)Reference to the specific plan provisions on which the benefit determination is based;

(iii)A statement that you are entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to your claim for benefits. Whether a document, record, or other information is relevant to a claim for benefits shall be determined by reference to DOL Regulation Section 2560.503-1 (m)(8); and

(iv)A statement describing any voluntary appeal procedures offered by the Plan and your right to obtain the information about such procedures, and a statement of your right to bring an action under ERISA section 502(a).

SECTION 10.STATEMENT OF ERISA RIGHTS

The following statement is required by federal statute. Certain portions of this statement may not apply to your particular situation or to this Plan.

(a)Information About This Plan and Your Benefits. If you become a participant in the Cerner Corporation Enhanced Severance Pay Plan you are entitled to certain rights and

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protections under the Employee Retirement Income Security Act of 1974 (ERISA). ERISA provides that all Plan participants shall be entitled to:

(i)Examine, without charge, at the Plan Administrator's office and at other specified locations, the Plan documents and, if any, copies of all documents filed by the Plan with the U.S. Department of Labor, such as detailed annual reports and plan descriptions.

(ii)Obtain copies of all Plan documents and other plan information upon written request to the Plan Administrator. The Plan Administrator may make a reasonable charge for the copies.

(iii)Receive a summary of the Plan's annual financial report, if one is required to be prepared. The Plan Administrator is required by law to furnish each participant with a copy of this summary annual report if an annual report is required to be filed with the Department of Labor.

(b)Prudent Actions by Plan Fiduciaries. In addition to creating rights for plan participants, ERISA imposes duties upon the people who are responsible for the operation of the employee benefit plan. The people who operate your plan, called "fiduciaries" of the plan, have a duty to do so prudently and in the interest of you and other plan participants and beneficiaries. No one, including your employer or any other person, may fire you or otherwise discriminate against you in any way to prevent you from obtaining a welfare benefit or exercising your rights under ERISA.

(c)Enforce Your Rights. If your claim for a Plan benefit is denied in whole or in part you must receive a written explanation of the reason for the denial. You have the right to have the Plan review and reconsider your claim. Under ERISA, there are steps you can take to enforce the above rights. For instance, if you request materials from the Plan and do not receive them within 30 days, you may file suit in a federal court. In such a case, the court may require the Plan Administrator to provide the materials and pay you up to $110 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the Plan Administrator. If you have a claim for benefits which is denied or ignored, in whole or in part, you may file suit in a state or federal court. If it should happen that plan fiduciaries misuse the plan's money, or if you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in a federal court. The court will decide who should pay court costs and legal fees. If you are successful the court may order the person you have sued to pay these costs and fees. If you lose, the court may order you to pay these costs and fees, for example, if it finds your claim is frivolous.

(d)Assistance with Your Questions. If you have any questions about this Plan, you should contact the Plan Administrator. If you have any questions about this statement or about your rights under ERISA, you should contact the nearest office of the Employee Benefits and Security Administration, U.S. Department of Labor, listed in your telephone directory, or the Division of Technical Assistance and Inquiries, Employee Benefits and Security Administration, U.S. Department of Labor, 200 Constitution Avenue, N.W., Washington, D.C. 20210.

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SECTION 11.ADDITIONAL INFORMATION

(a)Name and Address of Plan Sponsor and Plan Administrator. The name and address of the Plan Sponsor and the Plan Administrator is:

Cerner Corporation

2800 Rockcreek Parkway

North Kansas City, MO 64117

EIN: 43-1196944

Telephone: (816) 201-1024

(b)Type of Administration. The Plan is administered by Cerner Corporation.

(c)Plan Number. The Plan number is 513.

(d)Plan Year. The Plan Year ends on December 31.

(e)Agent For Service of Legal Process. Service of legal process may be made upon the Plan Sponsor (which is also the Plan Administrator) at the above address.

(f)Plan Costs. Plan costs are paid by Cerner. The Plan is funded out of Cerner's general assets.

(g)Insurance. Benefits provided by this Plan are not insured by the Pension Benefit Guaranty Corporation under Title IV of ERISA because the insurance provisions under ERISA are not applicable to the Plan.

SECTION 12.GOVERNING LAW.

This Plan is an "employee welfare benefit plan" within the meaning of Section 3(1) of ERISA and it shall be interpreted, administered, and enforced in accordance with that law. To the extent that state law is applicable, the statutes and common law of the State of Missouri, excluding any that mandate the use of another jurisdiction's laws, shall apply. Without limiting the generality of this Section 12, it is intended that the Plan comply with Section 409A of the Code, and, in the event that this Plan is determined to be a "deferred compensation plan" within the meaning of Section 409A(d)(1) of the Code, Cerner shall, as necessary, adopt such conforming amendments as are necessary to comply with Section 409A of the Code.  

SECTION 13.BASIS OF PAYMENTS TO AND FROM THE PLAN

The Plan shall be unfunded, and all cash payments under the Plan shall be paid only from the general assets of Cerner.

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SECTION 14.LIMITATION ON IRC SECTION 280G PARACHUTE PAYMENTS

In the event that any Severance Benefit payment to be made under this Plan would cause an Eligible Associate to be liable for any excise tax under Code section 4999(a), the aggregate amount of such Severance Benefit shall be reduced by the minimal amount necessary such that the Eligible Associate is no longer subject to such excise tax.   Any determination or calculation made by Cerner relating to this Section 14, including, but not limited to, any calculation of an Eligible Associate's "base amount" as defined in Code section 280G(b)(3), or an Eligible Associate's anticipated "parachute payment," as defined in Code section 280G(b)(2), shall be final, conclusive and binding on the Eligible Associate.

SECTION 15.CONSTRUCTION.

Where the context so indicates, the singular will include the plural and vice versa. Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of the Plan. Unless the context clearly indicates to the contrary, a reference to a statute or document shall be construed as referring to any subsequently enacted, adopted, or executed counterpart.

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EX-10.(U)

Exhibit 10(u)

CERNER CORPORATION 2011

OMNIBUS EQUITY INCENTIVE PLAN - PERFORMANCE BASED RESTRICTED STOCK AGREEMENT

WHEREAS, the Section 16 Insider Equity and Incentive Compensation Subcommittee of the Compensation Committee (the "Committee") of the Board of Directors of Cerner Corporation ("the Company") has determined that Grantee (the "Participant") is eligible to receive a Performance-Based Restricted Stock Grant under the Company's 2011 Omnibus Equity Incentive Plan (the "Plan"), as so indicated on the Front; NOW, THEREFORE, in consideration of the mutual promises and covenants herein contained and other good and valuable consideration, the parties hereto do hereby agree as follows: 1. Incorporation of the Plan.  A copy of the Plan is incorporated herein by reference and all the terms, conditions and provisions contained therein shall be deemed to be contained in this Agreement. 2. Restricted Stock Grant.  Pursuant to the authorization of the Committee, and subject to the terms, conditions and provisions contained in this Agreement, the Company hereby grants to the Participant a Performance-Based Restricted Stock Award (the "Award") for the aggregate number of shares of Company Common Stock (the "Shares") set forth on the front or first page of this Agreement (the "Front"). The date of grant of the Award (the "Grant Date") shall for all purposes be as set forth on the Front. 3. Rights as a Shareholder. Commencing on the Grant Date, the Participant shall have the right to receive dividends and other distributions (if any) with respect to the Shares unless and until such Shares are forfeited pursuant to Section 5 hereof; provided, however, that a dividend or other distribution (including, without limitation, a stock dividend or stock split), other than a cash dividend or distribution, shall be delivered to the Company and shall be subject to the same vesting schedule and other terms, conditions and restrictions as the Shares with respect to which such dividend or other distribution was made. In connection with the payment of such dividends or other distributions, the Company may deduct any taxes or other amounts required by any governmental authority to be withheld and paid over to such authority for the account of the Participant. The Participant shall be entitled to retain cash dividends and distributions received regardless of whether the Shares with respect to which such dividends or distributions were made are subsequently forfeited pursuant to Section 5 hereof. Participant shall have no right to vote the Shares until such Shares are actually distributed on the Vest Date. Notwithstanding anything to the contrary, prior to the date on which the Shares and any related property received under Section 3 hereof (the "Aggregate Restricted Shares") Vest pursuant to Section 5, such Aggregate Restricted Shares shall be subject to the restrictions on transferability contained in Section 6 hereof. 4. Custody and Delivery of Shares.  Unless otherwise requested by Participant, Aggregate Restricted Shares will be distributed in street name on the Vest Date and held in the Participant's account at Morgan Stanley Smith Barney or other broker that the Company may choose (the "Broker"). Prior to the Vest Date, the Grant of the Aggregate Restricted Shares will be recorded in the Company's books and records. Company will reflect in its records the restrictions under which the Aggregate Restricted Shares are held and will not allow distribution or transfer of any Aggregate Restricted Shares prior to the date on which such Aggregate Restricted Shares Vest pursuant to Section 5 below. Shares, representing Vested Aggregate Restricted Shares, will be distributed only on or after the Vest Date and only if the requirements of vesting set forth in Section 5 are met. The Company will pay all original issue or transfer taxes and all fees and expenses incident to the delivery of any Aggregate Restricted Shares hereunder. 5. Vesting and Forfeiture. Except as otherwise provided in the Plan or this Agreement, the Aggregate Restricted Shares subject to this Award shall be distributed, become transferable and shall cease to be subject to forfeiture ("Vest") upon the achievement of the objective and subjective performance goals set forth on the Front, subject to the restrictions set forth on the Front (the "Vest Date") provided Participant remains an employee ("associate") of the Company from the Grant Date through the Vest Date as defined on the Front. This Grant will expire if Participant has not reached the performance goals as set forth on the Front. Should the Participant's employment terminate, for any reason, then all Aggregate Restricted Shares that have not Vested as of such date of termination shall immediately terminate and shall be forfeited to the Company. 6. Non-Transferability of Shares. Prior to the date on which Aggregate Restricted Shares Vest pursuant to Section 5 hereof, such Aggregate Restricted Shares may not be sold, transferred, assigned, pledged, hypothecated, encumbered or otherwise disposed of (whether by operation of law or otherwise) or be subject to execution, attachment or similar process. Any such attempted sale, transfer, assignment, pledge, hypothecation or encumbrance, or other disposition of such Aggregate Restricted Shares shall be null and void. 7. Securities Laws. Participant hereby represents and covenants that if in the future the Participant decides to offer or dispose of any Aggregate Restricted Shares or interest therein, the Participant will do so only in compliance with this Agreement, the Securities Act of 1933, as amended, and all applicable state securities laws. As a condition precedent to the delivery to Participant of the Aggregate Restricted Shares, Participant shall comply with all regulations and requirements of any regulatory authority having control or supervision over the issuance of the Aggregate Restricted Shares and, in connection therewith, shall execute any documents and make any representation and warranty to the Company which the Committee shall in its sole discretion deem necessary or advisable. 8. Taxable Income. Participant may file an election for immediate Federal income taxation pursuant to Section 83(b) of the Internal Revenue Code. In the event that Participant makes an election pursuant to Section 83(b) of the Code, Participant agrees to notify the Company thereof in writing within ten (10) days after such election; any necessary withholding at the time of an 83(b) election must not be made from Vested Shares, but must be a cash withholding, from either wages or a separate payment. THE FEDERAL INCOME TAX CONSEQUENCES DESCRIBED ABOVE ARE FOR GENERAL INFORMATION ONLY. EACH PARTICIPANT SHOULD CONSULT A TAX ADVISOR AS TO THE SPECIFIC FEDERAL INCOME TAX CONSEQUENCES AND AS TO THE SPECIFIC CONSEQUENCES UNDER STATE, LOCAL AND FOREIGN TAX LAWS. 9. Withholding with Stock. Unless specifically denied by the Committee, Participant may elect to pay all minimum required amounts of tax withholding, or any part thereof, by electing to transfer to the Company, Vested Shares from the same tranche having a value equal to the statutory minimum amount required to be withheld under federal, state or local law or such lesser amount as may be elected by the Participant. The value of such Shares to be transferred to the Company shall be based on the Fair Market Value of the Stock on the date that the amount of tax to be withheld is to be determined (the "Tax Date"), as determined by the Committee. Any election by the Participant to have such Shares withheld for this purpose will be subject to the following restrictions: (a) All elections must be made prior to the Tax Date; (b) All elections shall be irrevocable; and (c) If Participant is an officer or director of the Company within the meaning of Section 16 of the 1934 Act ("Section 16"), the Participant must satisfy the requirements of Section 16 and any applicable rules thereunder with respect to the use of Stock to satisfy such tax withholding obligation. 10. Notices. Any notices or other communications required or allowed to be made or given to the Company under the terms of this Agreement shall be addressed to the Company in care of its President at its offices at 2800 Rockcreek Parkway, North Kansas City, Missouri 64117, and any notice to be given to the Participant shall be addressed to the Participant at the address set forth on the Front. Either party hereto may from time-to-time change the address to which notices are to be sent to such party by giving written notice of such change to the other party. Any notice hereunder shall be deemed to have been duly given five (5) business days after registered and deposited, postage and registry fee prepaid, in a post office regularly maintained by the United States government. 11. Binding Effect and Assignment. This Agreement shall bind the parties hereto, but shall not be assignable by Participant. 12. Governing Law. This Agreement shall be construed in accordance with the laws of the State of Missouri. This Agreement has been issued by the Company by its duly authorized representatives and shall be effective as of the day and year written on the Front.

EX-10.(V)

EX-10.(Y)

Exhibit 10(y)

To:     Clifford W. Illig

RE:     Notice of Change of Aircraft Provided Under Time Sharing Agreement (“Notice”)

This Notice is provided under the Aircraft Time Sharing Agreement dated February 7, 2007, between Cerner Corporation as Operator and Clifford W. Illig as User (the “Agreement”). Please be advised of the following changes to the Aircraft provided under the Agreement:

1. As of December 20, 2011, that certain Hawker 900XP aircraft, manufacturer's serial number HA-195, bearing United States Registration Number N979CF is added.

Each of the aircraft provided under the Agreement shall be referred to as the “Aircraft”.

TRUTH IN LEASING STATEMENT UNDER SECTION 91.23 (FORMERLY 91.54) OF THE FEDERAL AVIATION REGULATIONS.

(A)    CERNER CORPORATION (“OPERATOR”) HEREBY CERTIFIES THAT IN ACCORDANCE WITH THE PROVISIONS OF FAR PART 91, THE AIRCRAFT HAS BEEN INSPECTED AND MAINTAINED WITHIN THE 12 MONTH PERIOD PRECEDING THE DATE OF THIS AGREEMENT OR, IF THE AIRCRAFT IS LESS THAN 12 MONTHS OLD, SINCE NEW AND ALL APPLICABLE REQUIREMENTS FOR THE MAINTENANCE AND INSPECTION THEREUNDER HAVE BEEN MET.

(B)    CERNER CORPORATION (“OPERATOR”) AGREES, CERTIFIES AND KNOWINGLY ACKNOWLEDGES THAT WHEN THE AIRCRAFT IS OPERATED UNDER THIS AGREEMENT, IT SHALL BE KNOWN AS, CONSIDERED, AND SHALL IN FACT BE THE OPERATOR OF THE AIRCRAFT.

(C)    AN EXPLANATION OF FACTORS AND PERTINENT FEDERAL AVIATION REGULATIONS BEARING ON OPERATIONAL CONTROL CAN BE OBTAINED FROM THE LOCAL FLIGHT STANDARDS DISTRICT OFFICE. OPERATOR FURTHER CERTIFIES THAT IT WILL SEND A TRUE COPY OF THIS EXECUTED AGREEMENT TO: FEDERAL AVIATION ADMINISTRATION, AIRCRAFT REGISTRATION BRANCH, ATTN: TECHNICAL SECTION, P. O. BOX 25724, OKLAHOMA CITY, OKLAHOMA, 73125, WITHIN 24 HOURS OF ITS EXECUTION, AS PROVIDED BY FAR 91.23(c)(1).

Sincerely,

Cerner Corporation (Operator)

By: /s/ Marc G. Naughton

Name:    Marc G. Naughton

Title: Executive Vice President & CFO

EX-10.(Z)

Exhibit 10(z)

CERNER CORPORATION

AMENDED AND RESTATED AIRCRAFT TIME SHARING AGREEMENT

This Amended and Restated Aircraft Time Sharing Agreement (the Agreement), is made and entered into this 1st day of February, 2013, by and between Cerner Corporation, with a principal address of 2800 Rockcreek Parkway, North Kansas City, Missouri 64117 (Operator), and Neal L. Patterson (User).

WITNESSETH, that

WHEREAS, Operator operates the following aircrafts: (i) that certain Hawker 900XP aircraft, manufacturer's serial number HA-195 bearing the United States Registration Number N979CF, (ii) that certain Hawker 400XP model 400A aircraft, manufacturer's serial number RK-570 bearing the United States Registration Number N979CM, and (iii) that certain Hawker 4000 aircraft, manufacturer's serial number RC-28 bearing the United States Registration Number N979TM (collectively, the Aircraft);

WHEREAS, Operator employs a fully qualified flight crew to operate the Aircraft; and

WHEREAS, Operator desires to lease said Aircraft with flight crew to User and User desires to lease said Aircraft and flight crew from Operator on a time sharing basis pursuant to Section 91.501(c)(1) of the Federal Aviation Regulations (“FARs”).

NOW THEREFORE, Operator and User declaring their intention to enter into and be bound by this Agreement, and for the good and valuable consideration set forth below, hereby covenant and agree as follows:

1.    Operator agrees to lease the Aircraft to User pursuant to the provisions of FAR 91.501(c)(1) and to provide a fully qualified flight crew for all operations on a non-continuous basis commencing on the first date set forth hereinabove and continuing unless and until terminated. Either party may terminate this Agreement by giving thirty (30) days written notice to the other party. Operator shall have the right to add or substitute aircraft of similar type, quality and equipment, and to remove aircraft from the fleet, from time to time during the term of this Agreement.

2.    User shall pay Operator for each flight conducted under this Agreement the actual expenses of each specific flight as described in FAR 91.501(d)(a)-(i), including the actual expense items of any “deadhead” flights made for User, as authorized by FAR Part 91.501(d). The expenses authorized by FAR Part 91.501(d)(a)-(i) include:

(a) Fuel, oil, lubricants, and other additives.

(b) Travel expenses of the crew, including food, lodging and ground transportation.

1

(c) Hangar and tie down costs away from the aircraft's base of operation.

(d) Insurance obtained for the specific flight.

(e) Landing fees, airport taxes and similar assessments.

(f) Customs, foreign permit, and similar fees directly related to the flight.

(g) In-flight food and beverages.

(h) Passenger ground transportation.

(i) Flight planning and weather contract services.

3.    Operator will pay all expenses related to the operation of the Aircraft when incurred, and will provide an invoice and bill User for the expenses enumerated in paragraph 2 above on the last day of the month in which any flight or flights for the account of User occur. User shall pay Operator for said expenses within fifteen (15) days of receipt of the invoice and bill therefore.

User shall include with each payment any federal transportation excise tax due with respect to such payment, and Operator shall be responsible for collecting, reporting and remitting such tax to the U.S. Internal Revenue Service.

4.    User will provide Operator with requests for flight time and proposed flight schedules as far in advance of any given flight as possible. Requests for flight time and proposed flight schedules shall be made in compliance with Operator's scheduling procedures and aircraft use policies. In addition to proposed schedules and flight times, User shall provide at least the following information for each proposed flight at some time prior to scheduled departure as required by the Operator or Operator's flight crew.

(a) proposed departure point;

(b) destination;

(c) date and time of flight;

(d) the number of anticipated passengers;

(e) the nature and extent of unusual luggage and/or cargo to be carried;

(f) the date and time of a return flight, if any; and

2

(g) any other information concerning the proposed flight that may be pertinent or required by Operator or Operators flight crew.

5.    Operator shall pay all expenses related to the ownership and operation of the Aircraft and shall employ, pay for and provide to User a qualified flight crew for each flight undertaken under this Agreement.

6.    Operator shall be solely responsible for securing maintenance, preventive maintenance and required or otherwise necessary inspections on the Aircraft, and shall take such requirements into account in scheduling the Aircraft. No period of maintenance, preventive maintenance or inspection shall be delayed or postponed for the purpose of scheduling the Aircraft, unless said maintenance or inspection can be safely conducted at a later time in compliance with all applicable laws and regulations, and within the sound discretion of the pilot in command. The pilot in command shall have final and complete authority to cancel any flight for any reason or condition which in his/her judgment would compromise the safety of the flight.

7.    In accordance with applicable Federal Aviation Regulations, the flight crew will exercise all of its duties and responsibilities in regard to the safety of each flight conducted hereunder. User specifically agrees that the pilot in command, in his/her sole discretion, may terminate any flight, refuse to commence any flight, or take other action which in the considered judgment of the pilot in command is necessitated by considerations of safety. The parties agree that Operator shall not be liable for delay or failure to furnish the Aircraft and crew member pursuant to this Agreement when such failure is caused by government regulation or authority, mechanical difficulty, war, civil commotion, strikes or labor disputes, weather conditions, or acts of God. Operator shall have sole and exclusive authority over the scheduling of the Aircraft.

8.    Operator will use reasonable efforts to provide additional insurance coverage as User shall request, provided, however: i) Operator is not required to provide such requested coverage, and ii) that the cost of such additional insurance shall be borne by User as set forth in paragraph 2(d) hereof.

9.    Each party hereto agrees to indemnify and hold harmless the other against all losses, including costs, attorneys' fees and expenses by reason of claims by third parties for injury to or death of persons and loss of or damage to property arising out of or in any manner connected with the performance of such party's responsibilities under this Agreement or any breach by such party of any covenant or warranty made herein. Operator and User agree that in the event either party shall be liable to the other for any reason relating to this Agreement, that under no circumstances shall the damaged party be entitled to any special or consequential damages, including but not limited to damages for lost profits, incurred by the damaged party.

10. The Operator and User agree that Operator shall not be liable to User or any other person for loss, injury, or damage occasioned by the delay or failure to furnish the Aircraft and crew pursuant to this Agreement for any reason.

11. The risk of loss during the period when any Aircraft is operated on behalf of User

3

under this Agreement shall remain with Operator, and Operator will retain all rights and benefits with respect to the proceeds payable under policies of hull insurance maintained by Operator that may be payable as a result of any incident or occurrence while an Aircraft is being operated on behalf of User under this Agreement. User shall be named as an additional insured on liability insurance policies maintained by Operator on the Aircraft with respect to flights conducted pursuant to this Agreement. The liability insurance policies on which User is named an additional insured shall provide that as to User coverage shall not be invalidated or adversely affected by any action or inaction, omission or misrepresentation by Operator or any other person (other than User). Any hull insurance policies maintained by Operator on any Aircraft used by User under this Agreement shall include a waiver of any rights of subrogation of the insurers against User.

12. A copy of this Agreement shall be carried in the Aircraft and available for review upon the request of the FAA on all flights conducted pursuant to this Agreement.

13.    User warrants that:

(a) He will use the Aircraft for and on account of his own business only, and will not use the Aircraft for the purposes of providing transportation for passengers or cargo in air commerce for compensation or hire;

(a) During the term of this Agreement, he will abide by and conform to all such laws, governmental and airport orders, rules and regulations, as shall from time to time be in effect relating in any way to their operation and use of the Aircraft by a time sharing User;

(b) He shall refrain from incurring any mechanics or other lien in connection with inspection, preventative maintenance, maintenance or storage of the Aircraft, whether permissible or impermissible under this Agreement, and he shall not attempt to convey, mortgage, assign, lease or any way alienate the Aircraft or create any kind of lien or security interest involving the Aircraft or do anything or take any action that might mature into such a lien.

14.    Neither this Agreement nor any party's interest herein shall be assignable to any other party. This Agreement shall inure to the benefit of and be binding upon the parties hereto, their heirs, representatives and successors.

15.    Nothing herein shall be construed to create a partnership, joint venture, franchise, employer-employee relationship or to create any relationship of principal and agent.

16.    This Agreement shall be governed by and construed in accordance with the laws of the State of Missouri (excluding the conflicts of law rules thereof).

17.    Neither Operator (nor its affiliates) makes, has made or shall be deemed to make or have made, and Operator (for itself and its affiliates) hereby disclaims, any warranty or

4

representation, either express or implied, written or oral, with respect to any aircraft to be used hereunder or any engine or component thereof including, without limitation, any warranty as to design, compliance with specifications, quality of materials or workmanship, merchantability, fitness for any purpose, use or operation, airworthiness, safety, patent, trademark or copyright infringement or title.

[Remainder of Page Intentionally Left Blank]

5

IN WITNESS WHEREOF, the parties hereto have caused the signatures of their authorized representatives to be affixed below on the day and year first above written. The persons signing below warrant their authority to sign.

TRUTH IN LEASING STATEMENT UNDER SECTION 91.23 (FORMERLY 91.54) OF THE FEDERAL AVIATION REGULATIONS.

(A)    CERNER CORPORATION (“OPERATOR”) HEREBY CERTIFIES THAT THE AIRCRAFT HAS BEEN INSPECTED AND MAINTAINED WITHIN THE 12 MONTH PERIOD PRECEDING THE DATE OF THIS AGREEMENT IN ACCORDANCE WITH THE PROVISIONS OF FAR PART 91 AND ALL APPLICABLE REQUIREMENTS FOR THE MAINTENANCE AND INSPECTION THEREUNDER HAVE BEEN MET.

(B)    CERNER CORPORATION (“OPERATOR”) AGREES, CERTIFIES AND KNOWINGLY ACKNOWLEDGES THAT WHEN THE AIRCRAFT IS OPERATED UNDER THIS AGREEMENT, IT SHALL BE KNOWN AS, CONSIDERED, AND SHALL IN FACT BE THE OPERATOR OF THE AIRCRAFT.

(C)    THE PARTIES UNDERSTAND THAT AN EXPLANATION OF FACTORS AND PERTINENT FEDERAL AVIATION REGULATIONS BEARING ON OPERATIONAL CONTROL CAN BE OBTAINED FROM THE LOCAL FLIGHT STANDARDS DISTRICT OFFICE. OPERATOR FURTHER CERTIFIES THAT IT WILL SEND A TRUE COPY OF THIS EXECUTED AGREEMENT TO: Federal Aviation Administration, Aircraft Registration Branch, ATTN: Technical Section, P. O. BOX 25724, OKLAHOMA CITY, OKLAHOMA, 73125, WITHIN 24 HOURS OF ITS EXECUTION, AS PROVIDED BY FAR 91.23(c)(1).

Operator:    /s/Marc G. Naughton                User:    /s/Neal L. Patterson    

By:        Cerner Corporation                By:    Neal L. Patterson

Name:                        

Title:        CFO            

A copy of this Agreement must be carried in the Aircraft while being operated hereunder.

6

EX-21

Exhibit 21

SUBSIDIARIES OF REGISTRANT
Name	State/Country of Incorporation
1.   Cerner Campus Redevelopment Corporation	Missouri
2.   Cerner Canada Limited	Delaware
3.   Cerner Capital, Inc.	Delaware
4.   Cerner Chile Limitada	Chile
5.   Cerner Chouteau Data Center, Inc.	Delaware
6.   Cerner Corporation PTY Limited	New South Wales (Australia)
7.   Cerner Deutschland GmbH	Germany
8.   Cerner Egypt L.L.C	Egypt
9.   Cerner France SAS	France
10. Cerner Galt, Inc.	Delaware
11. Cerner Healthcare Solutions, Inc.	Delaware
12. Cerner Healthcare Solutions Private Limited	India
13. Cerner Health Connections, Inc.	Delaware
14. Cerner Iberia, S.L.	Spain
15. Cerner India Sales Private Limited	India
16. Cerner Innovation, Inc.	Delaware
17. Cerner International, Inc.	Delaware
18. Cerner Ireland Limited	Ireland
19. Cerner Limited	United Kingdom
20. Cerner Lingologix, Inc.	Delaware
21. Cerner Math, Inc.	Delaware
22. Cerner México, S. de R. L. de C.V.	Mexico
23. Cerner Middle East FZ-LLC	Emirate of Dubai, UAE
24. Cerner Middle East, Ltd.	Cayman Islands
25. Cerner Multum, Inc.	Delaware
26. Cerner Properties, Inc.	Delaware
27. Cerner Singapore Limited	Delaware
28. Cerner Soluções para a Saúde Ltda.	Brazil
29. Cerner (Malaysia) SDN BHD	Malaysia
30. The Health Exchange, Inc.	Missouri
31. Rockcreek Aviation, Inc.	Delaware

EX-23

Exhibit 23

Consent of Independent Registered Public Accounting Firm

The Board of Directors

Cerner Corporation:

We consent to the incorporation by reference in the Registration Statements (No. 333-180016, No. 333-174568, No. 333-125492, No. 333-77029, No. 333-93379, No. 333-24899, No. 333-24909, No. 333-75308, No. 333-70170, No. 33-63226, No. 33-56868, No. 33-55082, No. 33-41580, No. 33-39777, No. 33-39776, No. 33-20155, No. 33-15156, and No. 333-40156) on Form S-8 and (No. 333-72024 and No. 333-40156) on Form S-4 of Cerner Corporation of our reports dated February 8, 2013, with respect to the consolidated balance sheets of Cerner Corporation and subsidiaries as of December 29, 2012 and December 31, 2011, and the related consolidated statements of operations, comprehensive income, changes in shareholders' equity, and cash flows for each of the years in the three-year period ended December 29, 2012, and the related consolidated financial statement schedule, and the effectiveness of internal control over financial reporting as of December 29, 2012, which reports appear in the 2012 Annual Report on Form 10-K of Cerner Corporation.

/s/ KPMG LLP

Kansas City, Missouri

February 8, 2013

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Neal L. Patterson, certify that:

1. I have reviewed this annual report on Form 10-K for the year ended December 29, 2012 of Cerner Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)         designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)         designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)         evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)         disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)         all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)         any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: February 8, 2013	/s/Neal L. Patterson
	Neal L. Patterson
	Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Marc G. Naughton, certify that:

1. I have reviewed this annual report on Form 10-K for the year ended December 29, 2012 of Cerner Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)         designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)         designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)         evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)         disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)         all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)         any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: February 8, 2013	/s/Marc G. Naughton
	Marc G. Naughton
	Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION FURNISHED PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the filing of the Annual Report on Form 10-K for the fiscal year ended December 29, 2012 (the Report) by Cerner Corporation (the Company), the undersigned Chief Executive Officer of the Company hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/Neal L. Patterson                              

Neal L. Patterson, Chairman of the Board,

Chief Executive Officer and President

Dated: February 8, 2013

A signed original of this written statement required by Section 906 has been provided to Cerner Corporation and will be retained by Cerner Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION FURNISHED PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the filing of the Annual Report on Form 10-K for the fiscal year ended December 29, 2012 (the Report) by Cerner Corporation (the Company), the undersigned Chief Financial Officer of the Company hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/Marc G. Naughton                                

Marc G. Naughton, Executive Vice President,

Treasurer and Chief Financial Officer

Dated: February 8, 2013

A signed original of this written statement required by Section 906 has been provided to Cerner Corporation and will be retained by Cerner Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Indebtedness (Tables)

12 Months Ended

Dec. 29, 2012

Debt Disclosure [Abstract]

Schedule of Indebtedness Outstanding

The following is a summary of indebtedness outstanding:

(In thousands)	2012			2011
Note agreement, 5.54%	$	45,045		$	57,683
Senior Notes, Series B, 6.42%	9,750			9,750
Capital lease obligations	141,344			58,995
Other obligations	—			115
Total debt and capital lease obligations	196,139			126,543
Less: current portion	(59,582		)	(39,722		)
Long-term debt and capital lease obligations	$	136,557		$	86,821

Schedule of Minimum Annual Payments Under Capital Lease Obligation and Maturities of Indebtedness

Minimum annual payments under existing capital lease obligations and maturities of indebtedness at the end of 2012 are as follows:

	Capital Lease Obligations
(In thousands)	Minimum Lease Payments		Less: Interest		Principal		Principal Amount of Indebtedness		Total
2013	$	38,717	$	3,900	$	34,817	$	24,765	$	59,582
2014	35,715		2,855		32,860		15,015		47,875
2015	33,792		1,767		32,025		15,015		47,040
2016	30,803		589		30,214		—		30,214
2017	11,522		94		11,428		—		11,428
Total	$	150,549	$	9,205	$	141,344	$	54,795	$	196,139

XML

Investments (Details) (USD $) In Thousands, unless otherwise specified	Dec. 29, 2012
Schedule of Available-for-sale Securities [Line Items]
Adjusted Cost	$ 1,314,641
Gross Unrealized Gains	863
Gross Unrealized Losses	(537)
Fair Value	1,314,967
Cash equivalents [Member]
Schedule of Available-for-sale Securities [Line Items]
Adjusted Cost	92,335
Gross Unrealized Gains
Gross Unrealized Losses
Fair Value	92,335
Cash equivalents [Member] | Money market funds [Member]
Schedule of Available-for-sale Securities [Line Items]
Adjusted Cost	68,267
Gross Unrealized Gains
Gross Unrealized Losses
Fair Value	68,267
Cash equivalents [Member] | Time deposits [Member]
Schedule of Available-for-sale Securities [Line Items]
Adjusted Cost	24,068
Gross Unrealized Gains
Gross Unrealized Losses
Fair Value	24,068
Short-term investments [Member]
Schedule of Available-for-sale Securities [Line Items]
Adjusted Cost	719,271
Gross Unrealized Gains	529
Gross Unrealized Losses	(135)
Fair Value	719,665
Short-term investments [Member] | Time deposits [Member]
Schedule of Available-for-sale Securities [Line Items]
Adjusted Cost	90,535
Gross Unrealized Gains	17
Gross Unrealized Losses	(2)
Fair Value	90,550
Short-term investments [Member] | Commercial paper [Member]
Schedule of Available-for-sale Securities [Line Items]
Adjusted Cost	86,500
Gross Unrealized Gains	15
Gross Unrealized Losses	(57)
Fair Value	86,458
Short-term investments [Member] | Government and corporate bonds [Member]
Schedule of Available-for-sale Securities [Line Items]
Adjusted Cost	542,236
Gross Unrealized Gains	497
Gross Unrealized Losses	(76)
Fair Value	542,657
Long-term investments [Member]
Schedule of Available-for-sale Securities [Line Items]
Adjusted Cost	503,035
Gross Unrealized Gains	334
Gross Unrealized Losses	(402)
Fair Value	502,967
Long-term investments [Member] | Time deposits [Member]
Schedule of Available-for-sale Securities [Line Items]
Adjusted Cost	6,190
Gross Unrealized Gains	10
Gross Unrealized Losses	(3)
Fair Value	6,197
Long-term investments [Member] | Government and corporate bonds [Member]
Schedule of Available-for-sale Securities [Line Items]
Adjusted Cost	496,845
Gross Unrealized Gains	324
Gross Unrealized Losses	(399)
Fair Value	$ 496,770

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Schedule II Schedule of Valuation and Qualifying Accounts (Tables)

12 Months Ended

Dec. 29, 2012

Valuation and Qualifying Accounts [Abstract]

Schedule of Valuation and Qualifying Accounts Disclosure [Text Block]

For the years ended December 29, 2012, December 31, 2011 and January 1, 2011

(In thousands)	Balance at Beginning of Period		Additions Charged to Costs and Expenses	Additions Through Acquisitions and Consolidation of Variable Interest Entity	Deductions		Balance at End of Period
Description
2010
Doubtful Accounts and Sale Allowances	$	16,895	9,856	—	(11,201	)	$	15,550
2011
Doubtful Accounts and Sale Allowances	$	15,550	11,365	31	(2,676	)	$	24,270
2012
Doubtful Accounts and Sale Allowances	$	24,270	13,483	8	(4,531	)	$	33,230

Schedule II

CERNER CORPORATION

VALUATION AND QUALIFYING ACCOUNTS

For the years ended December 29, 2012, December 31, 2011 and January 1, 2011

(In thousands)	Balance at Beginning of Period		Additions Charged to Costs and Expenses	Additions Through Acquisitions and Consolidation of Variable Interest Entity	Deductions		Balance at End of Period
Description
2010
Doubtful Accounts and Sale Allowances	$	16,895	9,856	—	(11,201	)	$	15,550
2011
Doubtful Accounts and Sale Allowances	$	15,550	11,365	31	(2,676	)	$	24,270
2012
Doubtful Accounts and Sale Allowances	$	24,270	13,483	8	(4,531	)	$	33,230

See accompanying report of independent registered public accounting firm.

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Indebtedness (Schedule of Indebtedness Outstanding) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 29, 2012	Dec. 31, 2011
Debt Instrument [Line Items]
Total debt and capital lease obligations	$ 196,139	$ 126,543
Less: current portion	(59,582)	(39,722)
Long-term debt and capital lease obligations	136,557	86,821
Note agreement, 5.54%
Debt Instrument [Line Items]
Total debt and capital lease obligations	45,045	57,683
Senior Notes, Series B, 6.42%
Debt Instrument [Line Items]
Total debt and capital lease obligations	9,750	9,750
Capital lease obligations
Debt Instrument [Line Items]
Total debt and capital lease obligations	141,344	58,995
Other obligations [Member]
Debt Instrument [Line Items]
Total debt and capital lease obligations	$ 0	$ 115

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Fair Value Measurements (Narrative) (Details) (USD $)	Dec. 29, 2012	Dec. 31, 2011
Fair Value Disclosures [Abstract]
Fair value of long-term debt, including current maturities	$ 59,000,000	$ 72,600,000
Carrying amount of long-term debt	$ 54,795,000	$ 67,500,000

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Income Taxes (Schedule of Deferred Tax Assets and Deferred Tax Liabilities) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 29, 2012	Dec. 31, 2011
Deferred tax assets:
Accrued expenses	$ 20,346	$ 18,597
Separate return net operating losses	21,412	16,757
Share based compensation	35,323	26,462
Contract and service revenues and costs	17,339	25,022
Other	6,890	5,410
Total deferred tax assets	101,310	92,248
Deferred tax liabilities:
Software development costs	(101,393)	(91,267)
Depreciation and amortization	(96,695)	(85,746)
Other	(5,537)	(4,029)
Total deferred tax liabilities	(203,625)	(181,042)
Net deferred tax liability	$ (102,315)	$ (88,794)

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Segment Reporting (Tables)

12 Months Ended

Dec. 29, 2012

Segment Reporting [Abstract]

Summary of the Operating Information

The following table presents a summary of our operating segments and other expense for 2012, 2011 and 2010:

(In thousands)	Domestic		Global		Other			Total
2012
Revenues	$	2,341,304	$	324,132	$	—		$	2,665,436
Cost of revenues	548,813		59,384		—			608,197
Operating expenses	506,249		131,580		847,748			1,485,577
Total costs and expenses	1,055,062		190,964		847,748			2,093,774
Operating earnings (loss)	$	1,286,242	$	133,168	$	(847,748	)	$	571,662

(In thousands)	Domestic		Global		Other			Total
2011
Revenues	$	1,894,454	$	308,699	$	—		$	2,203,153
Cost of revenues	387,466		54,206		—			441,672
Operating expenses	439,465		126,997		735,221			1,301,683
Total costs and expenses	826,931		181,203		735,221			1,743,355
Operating earnings (loss)	$	1,067,523	$	127,496	$	(735,221	)	$	459,798

(In thousands)	Domestic		Global		Other			Total
2010
Revenues	$	1,562,563	$	287,659	$	—		$	1,850,222
Cost of revenues	272,385		47,971		—			320,356
Operating expenses	417,181		124,546		628,806			1,170,533
Total costs and expenses	689,566		172,517		628,806			1,490,889
Operating earnings (loss)	$	872,997	$	115,142	$	(628,806	)	$	359,333

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Investments Investments (Tables)

12 Months Ended

Dec. 29, 2012

Investments [Abstract]

Schedule of available-for-sale investments

Available-for-sale investments at the end of 2012 were as follows:

(In thousands)	Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Cash equivalents:
Money market funds	$	68,267	$	—	$	—		$	68,267
Time deposits	24,068		—		—			24,068
Total cash equivalents	92,335		—		—			92,335
Short-term investments:
Time deposits	90,535		17		(2		)	90,550
Commercial paper	86,500		15		(57		)	86,458
Government and corporate bonds	542,236		497		(76		)	542,657
Total short-term investments	719,271		529		(135		)	719,665
Long-term investments:
Time deposits	6,190		10		(3		)	6,197
Government and corporate bonds	496,845		324		(399		)	496,770
Total long-term investments	503,035		334		(402		)	502,967
Total available-for-sale investments	$	1,314,641	$	863	$	(537	)	$	1,314,967

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Income Taxes (Schedule of Effective Income Tax Rate Reconciliation) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 29, 2012	Dec. 31, 2011	Jan. 01, 2011
Income Tax Disclosure [Abstract]
Tax expense at statutory rates	$ 205,698	$ 164,393	$ 126,744
State income tax, net of federal benefit	13,856	11,439	10,151
Tax credits	(1,510)	(5,520)	(10,568)
Unrecognized tax benefit (including interest)	(12,832)	102	7,501
Permanent differences	(19,900)	(2,472)	(4,629)
Other, net	5,164	(4,875)	(4,259)
Total income tax expense	$ 190,476	$ 163,067	$ 124,940

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Hedging Activities (Fair Value Of Net Investment Hedge Within Condensed Consolidated Balance Sheets And Unrealized Gain Or Loss) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 29, 2012	Dec. 31, 2011
Derivatives, Fair Value [Line Items]
Fair value	$ 45,045	$ 57,683
Net unrealized loss	1,432	1,514
Short-term liabilities
Derivatives, Fair Value [Line Items]
Fair value	15,015	14,421
Net unrealized loss	451	133
Long-term liabilities
Derivatives, Fair Value [Line Items]
Fair value	30,030	43,262
Net unrealized loss	$ 981	$ 1,381

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Foundations Retirement Plan (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 29, 2012	Dec. 31, 2011	Jan. 01, 2011
First Tier Discretionary Match [Member]
Defined Contribution Plan Disclosure [Line Items]
Defined Contribution Plan, Cost Recognized	$ 12.3	$ 10.5	$ 8.9
Second Tier Discretionary Match [Member]
Defined Contribution Plan Disclosure [Line Items]
Defined Contribution Plan, Cost Recognized	$ 11.9	$ 10.5	$ 8.9

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Fair Value Measurements (Fair Value Of Financial Assets) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011
Level 1 [Member] | Money market funds [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and Cash Equivalents, Fair Value Disclosure	$ 123,919
Level 2 [Member] | Time deposits [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and Cash Equivalents, Fair Value Disclosure	7,358
Short-term investments [Member] | Level 2 [Member] | Time deposits [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Held-to-maturity Securities, Fair Value Disclosure	67,632
Short-term investments [Member] | Level 2 [Member] | Commercial paper [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Held-to-maturity Securities, Fair Value Disclosure	23,250
Short-term investments [Member] | Level 2 [Member] | Government and corporate bonds [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Held-to-maturity Securities, Fair Value Disclosure	440,753
Long-term investments [Member] | Level 2 [Member] | Time deposits [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Held-to-maturity Securities, Fair Value Disclosure	19,579
Long-term investments [Member] | Level 2 [Member] | Government and corporate bonds [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Held-to-maturity Securities, Fair Value Disclosure	$ 337,245

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Income Taxes (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 29, 2012	Dec. 31, 2011	Jan. 01, 2011
Operating Loss Carryforwards [Line Items]
Cumulative undistributed earnings of foreign subsidiaries	$ 82
Effective tax rate	32.00%	35.00%	34.00%
Federal statutory income tax rate	35.00%
Change in unrecognized tax benefits in next 12 months	We do not expect to recognize any material portion of our unrecognized tax benefits in the next 12 months
Last year examined	Our federal returns have been examined by the Internal Revenue Service through 2009
Accrued interest related to unrecognized tax benefits	0.1	0.9
Internal Revenue Service (IRS) [Member]
Operating Loss Carryforwards [Line Items]
Operating Loss Carryforwards	7.4
Operating Loss Carryforwards, Expiration Dates	2020
Foreign Tax Authority [Member]
Operating Loss Carryforwards [Line Items]
Operating Loss Carryforwards	0.9
Operating Loss Carryforwards, Expiration Dates	2024
Foreign Tax Authority [Member] | No Expiration Date [Member]
Operating Loss Carryforwards [Line Items]
Operating Loss Carryforwards	59.8
State and Local Jurisdiction [Member]
Operating Loss Carryforwards [Line Items]
Operating Loss Carryforwards	$ 0.9
Operating Loss Carryforwards, Expiration Dates	2032

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Share-Based Compensation (Schedule of Weighted Average Grant Date Fair Values of Options Granted in Period and Other Disclosures) (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 29, 2012	Dec. 31, 2011	Jan. 01, 2011
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Weighted-average grant date fair value	$ 37.04	$ 28.89	$ 22.42
Total intrinsic value of options exercised	$ 152,117	$ 117,601	$ 88,876
Cash received from exercise of stock options	38,147	38,900	34,724
Tax benefit realized upon exercise of stock options	$ 55,952	$ 44,908	$ 33,802

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Earnings Per Share (Reconciliation Of The Numerators And The Denominators Of The Basic And Diluted Per Share) (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 29, 2012	Sep. 29, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Oct. 01, 2011	Jul. 02, 2011	Apr. 02, 2011	Dec. 29, 2012	Dec. 31, 2011	Jan. 01, 2011
Earnings Per Share [Abstract]
Income available to common shareholders, basic									$ 397,232	$ 306,627	$ 237,272
Income available to common shareholders including assumed conversions, diluted									$ 397,232	$ 306,627	$ 237,272
Basic weighted average shares outstanding									170,931	168,634	164,916
Stock options and non-vested shares, incremental shares									4,766	5,233	5,931
Diluted weighted average shares outstanding									175,697	173,867	170,847
Basic earnings per share	$ 0.65	$ 0.58	$ 0.57	$ 0.52	$ 0.54	$ 0.47	$ 0.43	$ 0.38	$ 2.32	$ 1.82	$ 1.44
Diluted earnings per share	$ 0.63	$ 0.56	$ 0.56	$ 0.51	$ 0.52	$ 0.45	$ 0.42	$ 0.37	$ 2.26	$ 1.76	$ 1.39

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Share-Based Compensation (Schedule Of Non-Vested Shares Activity) (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 29, 2012	Dec. 31, 2011	Jan. 01, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted, weighted-average grant date fair value	$ 76.55	$ 54.07	$ 41.09
Total fair value of shares vested during the year	$ 2,612	$ 2,527	$ 1,147
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding at beginning of year, number of shares	254
Outstanding at beginning of year, weighted-average grant date fair value	$ 47.75
Granted, number of shares	99
Granted, weighted-average grant date fair value	$ 76.55
Vested, number of shares	(52)
Vested, weighted-average grant date fair value	$ 50.24
Forfeited, number of shares	0
Forfeited, weighted-average grant date fair value	$ 0
Outstanding at end of year, number of shares	301
Outstanding at end of year, weighted-average grant date fair value	$ 56.82

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Income Taxes (Schedule of Components of Income Tax Expense (Benefit)) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 29, 2012	Dec. 31, 2011	Jan. 01, 2011
Current:
Federal	$ 164,690	$ 162,288	$ 85,106
State	13,302	19,061	10,355
Foreign	4,142	3,831	(883)
Total current expense	182,134	185,180	94,578
Deferred:
Federal	9,035	(15,927)	22,297
State	4,453	(5,410)	4,038
Foreign	(5,146)	(776)	4,027
Total deferred expense (benefit)	8,342	(22,113)	30,362
Total income tax expense	$ 190,476	$ 163,067	$ 124,940

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Indebtedness (Details) In Millions, unless otherwise specified	12 Months Ended		0 Months Ended	12 Months Ended		0 Months Ended	12 Months Ended
	Dec. 29, 2012 USD ($)	Dec. 20, 2002 USD ($)	Nov. 30, 2005 Note Agreement, 5.54% [Member] GBP (£)	Dec. 29, 2012 Note Agreement, 5.54% [Member]	Dec. 20, 2002 Senior Notes, Series A, 5.57% USD ($)	Dec. 20, 2002 Senior Note, Series B, 6.42% USD ($)	Dec. 29, 2012 Senior Note, Series B, 6.42%
Debt Instrument [Line Items]
Debt Instrument, Face Amount		$ 60.0	£ 65.0		$ 21.0	$ 39.0
Debt Instrument, Interest Rate, Stated Percentage			5.54%		5.57%	6.42%
Debt Instrument, Frequency of Periodic Payment			seven			four
Debt Instrument, Date of First Required Payment			Nov. 30, 2009			Dec. 31, 2009
Debt Instrument, Restrictive Covenants				The Note Agreement contains certain net worth and fixed charge coverage covenants and provides certain restrictions on our ability to borrow, incur liens, sell assets and pay dividends. We were in compliance with all covenants at the end of 2012.			The Note Agreement contains certain net worth and fixed charge coverage covenants and provides certain restrictions on our ability to borrow, incur liens, sell assets and pay dividends. We were in compliance with all covenants at the end of 2012.
Line of Credit Facility, Expiration Date	Feb. 09, 2017
Line of Credit Facility, Interest Rate Description	Interest is payable at a rate based on prime, LIBOR, or the U.S. federal funds rate, plus a spread that varies depending on the leverage ratios maintained
Line of Credit Facility, Covenant Terms	The agreement provides certain restrictions on our ability to borrow, incur liens, sell assets and pay dividends and contains certain cash flow and liquidity covenants. As of the end of 2012, we were in compliance with all debt covenants.
Line of Credit Facility, Maximum Borrowing Capacity	100.0
Letters of Credit Outstanding, Amount	14.3
Line of Credit Facility, Remaining Borrowing Capacity	$ 85.7

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Related Party Transactions

12 Months Ended

Dec. 29, 2012

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

During 2009, as part of our long-term space planning analysis, we determined that we would require additional office space for associates to accommodate our anticipated growth. We evaluated various sites in the Kansas City metropolitan area and negotiated with several different governmental entities regarding available incentives. Upon completion of this review, we decided to proceed with an office development in Wyandotte County, Kansas, which is part of the “Village West” development. In order to maximize available incentives, we agreed to pursue the Village West office development in conjunction with the development of an 18,000 seat, multi-sport stadium and related recreational athletic complex.

The Village West stadium complex was developed by Kansas Unified Development, LLC (the “Developer”), an entity controlled by Neal Patterson, Chairman of the Board of Directors, Chief Executive Officer and President of Cerner Corporation, and Clifford Illig, Vice Chairman of the Board of Directors of Cerner Corporation. Sporting Kansas City (“Sporting KC”) is the principal tenant of the stadium complex. OnGoal LLC (“OnGoal”), the owner of the Sporting KC professional soccer club, is also controlled by Messrs. Patterson and Illig.

The total construction and development cost of the office complex has been estimated to be approximately $170.0 million. The Company currentlybelieves it will receive incentives totaling approximately $82.0 million from the Developer, the Unified Government of Wyandotte County/Kansas City, Kansas (the “Unified Government”) and the Kansas Department of Commerce. Incentives from the Kansas Department of Commerce will include cash grants, tax exemptions and tax credits. The value of some of these incentives may ultimately increase or decrease depending upon the final capital invested and the number of new jobs created. We currently expect our net investment in the Village West office complex, after applying expected government incentives and payments from the Developer, to be approximately $88.0 million.

In connection with the Village West office complex development and the related incentives, we have entered into three agreements:

• Land Transfer and Specific Venture Agreement (the “Land Transfer Agreement”) dated January 19, 2010 with the Unified Government and the Developer,

• Workforce Services Training Agreement (the “Workforce Agreement”) dated January 20, 2010 with the Kansas Department of Commerce, as amended by the First Amendment to Workforce Services Training Agreement dated June 7, 2011, and

• Interparty Agreement dated January 19, 2010 with OnGoal and the Developer.

Pursuant to the Land Transfer Agreement, we acquired the land from the Unified Government with certain contingencies upon which the office complex is being constructed. The purchase price, equal to the site’s fair market value, is being paid by the Developer. In the second quarter of 2012, vertical construction began on the Village West office development. In connection with the commencement of vertical construction, contingencies were resolved and we recorded land contributed to the Company from the Unified Government at its appraisal value.

Pursuant to the Workforce Agreement, as amended, we agreed to establish positions for 4,500 employees with an average annual wage of at least $31.00 per hour. In consideration of this commitment, we have elected to receive up to $48.5 million from the Kansas Department of Commerce for project investment costs and employee training (the “IMPACT Award”). We can specify the date when the IMPACT Award will be distributed by the Kansas Department of Commerce, which must be by December 31, 2014. The State of Kansas has issued bonds in order to fund these incentives to us and has incurred costs of issuance and debt service obligations. We may be obligated to repay the Kansas Department of Commerce under the following circumstances:

• If we do not request distribution of all or part of the IMPACT Award, we must pay $64.9 million (which represents the Impact Award amount plus the state’s estimated issuance costs)(the “Gross Funded Amount”) less an amount equal to any IMPACT Award amount not received,

• If we fail to establish new jobs for at least 4,275 full time employees at the Village West office complex prior to December 31, 2017, we will repay an amount equal to $48.0 million multiplied by the shortfall of total new jobs created by us, which is 4,500 less the number of jobs created as of December 31, 2017, divided by 4,500 (the “MPI Repayment Amount”), and

• If we have not generated aggregate Kansas state tax withholdings from wages earned by new jobs at the Village West office complex of at least the Gross Funded Amount within 10 years after receiving the IMPACT Award, then we will repay the difference (the “Withholding Tax Repayment Amount”).

The MPI Repayment Amount is not due until 10 years after we first receive the IMPACT Award. Our total repayment obligations under the Workforce Agreement will not exceed the Withholding Tax Repayment Amount.

The Interparty Agreement provides that the Developer and OnGoal will be responsible for the repayment of any issuance costs plus the MPI Repayment Amount owed by us under the Workforce Agreement. The Developer and OnGoal will also indemnify and hold us harmless from and against any and all losses, costs, expenses, penalties and damages arising as a result of: a) the Developer’s failure to pay any sum that it has agreed to pay, or b) the Developer’s breach of any agreement with us which creates an obligation on our part for which the Developer has agreed to be responsible.

The Interparty Agreement further provides that the Developer or OnGoal will pay us a success fee of $4.0 million if the terms and conditions of the Workforce Agreement are satisfied so that no MPI Repayment Amounts or issuance costs are due by the Developer under the Workforce Agreement.

Pursuant to the Multi-Sport Stadium Specific Venture Agreement, the Developer, recognizing that the Unified Government relied on our jobs creation goals in its decision to provide incentives for the stadium complex, agreed to make ten annual “Office Payment Installments” to the Unified Government, each in the amount of approximately $3.0 million, commencing in 2017. The Office Payment Installments are intended to supplement the purchase prices paid to the Unified Government by the Developer for the stadium site and the office site. The Office Payment Installments may be reduced if the Developer meets certain conditions and if we commence construction of the office complex and meet the job creation goals.

We believe that the amount of government incentives that the Developer and OnGoal received, as well as the government incentives received by us, were materially increased due to the fact that we agreed to build our office complex in close proximity to the stadium complex. The independent members of our Board of Directors, acting as a committee, reviewed and unanimously approved the decision to proceed with the development of the Village West office complex in 2009. The independent Directors received advice from outside legal counsel, retained a consultant with real estate expertise regarding the transaction and were briefed on the structure of the various expansion options by members of management (other than Messrs. Patterson and Illig) at six separate meetings.

We entered into a Construction Coordinator Agreement dated January 20, 2012, as amended by Amendment No. 1 to the Construction Coordinator Agreement dated May 31, 2012, with GRAND Construction, LLC (“Coordinator”), a limited liability company owned in part by an entity controlled by Messrs. Patterson and Illig, to coordinate, supervise, schedule and assist with managing the development, design and construction of the Cerner Phase 1 and 2 Buildings and site at the Village West development. Under the agreement, we will pay Coordinator 2% of the total cost of the project (as specified in the agreement). We paid Coordinator $1.4 million in 2012. Based on management’s projected scope of services, it is anticipated that the total fees will be approximately $3.2 million, and paid over two years through April 2014. The independent members of the Company’s Board of Directors, acting as a committee, reviewed and unanimously approved the Construction Coordinator Agreement dated January 20, 2012.

Additionally, in June 2012, the Company entered into an agreement with Coordinator for a separate project to make improvements to a parking facility for future use by one of our office campuses. That project is complete, and we paid Coordinator $0.3 million.

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Basis of Presentation, Nature of Operations and Summary of Significant Accounting Policies Investments Policy (Details) (USD $)	12 Months Ended
	Dec. 29, 2012	Apr. 02, 2012
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Maximum Time Until Maturity of Long-term Available-for-Sale Investments	2 years 0 months 0 days
Held-to-maturity Securities, Transferred Security, at Carrying Value		$ 1,000,000,000
Held-to-maturity Securities, Transferred to Available-for-sale Securities, Unrealized Gain		700,000
Held-to-maturity Securities, Transferred to Available-for-sale Securities, Unrealized Loss		$ 700,000

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Income Taxes Income Taxes (Tables)

12 Months Ended

Dec. 29, 2012

Income Tax Disclosure [Abstract]

Schedule of Components of Income Tax Expense (Benefit)

Income tax expense (benefit) for 2012, 2011 and 2010 consists of the following:

	For the Years Ended
(In thousands)	2012			2011			2010
Current:
Federal	$	164,690		$	162,288		$	85,106
State	13,302			19,061			10,355
Foreign	4,142			3,831			(883		)
Total current expense	182,134			185,180			94,578
Deferred:
Federal	9,035			(15,927		)	22,297
State	4,453			(5,410		)	4,038
Foreign	(5,146		)	(776		)	4,027
Total deferred expense (benefit)	8,342			(22,113		)	30,362
Total income tax expense	$	190,476		$	163,067		$	124,940

Schedule of Deferred Tax Assets and Liabilities

Temporary differences between the financial statement carrying amounts and tax basis of assets and liabilities that give rise to significant portions of deferred income taxes at the end of 2012 and 2011 relate to the following:

(In thousands)	2012			2011
Deferred tax assets:
Accrued expenses	$	20,346		$	18,597
Separate return net operating losses	21,412			16,757
Share based compensation	35,323			26,462
Contract and service revenues and costs	17,339			25,022
Other	6,890			5,410
Total deferred tax assets	101,310			92,248
Deferred tax liabilities:
Software development costs	(101,393		)	(91,267		)
Depreciation and amortization	(96,695		)	(85,746		)
Other	(5,537		)	(4,029		)
Total deferred tax liabilities	(203,625		)	(181,042		)
Net deferred tax liability	$	(102,315	)	$	(88,794	)

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

The effective income tax rates for 2012, 2011, and 2010 were 32%, 35%, and 34%, respectively. These effective rates differ from the Federal statutory rate of 35% as follows:

	For the Years Ended
(In thousands)	2012			2011			2010
Tax expense at statutory rates	$	205,698		$	164,393		$	126,744
State income tax, net of federal benefit	13,856			11,439			10,151
Tax credits	(1,510		)	(5,520		)	(10,568		)
Unrecognized tax benefit (including interest)	(12,832		)	102			7,501
Permanent differences	(19,900		)	(2,472		)	(4,629		)
Other, net	5,164			(4,875		)	(4,259		)
Total income tax expense	$	190,476		$	163,067		$	124,940

Schedule of Unrecognized Tax Benefits Roll Forward [Table Text Block]

A reconciliation of the beginning and ending amount of unrecognized tax benefit is presented below:

(In thousands)	2012			2011		2010
Unrecognized tax benefit - beginning balance	$	14,640		$	14,100	$	6,599
Gross increases (decreases) - tax positions in prior periods	(12,464		)	540		—
Gross increases - current-period tax positions	—			—		7,501
Unrecognized tax benefit - ending balance	$	2,176		$	14,640	$	14,100

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Other Income Investment Gains (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 29, 2012
Other Nonoperating Income (Expense) [Abstract]
Cost-method Investments, Realized Gain (Loss)	$ 4.5

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Goodwill and Other Intangible Assets (Tables)

12 Months Ended

Dec. 29, 2012

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Changes in Carrying Amounts of Goodwill

The changes in the carrying amounts of goodwill were as follows:

(In thousands)	2012		2011
Beginning Balance	$	211,826	$	161,374
Goodwill recorded in connection with business acquisitions	35,281		51,100
Foreign currency translation adjustment and other	509		(648		)
Ending Balance	$	247,616	$	211,826

Schedule of Finite-Lived Intangible Assets

Our intangible assets subject to amortization are amortized on a straight-line basis, and are summarized as follows:

	2012				2011
(In thousands)	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Purchased software	$	153,330	$	67,178	$	94,963	$	55,305
Customer lists	90,376		62,403		77,513		58,259
Patents	10,877		4,562		10,298		2,997
Other	16,419		4,814		11,460		2,307
Total	$	271,002	$	138,957	$	194,234	$	118,868
Intangible assets, net			$	132,045			$	75,366

Schedule of Finite-Lived Intangible Asets, Future Amortization Expense

Estimated aggregate amortization expense for each of the next five years is as follows:

(In thousands)
2013	$	29,015
2014	27,315
2015	24,850
2016	20,286
2017	13,555

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Acquisitions (Details) (USD $)	12 Months Ended					12 Months Ended				12 Months Ended					12 Months Ended
	Dec. 29, 2012 Anasazi Software, Inc. [Member]	Nov. 26, 2012 Anasazi Software, Inc. [Member]	Nov. 26, 2012 Anasazi Software, Inc. [Member] Customer relationships [Member]	Nov. 26, 2012 Anasazi Software, Inc. [Member] Existing technologies [Member]	Nov. 26, 2012 Anasazi Software, Inc. [Member] Trade names [Member]	Dec. 31, 2011 Clairvia, Inc. [Member]	Oct. 17, 2011 Clairvia, Inc. [Member]	Oct. 17, 2011 Clairvia, Inc. [Member] Customer relationships [Member]	Oct. 17, 2011 Clairvia, Inc. [Member] Existing technologies [Member]	Dec. 29, 2012 Resource Systems, Inc. [Member]	Dec. 31, 2011 Resource Systems, Inc. [Member]	May 23, 2011 Resource Systems, Inc. [Member]	May 23, 2011 Resource Systems, Inc. [Member] Customer relationships [Member]	May 23, 2011 Resource Systems, Inc. [Member] Existing technologies [Member]	Jan. 01, 2011 IMC Health Care, Inc. [Member]	Jan. 04, 2010 IMC Health Care, Inc. [Member]	Jan. 04, 2010 IMC Health Care, Inc. [Member] Customer relationships [Member]
Business Acquisition, Purchase Price Allocation [Abstract]
Current assets		$ 6,026,000
Property and equipment		798,000
Current liabilities		(6,605,000)
Deferred income taxes, net		(6,594,000)
Total net tangible liabilities acquired		(6,375,000)
Total intangible assets acquired		18,559,000	12,829,000	5,218,000	512,000		14,100,000	6,800,000	6,100,000			18,200,000	11,200,000	6,400,000		5,100,000	4,100,000
Goodwill		35,281,000					24,600,000					26,100,000				11,300,000
Total purchase price		47,465,000					38,300,000					36,300,000				16,600,000
Business Acquisition, Effective Date of Acquisition	Nov. 26, 2012					Oct. 17, 2011					May 23, 2011				Jan. 04, 2010
Business Acquisition, Percentage of Voting Interests Acquired		100.00%										100.00%				100.00%
Business Acquisition, Contingent Consideration, at Fair Value		1,900,000
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Liability										$ 3,400,000
Business Combination, Goodwill Recognized, Segment Allocation	All of the goodwill was allocated to our Domestic operating segment					The goodwill was allocated to our Domestic operating segment					The goodwill was allocated to our Domestic operating segment				The goodwill was allocated to our Domestic operating segment
Business Acquisition, Purchase Price Allocation, Goodwill, Expected Tax Deductible Amount, Description	is not expected to be deductible for tax purposes					is expected to be deductible for tax purposes					is not expected to be deductible for tax purposes				is expected to be deductible for tax purposes
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	12 years 0 months 0 days					7 years 0 months 0 days					5 years 0 months 0 days				5 years 0 months 0 days

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Goodwill and Other Intangible Assets (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 29, 2012	Dec. 31, 2011	Jan. 01, 2011
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 20.3	$ 14.7	$ 12.0

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Receivables (Future Minimum Lease Payments To Be Received Under Existing Sales-Type Leases) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 29, 2012
Receivables [Abstract]
2013	$ 33,145
2014	36,840
2015	36,782
2016	32,477
2017	$ 12,868

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Quarterly Results (Tables)

12 Months Ended

Dec. 29, 2012

Quarterly Financial Information Disclosure [Abstract]

Schedule of Quarterly Financial Information [Table Text Block]

Selected quarterly financial data for 2012 and 2011 is set forth below:

(In thousands, except per share data)	Revenues		Earnings Before Income Taxes		Net Earnings		Basic Earnings Per Share		Diluted Earnings Per Share
2012 quarterly results:
First Quarter	$	641,212	$	130,063	$	88,708	$	0.52	$	0.51
Second Quarter	637,358		138,897		97,829		0.57		0.56
Third Quarter	676,482		151,047		98,887		0.58		0.56
Fourth Quarter	710,384		167,701		111,808		0.65		0.63
Total	$	2,665,436	$	587,708	$	397,232

(In thousands, except per share data)	Revenues		Earnings Before Income Taxes		Net Earnings		Basic Earnings Per Share		Diluted Earnings Per Share
2011 quarterly results:
First Quarter	$	491,664	$	95,710	$	64,556	$	0.38	$	0.37
Second Quarter	524,223		110,853		72,044		0.43		0.42
Third Quarter	571,640		123,167		78,835		0.47		0.45
Fourth Quarter	615,626		139,964		91,192		0.54		0.52
Total	$	2,203,153	$	469,694	$	306,627

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Consolidated Statements of Changes in Shareholders' Equity (USD $) In Thousands, except Share data, unless otherwise specified	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Noncontrolling Interest [Member]
Balance at Jan. 02, 2010		$ 1,636	$ 528,733	$ 1,053,563	$ (3,254)	$ 120
Common stock, shares issued at Jan. 02, 2010		163,550,000
Increase (Decrease) in Shareholders' Equity [Roll Forward]
Exercise of stock options		29	34,695
Exercise of stock options, shares		2,929,000
Employee share-based compensation expense			23,723
Employee share-based compensation net excess tax benefit			29,837
Other comprehensive income (loss)					(937)
Net earnings	237,272			237,272
Balance at Jan. 01, 2011		1,665	616,988	1,290,835	(4,191)	120
Common stock, shares issued at Jan. 01, 2011		166,479,000
Increase (Decrease) in Shareholders' Equity [Roll Forward]
Exercise of stock options		31	38,869
Exercise of stock options, shares		3,087,000
Employee share-based compensation expense			27,919
Employee share-based compensation net excess tax benefit			39,714
Other comprehensive income (loss)					(7,776)
Net earnings	306,627			306,627
Balance at Dec. 31, 2011	2,310,801	1,696	723,490	1,597,462	(11,967)	120
Common stock, shares issued at Dec. 31, 2011	169,565,856	169,566,000
Increase (Decrease) in Shareholders' Equity [Roll Forward]
Exercise of stock options		25	32,561
Exercise of stock options, shares		2,523,000
Employee share-based compensation expense			36,113
Employee share-based compensation net excess tax benefit			50,326
Other comprehensive income (loss)					6,712
Net earnings	397,232			397,232
Dissolution of underlying entity						(120)
Balance at Dec. 29, 2012	$ 2,833,650	$ 1,721	$ 842,490	$ 1,994,694	$ (5,255)	$ 0
Common stock, shares issued at Dec. 29, 2012	172,089,351	172,089,000

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Property and Equipment (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 29, 2012	Dec. 31, 2011	Jan. 01, 2011
Property, Plant and Equipment [Abstract]
Depreciation and leasehold amortization expense	$ 120.1	$ 117.9	$ 111.4

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Earnings Per Share (Tables)

12 Months Ended

Dec. 29, 2012

Earnings Per Share [Abstract]

Reconciliation Of The Numerators And The Denominators Of The Basic And Diluted Per Share

A reconciliation of the numerators and the denominators of the basic and diluted per share computations are as follows:

	2012					2011					2010
	Earnings		Shares	Per-Share		Earnings		Shares	Per-Share		Earnings		Shares	Per-Share
(In thousands, except per share data)	(Numerator)		(Denominator)	Amount		(Numerator)		(Denominator)	Amount		(Numerator)		(Denominator)	Amount
Basic earnings per share:
Income available to common shareholders	$	397,232	170,931	$	2.32	$	306,627	168,634	$	1.82	$	237,272	164,916	$	1.44
Effect of dilutive securities:
Stock options and non-vested shares	—		4,766			—		5,233			—		5,931
Diluted earnings per share:
Income available to common shareholders including assumed conversions	$	397,232	175,697	$	2.26	$	306,627	173,867	$	1.76	$	237,272	170,847	$	1.39

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Schedule II

12 Months Ended

Dec. 29, 2012

Valuation and Qualifying Accounts [Abstract]

Schedule of Valuation and Qualifying Accounts Disclosure [Text Block]

For the years ended December 29, 2012, December 31, 2011 and January 1, 2011

(In thousands)	Balance at Beginning of Period		Additions Charged to Costs and Expenses	Additions Through Acquisitions and Consolidation of Variable Interest Entity	Deductions		Balance at End of Period
Description
2010
Doubtful Accounts and Sale Allowances	$	16,895	9,856	—	(11,201	)	$	15,550
2011
Doubtful Accounts and Sale Allowances	$	15,550	11,365	31	(2,676	)	$	24,270
2012
Doubtful Accounts and Sale Allowances	$	24,270	13,483	8	(4,531	)	$	33,230

Schedule II

CERNER CORPORATION

VALUATION AND QUALIFYING ACCOUNTS

For the years ended December 29, 2012, December 31, 2011 and January 1, 2011

(In thousands)	Balance at Beginning of Period		Additions Charged to Costs and Expenses	Additions Through Acquisitions and Consolidation of Variable Interest Entity	Deductions		Balance at End of Period
Description
2010
Doubtful Accounts and Sale Allowances	$	16,895	9,856	—	(11,201	)	$	15,550
2011
Doubtful Accounts and Sale Allowances	$	15,550	11,365	31	(2,676	)	$	24,270
2012
Doubtful Accounts and Sale Allowances	$	24,270	13,483	8	(4,531	)	$	33,230

See accompanying report of independent registered public accounting firm.

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Quarterly Results

12 Months Ended

Dec. 29, 2012

Quarterly Financial Information Disclosure [Abstract]

Quarterly Results

Quarterly Results (unaudited)

Selected quarterly financial data for 2012 and 2011 is set forth below:

(In thousands, except per share data)	Revenues		Earnings Before Income Taxes		Net Earnings		Basic Earnings Per Share		Diluted Earnings Per Share
2012 quarterly results:
First Quarter	$	641,212	$	130,063	$	88,708	$	0.52	$	0.51
Second Quarter	637,358		138,897		97,829		0.57		0.56
Third Quarter	676,482		151,047		98,887		0.58		0.56
Fourth Quarter	710,384		167,701		111,808		0.65		0.63
Total	$	2,665,436	$	587,708	$	397,232

(In thousands, except per share data)	Revenues		Earnings Before Income Taxes		Net Earnings		Basic Earnings Per Share		Diluted Earnings Per Share
2011 quarterly results:
First Quarter	$	491,664	$	95,710	$	64,556	$	0.38	$	0.37
Second Quarter	524,223		110,853		72,044		0.43		0.42
Third Quarter	571,640		123,167		78,835		0.47		0.45
Fourth Quarter	615,626		139,964		91,192		0.54		0.52
Total	$	2,203,153	$	469,694	$	306,627

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Fair Value Measurements Fair Value, Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) (USD $) In Thousands, unless otherwise specified	Dec. 29, 2012	Dec. 31, 2011 Level 1 [Member] Money market funds [Member]	Dec. 29, 2012 Level 1 [Member] Money market funds [Member] Fair Value, Measurements, Recurring [Member]	Dec. 31, 2011 Level 2 [Member] Time deposits [Member]	Dec. 29, 2012 Level 2 [Member] Time deposits [Member] Fair Value, Measurements, Recurring [Member]	Dec. 29, 2012 Short-term investments [Member]	Dec. 29, 2012 Short-term investments [Member] Level 2 [Member] Time deposits [Member] Fair Value, Measurements, Recurring [Member]	Dec. 29, 2012 Short-term investments [Member] Level 2 [Member] Commercial paper [Member] Fair Value, Measurements, Recurring [Member]	Dec. 29, 2012 Short-term investments [Member] Level 2 [Member] Government and corporate bonds [Member] Fair Value, Measurements, Recurring [Member]	Dec. 29, 2012 Long-term investments [Member]	Dec. 29, 2012 Long-term investments [Member] Level 2 [Member] Time deposits [Member] Fair Value, Measurements, Recurring [Member]	Dec. 29, 2012 Long-term investments [Member] Level 2 [Member] Government and corporate bonds [Member] Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and Cash Equivalents, Fair Value Disclosure		$ 123,919	$ 68,267	$ 7,358	$ 24,068
Available-for-sale Securities, Fair Value Disclosure	$ 1,314,967					$ 719,665	$ 90,550	$ 86,458	$ 542,657	$ 502,967	$ 6,197	$ 496,770

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Share-Based Compensation (Tables)

12 Months Ended

Dec. 29, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

The weighted-average assumptions used to estimate the fair market value of stock options are as follows:

	2012		2011		2010
Expected volatility (%)	34.8	%	36.5	%	40.9	%
Expected term (yrs)	9.1		8.6		9.5
Risk-free rate (%)	2.1	%	2.2	%	2.9	%

Schedule Of Stock Options Activity

Stock option activity for 2012 was as follows:

(In thousands, except per share data)	Number of Shares		Weighted- Average Exercise  Price		Aggregate Intrinsic  Value		Weighted-Average       Remaining       Contractual  Term (Yrs)
Outstanding at beginning of year	12,909		$	23.78
Granted	1,931		81.00
Exercised	(2,521	)	15.87
Forfeited and expired	(283	)	51.27
Outstanding at end of year	12,036		33.97		$	516,168	6.35
Exercisable at end of year	7,265		$	17.72	$	423,982	5.13

Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value [Table Text Block]

	For the Years Ended
(In thousands, except for grant date fair values)	2012		2011		2010
Weighted-average grant date fair values	$	37.04	$	28.89	$	22.42
Total intrinsic value of options exercised	$	152,117	$	117,601	$	88,876
Cash received from exercise of stock options	38,147		38,900		34,724
Tax benefit realized upon exercise of stock options	55,952		44,908		33,802

Schedule Of Non-Vested Shares Activity

Non-vested share activity for 2012 was as follows:

(In thousands, except per share data)	Number of Shares		Weighted-Average Grant Date Fair Value
Outstanding at beginning of year	254		$	47.75
Granted	99		76.55
Vested	(52	)	50.24
Forfeited	—		—
Outstanding at end of year	301		$	56.82

	For the Years Ended
(In thousands, except for grant date fair values)	2012		2011		2010
Weighted average grant date fair values for shares granted during the year	$	76.55	$	54.07	$	41.09
Total fair value of shares vested during the year	$	2,612	$	2,527	$	1,147

Compensation Expense Recognized In The Condensed Consolidated Statements Of Operations

The amounts recognized in the consolidated statements of operations with respect to stock options, non-vested shares and ASPP are as follows:

	For the Years Ended
(In thousands)	2012			2011			2010
Stock option and non-vested share compensation expense	$	36,113		$	27,919		$	23,723
Associate stock purchase plan expense	2,859			2,180			1,692
Amounts capitalized in software development costs, net of amortization	(860		)	(620		)	(512		)
Amounts charged against earnings, before income tax benefit	$	38,112		$	29,479		$	24,903
Amount of related income tax benefit recognized in earnings	$	14,578		$	11,256		$	9,329

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Basis of Presentation, Nature of Operations and Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 29, 2012

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

The consolidated financial statements include all the accounts of Cerner Corporation and its subsidiaries. All significant intercompany transactions have been eliminated in consolidation.

The consolidated financial statements were prepared using accounting principles generally accepted in the United States. These principles require us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses. Actual results could differ from those estimates.

Our fiscal year ends on the Saturday closest to December 31. Fiscal years 2012, 2011 and 2010 consisted of 52 weeks and ended on December 29, 2012, December 31, 2011 and January 1, 2011, respectively. All references to years in these notes to consolidated financial statements represent fiscal years unless otherwise noted.

Nature of Operations

Nature of Operations

We design, develop, market, install, host and support health care information technology, health care devices, hardware and content solutions for health care organizations and consumers. We also provide a wide range of value-added services, including implementation and training, remote hosting, operational management services, revenue cycle services, support and maintenance, health care data analysis, clinical process optimization, transaction processing, employer health centers, employee wellness programs and third party administrator services for employer-based health plans.

Revenue Recognition

Revenue Recognition - We recognize software related revenue in accordance with the provisions of Accounting Standards Codification (ASC) 985-605, Software – Revenue Recognition and non-software related revenue in accordance with ASC 605, Revenue Recognition. In general, revenue is recognized when all of the following criteria have been met:

• Persuasive evidence of an arrangement exists;

• Delivery has occurred or services have been rendered;

• Our fee is fixed or determinable; and

• Collection of the revenue is reasonably assured.

The following are our major components of revenue:

• System sales – includes the licensing of computer software, software as a service, deployment period upgrades, installation, content subscriptions, transaction processing and the sale of computer hardware and sublicensed software;

• Support, maintenance and service – includes software support and hardware maintenance, remote hosting and managed services, training, consulting and implementation services; and

• Reimbursed travel – includes reimbursable out-of-pocket expenses (primarily travel) incurred in connection with our client service activities.

We provide for several models of procurement of our information systems and related services. The predominant model involves multiple deliverables and includes a perpetual software license agreement, project-related installation services, implementation and consulting services, software support and either hosting services or computer hardware and sublicensed software, which requires that we allocate revenue to each of these elements.

Allocation of Revenue to Multiple Element Arrangements

For multiple element arrangements that contain software and non-software elements, we allocate revenue to software and software-related elements as a group and any non-software element separately. After the arrangement consideration has been allocated to the non-software elements, revenue is recognized when the basic revenue recognition criteria are met for each element. For the group of software and software-related elements, revenue is recognized under the guidance applicable to software transactions.

Since we do not have vendor specific objective evidence (VSOE) of fair value on software licenses within our multiple element arrangements, we recognize revenue on our software and software-related elements using the residual method. Under the residual method, license revenue is recognized in a multiple-element arrangement when vendor-specific objective evidence of fair value exists for all of the undelivered elements in the arrangement, when software is installed and all other conditions to revenue recognition are met. We allocate revenue to each undelivered element in a multiple-element arrangement based on the element’s respective fair value, with the fair value determined by the price charged when that element is sold separately. Specifically, we determine the fair value of the software support, hardware maintenance, sublicensed software support, remote hosting, subscriptions and software as a service portions of the arrangement based on the substantive renewal price for these services charged to clients; professional services (including training and consulting) portion of the arrangement, other than installation services, based on hourly rates which we charge for these services when sold apart from a software license; and sublicensed software based on its price when sold separately from the software. The residual amount of the fee after allocating revenue to the fair value of the undelivered elements is attributed to the licenses for software solutions, including project-related installation services. If evidence of the fair value cannot be established for the undelivered elements of a license agreement using VSOE, the entire amount of revenue under the arrangement is deferred until these elements have been delivered or VSOE of fair value can be established.

We also enter into arrangements that include multiple non-software deliverables. For each element in a multiple element arrangement that does not contain software-related elements to be accounted for as a separate unit of accounting, the following must be met: the delivered products or services have value to the client on a stand-alone basis; and for an arrangement that includes a general right of return relative to the delivered products or services, delivery or performance of the undelivered product or service is considered probable and is substantially controlled by the Company. We allocate the arrangement consideration to each element based on the selling price hierarchy of VSOE of fair value, if it exists, or third-party evidence (TPE) of selling price. If neither VSOE nor TPE are available, we use estimated selling price. After the arrangement consideration has been allocated to the elements, we account for each respective element in the arrangement as described below.

For certain arrangements, revenue for software, implementation services and, in certain cases, support services for which VSOE of fair value cannot be established are accounted for as a single unit of accounting. The revenue recognized from single units of accounting are typically allocated and classified as system sales and support, maintenance and services. If available, the VSOE of fair value of the services provides the basis for support, maintenance and services allocation, and the remaining residual consideration provides the basis for system sales revenue allocations. In cases where VSOE cannot be established, revenue is classified based on the nature of related costs incurred. The following table details the classification allocations for arrangements accounted for as a single unit of accounting:

	For the Years Ended
(In millions)	2012		2011		2010
System sales	$	17.7	$	23.3	$	17.5
Support, maintenance and services	140.7		97.5		88.1

Revenue Recognition Policies for Each Element

We provide project-related installation services when licensing our software solutions, which include project-scoping services, conducting pre-installation audits and creating initial environments. We have deemed installation services to be essential to the functionality of the software and, therefore, recognize the software license over the software installation period using the percentage-of-completion method. We measure the percentage-of-completion based on output measures that reflect direct labor hours incurred, beginning at software delivery and culminating at completion of installation. Installation generally occurs in the same period the contracts are executed but in the past has been extended over a longer period of time depending on client specific factors.

We provide implementation and consulting services. These services vary depending on the scope and complexity of the engagement. Examples of such services may include database consulting, system configuration, project management, testing assistance, network consulting, post conversion review and application management services. Except for limited arrangements where our software requires significant modifications or customization, implementation and consulting services generally are not deemed to be essential to the functionality of the software and, thus, do not impact the timing of the software license recognition. However, if software license fees are tied to implementation milestones, then the portion of the software license fee tied to implementation milestones is deferred until the related milestone is accomplished and related fees become due and payable and non-forfeitable. Implementation fees are recognized over the service period, which may extend from nine months to three years for multi-phased projects.

Remote hosting and managed services are marketed under long-term arrangements generally over periods of five to 10 years. These services are typically provided to clients that have acquired a perpetual license for licensed software and have contracted with us to host the software in our data center. Under these arrangements, the client generally has the contractual right to take possession of the licensed software at any time during the hosting period without significant penalty and it is feasible for the client to either run the software on its own equipment or contract with another party unrelated to us to host the software. Additionally, these services are not deemed to be essential to the functionality of the licensed software or other elements of the arrangement and as such, we allocate a portion of the services fee to the software and recognize it once the client has the ability to take possession of the software. The remaining services fee in these arrangements, as well as the services fee for arrangements where the client does not have the contractual right or the ability to take possession of the software at any time, is generally recognized ratably over the hosting service period.

We also offer our solutions on a software as a service model, providing time-based licenses for our software solutions available within an environment that we manage from our data centers. The data centers provide system and administrative support as well as processing services. Revenue on these services is combined and recognized on a monthly basis over the term of the contract. We capitalize related pre-contract direct set-up costs consisting of third party costs and direct software installation and implementation costs associated with the initial set up of a software as a service client. These costs are amortized over the term of the arrangement.

Software support fees are marketed under annual and multi-year arrangements and are recognized as revenue ratably over the contractual support term. Hardware and sublicensed software maintenance revenues are recognized ratably over the contractual maintenance term.

Subscription and content fees are generally marketed under annual and multi-year agreements and are recognized ratably over the contractual terms.

Hardware and sublicensed software sales are generally recognized when title and risk of loss have transferred to the client.

The sale of equipment under sales-type leases is recorded as system sales revenue at the inception of the lease. Sales-type leases also produce financing income, which is included in system sales revenue and is recognized at consistent rates of return over the lease term.

Where we have contractually agreed to develop new or customized software code for a client as a single element arrangement, we utilize percentage-of-completion accounting, labor-hours method.

Revenue generally is recognized net of any taxes collected from clients and subsequently remitted to governmental authorities.

Payment Arrangements

Our payment arrangements with clients typically include an initial payment due upon contract signing and date-based licensed software payment terms and payments based upon delivery for services, hardware and sublicensed software. Revenue recognition on support payments received in advance of the services being performed are deferred and classified as either current or long term deferred revenue depending on whether the revenue will be earned within one year.

We have periodically provided long-term financing options to creditworthy clients through third party financing institutions and have directly provided extended payment terms to clients from contract date. These extended payment term arrangements typically provide for date based payments over periods ranging from 12 months up to seven years. As a significant portion of the fee is due beyond one year, we have analyzed our history with these types of arrangements and have concluded that we have a standard business practice of using extended payment term arrangements and a long history of successfully collecting under the original payment terms for arrangements with similar clients, product offerings, and economics without granting concessions. Accordingly, we consider the fee to be fixed and determinable in these extended payment term arrangements and, thus, the timing of revenue is not impacted by the existence of extended payments.

Some of these payment streams have been assigned on a non-recourse basis to third party financing institutions. We account for the assignment of these receivables as sales of financial assets. Provided all revenue recognition criteria have been met, we recognize revenue for these arrangements under our normal revenue recognition criteria, and if appropriate, net of any payment discounts from financing transactions.

Cash Equivalents

Cash Equivalents - Cash equivalents consist of short-term marketable securities with original maturities less than 90 days.

Investments

Investments – Our short-term investments are primarily invested in time deposits, commercial paper, government and corporate bonds. Our long-term investments are primarily invested in government and corporate bonds with maturities of less than two years.

Effective April 1, 2012, we began reporting all securities in our investment portfolio as available-for-sale. The change resulted in the transfer of investments with an aggregate carrying amount of $1.0 billion from held-to-maturity to available-for-sale, with gross unrealized gains of $0.7 million and gross unrealized losses of $0.7 million. The unrealized gains and losses, net of the related tax effects, were recorded to accumulated other comprehensive income. The decision to transfer the securities to available-for-sale is intended to provide us with financial flexibility in determining whether to hold our investment securities to maturity. Such change contemplates the possibility that securities may be liquidated prior to maturity as we manage through changing market conditions.

Available-for-sale securities are recorded at fair value with the unrealized gains and losses reflected in accumulated other comprehensive income until realized. Realized gains and losses from the sale of available-for-sale securities, if any, are determined on a specific identification basis.

We regularly review investment securities for impairment based on both quantitative and qualitative criteria that include the extent to which cost exceeds fair value, the duration of any market decline, and the financial health of and specific prospects for the issuer. Unrealized losses that are other than temporary are recognized in earnings.

Premiums are amortized and discounts are accreted over the life of the security as adjustments to interest income for our investments. Interest income is recognized when earned.

Refer to Note (3) and Note (4) for further description of these assets and their fair value.

Concentrations

Concentrations - Substantially all of our cash and cash equivalents are held at four major financial institutions. The majority of our cash equivalents consist of money market funds. Deposits held with banks may exceed the amount of insurance provided on such deposits. Generally these deposits may be redeemed upon demand.

As of the end of 2012, we had significant concentration of receivables owed to us by Fujitsu Services Limited, which are currently in dispute. Refer to Note (5) for additional information.

Inventory

Inventory - Inventory consists primarily of computer hardware and sublicensed software, held for resale. Inventory is recorded at the lower of cost (first-in, first-out) or market.

Property and Equipment

Property and Equipment - We account for property and equipment in accordance with ASC 360, Property, Plant, and Equipment. Property, equipment and leasehold improvements are stated at cost. Depreciation of property and equipment is computed using the straight-line method over periods of one to 50 years. Amortization of leasehold improvements is computed using a straight-line method over the shorter of the lease terms or the useful lives, which range from periods of one to 15 years.

Software Development Costs

Software Development Costs - Software development costs are accounted for in accordance with ASC 985-20, Costs of Software to be Sold, Leased or Marketed. Software development costs incurred internally in creating computer software products are expensed until technological feasibility has been established upon completion of a detailed program design. Thereafter, all software development costs incurred through the software’s general release date are capitalized and subsequently reported at the lower of amortized cost or net realizable value. Capitalized costs are amortized based on current and expected future revenue for each software solution with minimum annual amortization equal to the straight-line amortization over the estimated economic life of the solution. We amortize capitalized software development costs over five years.

Goodwill

Goodwill - We account for goodwill under the provisions of ASC 350, Intangibles – Goodwill and Other. Goodwill is not amortized but is evaluated for impairment annually or whenever there is an impairment indicator. All goodwill is assigned to a reporting unit, where it is subject to an annual impairment assessment. Based on these evaluations, there was no impairment of goodwill in 2012, 2011 or 2010. Refer to Note (7) for more information of Goodwill and other intangible assets.

Contingencies

Contingencies - We accrue estimates for resolution of any legal and other contingencies when losses are probable and estimable, in accordance with ASC 450, Contingencies. We currently have no material pending litigation.

The terms of our software license agreements with our clients generally provide for a limited indemnification of such clients against losses, expenses and liabilities arising from third party claims based on alleged infringement by our solutions of an intellectual property right of such third party. The terms of such indemnification often limit the scope of and remedies for such indemnification obligations and generally include a right to replace or modify an infringing solution. To date, we have not had to reimburse any of our clients for any losses related to these indemnification provisions pertaining to third party intellectual property infringement claims. For several reasons, including the lack of prior indemnification claims and the lack of a monetary liability limit for certain infringement cases under the terms of the corresponding agreements with our clients, we cannot determine the maximum amount of potential future payments, if any, related to such indemnification provisions.

From time to time we are involved in routine litigation incidental to the conduct of our business, including for example, employment disputes and litigation alleging solution defects, personal injury, intellectual property infringement, violations of law and breaches of contract and warranties. We believe that no such routine litigation currently pending against us, if adversely determined, would have a material adverse effect on our consolidated financial position, results of operations or cash flows.

Derivative Instruments and Hedging Activities

Derivative Instruments and Hedging Activities - We account for our hedging activities in accordance with ASC 815, Derivatives and Hedging. Historically, our use of hedging instruments has primarily been to hedge foreign currency denominated assets and liabilities. We record all hedging instruments on our consolidated balance sheets at fair value. For hedging instruments that are designated and qualify as a net investment hedge, the effective portion of the gain or loss on the hedging instrument is reported in the foreign currency translation component of other comprehensive income (loss). Any ineffective portion of the gain or loss on the hedging instrument is recorded in the results of operations immediately. Refer to Note (10) for more information on our hedging activities.

Income Taxes

Income Taxes - Income taxes are accounted for in accordance with ASC 740, Income Taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Refer to Note (12) for additional information regarding income taxes.

Earnings per Common Share

Earnings per Common Share - Basic earnings per share (EPS) excludes dilution and is computed, in accordance with ASC 260, Earnings Per Share, by dividing income available to common shareholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in our earnings. Refer to Note (13) for additional details of our earnings per share computations.

Accounting for Share-based Payments

Accounting for Share-based Payments - We recognize all share-based payments to associates, directors and consultants, including grants of stock options, restricted stock and performance shares, in the financial statements as compensation cost based on their fair value on the date of grant, in accordance with ASC 718, Compensation-Stock Compensation. This compensation cost is recognized over the vesting period on a straight-line basis for the fair value of awards that actually vest. Refer to Note (14) for a detailed discussion of share-based payments.

Foreign Currency

Foreign Currency - In accordance with ASC 830, Foreign Currency Matters, assets and liabilities of non-U.S. subsidiaries whose functional currency is the local currency are translated into U.S. dollars at exchange rates prevailing at the balance sheet date. Revenues and expenses are translated at average exchange rates during the year. The net exchange differences resulting from these translations are reported in accumulated other comprehensive income. Gains and losses resulting from foreign currency transactions are included in the consolidated statements of operations.

Collaborative Arrangements

Collaborative Arrangements - In accordance with ASC 808, Collaborative Arrangements, third party costs incurred and revenues generated by arrangements involving joint operating activities of two or more parties that are each actively involved and exposed to risks and rewards of the activities are classified in the consolidated statements of operations on a gross basis only if we are determined to be the principal participant in the arrangement. Otherwise, third party revenues and costs generated by collaborative arrangements are presented on a net basis. Payments between participants are recorded and classified based on the nature of the payments.

Recently Adopted Accounting Pronouncements

Recently Adopted Accounting Pronouncements

Comprehensive Income. On January 1, 2012, we adopted Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) 2011-05, Presentation of Comprehensive Income. ASU 2011-05 requires an entity to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. ASU 2011-05 eliminates the option to present the components of other comprehensive income as part of the statement of changes in equity. These consolidated financial statements include separate consolidated statements of comprehensive income.

Goodwill Impairment. On January 1, 2012, we adopted FASB ASU 2011-08, Testing for Goodwill Impairment. ASU 2011-08 amends existing guidance by giving an entity the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than the carrying amount. The more-likely-than-not threshold is defined as having a likelihood of more than 50 percent. If an entity determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then it is necessary to perform the two-step goodwill impairment test, as currently prescribed by FASB Accounting Standards Codification Topic 350. Otherwise, the two-step goodwill impairment test is not required. The adoption of this standard did not have a material effect on our consolidated financial statements.

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Basis of Presentation, Nature of Operations and Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 29, 2012

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Classification Allocations for Single Unit Accounting Arrangements [Table Text Block]

The following table details the classification allocations for arrangements accounted for as a single unit of accounting:

	For the Years Ended
(In millions)	2012		2011		2010
System sales	$	17.7	$	23.3	$	17.5
Support, maintenance and services	140.7		97.5		88.1

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Consolidated Statements Of Cash Flows (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 29, 2012	Dec. 31, 2011	Jan. 01, 2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings	$ 397,232	$ 306,627	$ 237,272
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	222,580	212,556	193,337
Share-based compensation expense	36,113	27,919	23,723
Provision for deferred income taxes	8,342	(22,113)	30,362
Changes in assets and liabilities (net of businesses acquired):
Receivables, net	(83,705)	(128,979)	(17,370)
Inventory	(279)	(12,329)	188
Prepaid expenses and other	(2,224)	9,974	35,378
Accounts payable	35,265	17,504	30,812
Accrued income taxes	(22,784)	26,053	(42,651)
Deferred revenue	33,277	33,792	(24,618)
Other accrued liabilities	84,497	75,290	(9,989)
Net cash provided by operating activities	708,314	546,294	456,444
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital purchases	(183,429)	(104,795)	(102,311)
Capitalized software development costs	(100,189)	(82,942)	(80,979)
Purchases of investments	(1,286,997)	(1,083,274)	(803,832)
Sales and maturities of investments	932,394	791,881	491,492
Purchase of other intangibles	(22,870)	(20,620)	(10,780)
Acquisition of businesses, net of cash acquired	(40,540)	(65,341)	(14,486)
Net cash used in investing activities	(701,631)	(565,091)	(520,896)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of long-term debt and capital lease obligations	(17,083)	(25,701)	(27,625)
Proceeds from excess tax benefits from share-based compensation	48,370	36,433	26,226
Proceeds from exercise of options	38,147	38,900	34,724
Contingent consideration payments for acquisition of business	(3,400)	(779)	0
Proceeds from sale of future receivables	0	0	1,516
Net cash provided by financing activities	66,034	48,853	34,841
Effect of exchange rate changes on cash and cash equivalents	1,257	(1,421)	2,399
Net increase (decrease) in cash and cash equivalents	73,974	28,635	(27,212)
Cash and cash equivalents at beginning of period	243,146	214,511	241,723
Cash and cash equivalents at end of period	317,120	243,146	214,511
Cash paid during the year for:
Interest	6,448	5,786	6,887
Income taxes, net of refund	158,871	115,867	121,737
Summary of acquisition transactions:
Fair value of net tangible assets (liabilities) acquired (assumed)	(6,375)	(8,464)	1,069
Fair value of intangible assets acquired	18,559	32,264	5,076
Fair value of goodwill	35,281	50,751	11,290
Less: Fair value of contingent liability payable	(1,916)	(5,235)	(1,725)
Less: Fair value of working capital settlement payable	0	(939)	0
Cash paid for acquisitions	45,549	68,377	15,710
Cash acquired	(5,009)	(3,036)	(1,224)
Net cash used	$ 40,540	$ 65,341	$ 14,486

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Acquisitions (Tables)

12 Months Ended

Dec. 29, 2012

Business Combinations [Abstract]

Schedule of Purchase Price Allocation [Table Text Block]

The allocation of purchase price is subject to changes as an appraisal of intangible assets and liabilities is finalized and additional information becomes available; however, we do not expect material changes. The following is a summary of the preliminary allocation of purchase price:

(In thousands)	Allocation Amount
Tangible assets and liabilities
Current assets	$	6,026
Property and equipment	798
Current liabilities	(6,605		)
Deferred income taxes, net	(6,594		)
Total net tangible liabilities	(6,375		)
Intangible assets
Customer relationships	12,829
Existing technologies	5,218
Trade names	512
Total intangible assets	18,559
Goodwill	35,281
Total purchase price	$	47,465

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Share-Based Compensation (Narrative) (Details) (USD $) In Millions, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 29, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for awards	7.7
Typical vesting period for option awards	5 years
Contractual term of options	10 years
Associate stock purchase plan discount	15.00%
Authorized preferred shares	1.0
Par value per share of preferred stock	$ 0.01
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total unrecognized compensation cost	$ 99.3
Period of recognition for remaining share-based compensation expense	3 years 2 months 11 days
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total unrecognized compensation cost	$ 8.5
Period of recognition for remaining share-based compensation expense	1 year 3 months 22 days

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Hedging Activities (Tables)

12 Months Ended

Dec. 29, 2012

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Fair Value Of Net Investment Hedge Within Condensed Consolidated Balance Sheets And Unrealized Gain Or Loss

The following tables represent the fair value of our net investment hedge included within the consolidated balance sheets and the related unrealized gain or loss, net of related income tax effects, on the net investment hedge recognized in comprehensive income:

(In thousands)		2012
Derivatives Designated	Balance Sheet Classification	Fair Value		Net Unrealized Loss
Net investment hedge	Short-term liabilities	$	15,015	$	451
Net investment hedge	Long-term liabilities	30,030		981
Total net investment hedge		$	45,045	$	1,432

(In thousands)		2011
Derivatives Designated	Balance Sheet Classification	Fair Value		Net Unrealized Loss
Net investment hedge	Short-term liabilities	$	14,421	$	133
Net investment hedge	Long-term liabilities	43,262		1,381
Total net investment hedge		$	57,683	$	1,514

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Investments (Narrative) (Details) (USD $)	12 Months Ended
	Dec. 29, 2012	Dec. 31, 2011
Investments [Abstract]
Cost method investments	$ 6,500,000
Cash equivalents		131,300,000
Short-term investments		531,635,000
Long-term investments		359,324,000
Proceeds from sale of available-for-sale securities	$ 28,600,000

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Indebtedness (Schedule of Minimum Annual Payments Under Capital Lease Obligations and Maturities of Indebtedness) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 29, 2012	Dec. 31, 2011
Schedule of Future Minimum Lease Payments For Capital Leases and Maturities of Indebtedness [Line Items]
Minimum Lease Payments	$ 150,549
Less: Interest	9,205
Principal	141,344
Prinicpal Amount of Indebtedness	54,795	67,500
Total debt and capital lease obligations	196,139	126,543
2013
Schedule of Future Minimum Lease Payments For Capital Leases and Maturities of Indebtedness [Line Items]
Minimum Lease Payments	38,717
Less: Interest	3,900
Principal	34,817
Prinicpal Amount of Indebtedness	24,765
Total debt and capital lease obligations	59,582
2014
Schedule of Future Minimum Lease Payments For Capital Leases and Maturities of Indebtedness [Line Items]
Minimum Lease Payments	35,715
Less: Interest	2,855
Principal	32,860
Prinicpal Amount of Indebtedness	15,015
Total debt and capital lease obligations	47,875
2015
Schedule of Future Minimum Lease Payments For Capital Leases and Maturities of Indebtedness [Line Items]
Minimum Lease Payments	33,792
Less: Interest	1,767
Principal	32,025
Prinicpal Amount of Indebtedness	15,015
Total debt and capital lease obligations	47,040
2016
Schedule of Future Minimum Lease Payments For Capital Leases and Maturities of Indebtedness [Line Items]
Minimum Lease Payments	30,803
Less: Interest	589
Principal	30,214
Prinicpal Amount of Indebtedness	0
Total debt and capital lease obligations	30,214
2017
Schedule of Future Minimum Lease Payments For Capital Leases and Maturities of Indebtedness [Line Items]
Minimum Lease Payments	11,522
Less: Interest	94
Principal	11,428
Prinicpal Amount of Indebtedness	0
Total debt and capital lease obligations	$ 11,428

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Dec. 29, 2012	Dec. 31, 2011
Current assets:
Cash and cash equivalents	$ 317,120	$ 243,146
Short-term investments		531,635
Short-term investments	719,665
Receivables, net	577,848	563,209
Inventory	23,681	23,296
Prepaid expenses and other	113,572	94,232
Deferred income taxes, net	38,620	46,795
Total current assets	1,790,506	1,502,313
Property and equipment, net	569,708	488,996
Software development costs, net	267,307	248,750
Goodwill	247,616	211,826
Intangible assets, net	132,045	75,366
Long-term investments		359,324
Long-term investments	509,467
Other assets	187,819	113,783
Total assets	3,704,468	3,000,358
Current liabilities:
Accounts payable	141,212	85,545
Current installments of long-term debt and capital lease obligations	59,582	39,722
Deferred revenue	189,652	153,139
Accrued payroll and tax withholdings	125,253	109,227
Other accrued expenses	64,413	51,087
Total current liabilities	580,112	438,720
Long-term debt and capital lease obligations	136,557	86,821
Deferred income taxes and other liabilities	143,212	150,229
Deferred revenue	10,937	13,787
Total liabilities	870,818	689,557
Cerner Corporation shareholders' equity:
Common stock, $.01 par value, 250,000,000 shares authorized, 172,089,351 shares issued at December 29, 2012 and 169,565,856 shares issued at December 31, 2011	1,721	1,696
Additional paid-in capital	842,490	723,490
Retained earnings	1,994,694	1,597,462
Accumulated other comprehensive loss, net	(5,255)	(11,967)
Total Cerner Corporation shareholders' equity	2,833,650	2,310,681
Noncontrolling interest	0	120
Total shareholders' equity	2,833,650	2,310,801
Total liabilities and shareholders' equity	$ 3,704,468	$ 3,000,358

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Commitments (Tables)

12 Months Ended

Dec. 29, 2012

Commitments and Contingencies Disclosure [Abstract]

Schedule of Aggregate Future Minimum Payments for Non-Cancelable Operating Leases

Aggregate minimum future payments under these non-cancelable operating leases are as follows:

(In thousands)	Operating Lease Obligations
2013	$	24,943
2014	22,843
2015	16,803
2016	12,210
2017	11,911
2018 and thereafter	40,133
	$	128,843

Schedule of Aggregate Future Payments for Purchase Commitments

These commitments represent non-cancellable commitments primarily to provide ongoing support, maintenance and service to our clients. Aggregate future payments under these commitments are as follows:

(In thousands)	Purchase Obligations
2013	$	39,654
2014	33,052
2015	12,721
2016	2,594
2017	2,184
2018 and thereafter	4,000
	$	94,205

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Schedule II (Details) (Allowance for Doubtful Accounts [Member], USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 29, 2012	Dec. 31, 2011	Jan. 01, 2011
Allowance for Doubtful Accounts [Member]
Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at beginning of period	$ 24,270	$ 15,550	$ 16,895
Additions charged to costs and expenses	13,483	11,365	9,856
Additions through acquisitions and consolidation of variable interest entity	8	31	0
Deductions	(4,531)	(2,676)	(11,201)
Balance at end of period	$ 33,230	$ 24,270	$ 15,550

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Consolidated Statements Of Comprehensive Income (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 29, 2012	Dec. 31, 2011	Jan. 01, 2011
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]
Net earnings	$ 397,232	$ 306,627	$ 237,272
Foreign currency translation adjustment and other (net of tax (benefit) of $(1,396), $(2,162) and $1,146, respectively)	6,511	(7,776)	(937)
Change in net unrealized holding gain (loss) on available-for-sale investments (net of taxes of $125, $0 and $0, respectively)	201	0	0
Comprehensive income	$ 403,944	$ 298,851	$ 236,335

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Segment Reporting (Summary Of The Operating Information) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 29, 2012	Sep. 29, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Oct. 01, 2011	Jul. 02, 2011	Apr. 02, 2011	Dec. 29, 2012	Dec. 31, 2011	Jan. 01, 2011
Segment Reporting Information [Line Items]
Revenue	$ 710,384	$ 676,482	$ 637,358	$ 641,212	$ 615,626	$ 571,640	$ 524,223	$ 491,664	$ 2,665,436	$ 2,203,153	$ 1,850,222
Cost of revenues									608,197	441,672	320,356
Operating expenses									1,485,577	1,301,683	1,170,533
Total costs and expenses									2,093,774	1,743,355	1,490,889
Operating earnings									571,662	459,798	359,333
Domestic Segment
Segment Reporting Information [Line Items]
Revenue									2,341,304	1,894,454	1,562,563
Cost of revenues									548,813	387,466	272,385
Operating expenses									506,249	439,465	417,181
Total costs and expenses									1,055,062	826,931	689,566
Operating earnings									1,286,242	1,067,523	872,997
Global Segment
Segment Reporting Information [Line Items]
Revenue									324,132	308,699	287,659
Cost of revenues									59,384	54,206	47,971
Operating expenses									131,580	126,997	124,546
Total costs and expenses									190,964	181,203	172,517
Operating earnings									133,168	127,496	115,142
Other
Segment Reporting Information [Line Items]
Revenue
Cost of revenues
Operating expenses									847,748	735,221	628,806
Total costs and expenses									847,748	735,221	628,806
Operating earnings									$ (847,748)	$ (735,221)	$ (628,806)

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Receivables (Summary Of Net Receivables) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 29, 2012	Dec. 31, 2011
Receivables [Abstract]
Gross accounts receivable	$ 563,141	$ 496,706
Less: Allowance for doubtful accounts	33,230	24,270
Accounts receivable, net of allowance	529,911	472,436
Contracts receivable	18,245	81,776
Current portion of lease receivables	29,692	8,997
Total receivables, net	$ 577,848	$ 563,209

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Receivables (Tables)

12 Months Ended

Dec. 29, 2012

Receivables [Abstract]

Summary of Net Receivables

A summary of net receivables is as follows:

(In thousands)	2012		2011
Gross accounts receivable	$	563,141	$	496,706
Less: Allowance for doubtful accounts	33,230		24,270
Accounts receivable, net of allowance	529,911		472,436
Contracts receivable	18,245		81,776
Current portion of lease receivables	29,692		8,997
Total receivables, net	$	577,848	$	563,209

Schedule of Sales-Type Leases

The components of our net investment in sales-type leases are as follows:

(In thousands)	2012		2011
Minimum lease payments receivable	$	152,112	$	60,695
Less: Unearned income	8,206		5,347
Total lease receivables	143,906		55,348
Less: Long-term receivables included in other assets	114,214		46,351
Current portion of lease receivables	$	29,692	$	8,997

Schedule of Future Minimum Lease Payments to be Received Under Existing Sales-Type Leases

Future minimum lease payments to be received under existing sales-type leases for the next five years are as follows:

(In thousands)
2013	$	33,145
2014	36,840
2015	36,782
2016	32,477
2017	12,868

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Goodwill and Other Intangible Assets (Schedule of Changes in Carrying Amounts of Goodwill) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 29, 2012	Dec. 31, 2011
Goodwill [Roll Forward]
Beginning Balance	$ 211,826	$ 161,374
Goodwill recorded in connection with business acquisitions	35,281	51,100
Foreign currency translation adjustment and other	509	(648)
Ending Balance	$ 247,616	$ 211,826

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Earnings Per Share

12 Months Ended

Dec. 29, 2012

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

A reconciliation of the numerators and the denominators of the basic and diluted per share computations are as follows:

	2012					2011					2010
	Earnings		Shares	Per-Share		Earnings		Shares	Per-Share		Earnings		Shares	Per-Share
(In thousands, except per share data)	(Numerator)		(Denominator)	Amount		(Numerator)		(Denominator)	Amount		(Numerator)		(Denominator)	Amount
Basic earnings per share:
Income available to common shareholders	$	397,232	170,931	$	2.32	$	306,627	168,634	$	1.82	$	237,272	164,916	$	1.44
Effect of dilutive securities:
Stock options and non-vested shares	—		4,766			—		5,233			—		5,931
Diluted earnings per share:
Income available to common shareholders including assumed conversions	$	397,232	175,697	$	2.26	$	306,627	173,867	$	1.76	$	237,272	170,847	$	1.39

Options to purchase 2.3 million, 2.1 million and 1.2 million shares of common stock at per share prices ranging from $55.24 to $85.96, $39.36 to $68.45 and $29.11 to $45.96, were outstanding at the end of 2012, 2011 and 2010, respectively, but were not included in the computation of diluted earnings per share because they were anti-dilutive.

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Property and Equipment (Tables)

12 Months Ended

Dec. 29, 2012

Property, Plant and Equipment [Abstract]

Property and Equipment

A summary of property, equipment and leasehold improvements stated at cost, less accumulated depreciation and amortization, is as follows:

(In thousands)	Depreciable Lives (Yrs)			2012		2011
Computer and communications equipment	1	—	5	$	817,186	$	741,547
Land, buildings and improvements	12	—	50	281,798		207,069
Leasehold improvements	1	—	15	146,004		163,794
Furniture and fixtures	5	—	12	63,848		61,499
Capital lease equipment	3	—	5	3,194		5,914
Other equipment	3	—	20	575		383
				1,312,605		1,180,206
Less accumulated depreciation and leasehold amortization				742,897		691,210
Total property and equipment, net				$	569,708	$	488,996

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Foundations Retirement Plan

12 Months Ended

Dec. 29, 2012

Defined Contribution Pension and Other Postretirement Plans Disclosure [Abstract]

Pension and Other Postretirement Benefits Disclosure [Text Block]

Foundations Retirement Plan

The Cerner Corporation Foundations Retirement Plan (the Plan) was established under Section 401(k) of the Internal Revenue Code. All associates age 18 and older and who are not a member of an excluded class are eligible to participate. Participants may elect to make pretax contributions from 1% to 80% of eligible compensation to the Plan, subject to annual limitations determined by the Internal Revenue Service. Participants may direct contributions into mutual funds, a stable value fund, a Company stock fund, or a self-directed brokerage account. We have a first tier discretionary match that is made on behalf of participants in an amount equal to 33% of the first 6% of the participant’s salary contribution. Our first tier discretionary match expenses for the Plan amounted to $12.3 million, $10.5 million and $8.9 million for 2012, 2011 and 2010, respectively.

We added a second tier discretionary match to the Plan in 2000. Contributions are based on attainment of established earnings per share goals for the year or the established financial metric for the Plan. Only participants who defer 2% of their paid base salary, are actively employed as of the last day of the Plan year and are employed before October 1st of the Plan year are eligible to receive the discretionary match contribution. For the years ended 2012, 2011 and 2010 we expensed $11.9 million, $10.5 million and $8.9 million for the second tier discretionary distributions, respectively.

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Goodwill and Other Intangible Assets (Schedule of Estimated Aggregate Amortization Expense) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 29, 2012
Goodwill and Intangible Assets Disclosure [Abstract]
2013	$ 29,015
2014	27,315
2015	24,850
2016	20,286
2017	$ 13,555

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Consolidated Statements Of Comprehensive Income (Parenthetical) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 29, 2012	Dec. 31, 2011	Jan. 01, 2011
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]
Foreign currency translation adjustment and other, taxes (benefit)	$ (1,396)	$ (2,162)	$ 1,146
Change in net unrealized holding gain (loss) on available-for-sale investments, taxes	$ 125	$ 0	$ 0

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Consolidated Balance Sheets (Parenthetical) (USD $)	Dec. 29, 2012	Dec. 31, 2011
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	250,000,000	250,000,000
Common stock, shares issued	172,089,351	169,565,856

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Software Development Costs

12 Months Ended

Dec. 29, 2012

Research and Development [Abstract]

Software Development Costs

Software Development

Information regarding our software development costs is included in the following table:

	For the Years Ended
(In thousands)	2012			2011			2010
Software development costs	$	319,828		$	290,645		$	284,836
Capitalized software development costs	(100,189		)	(82,942		)	(80,979		)
Amortization of capitalized software development costs	81,731			79,098			68,994
Total software development expense	$	301,370		$	286,801		$	272,851

Accumulated amortization as of the end of 2012 and 2011 was $703.1 million and $621.9 million, respectively.

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Commitments (Schedule of Aggregate Future Payments for Purchase Commitments) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 29, 2012
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract]
2013	$ 39,654
2014	33,052
2015	12,721
2016	2,594
2017	2,184
2018 and thereafter	4,000
Total	$ 94,205

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Commitments (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 29, 2012	Dec. 31, 2011	Jan. 01, 2011
Commitments and Contingencies Disclosure [Abstract]
Rent expense for office and warehouse space	$ 18.1	$ 17.6	$ 20.5

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Document And Entity Information (USD $)	12 Months Ended
	Dec. 29, 2012	Feb. 01, 2013	Jun. 29, 2012
Entity Information [Line Items]
Entity Registrant Name	CERNER CORP /MO/
Entity Central Index Key	0000804753
Document Type	10-K
Document Period End Date	Dec. 29, 2012
Amendment Flag	false
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	FY
Current Fiscal Year End Date	--12-29
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		172,207,737
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Public Float			$ 12,351,700,511

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Indebtedness

12 Months Ended

Dec. 29, 2012

Debt Disclosure [Abstract]

Idebtedness

Long-term Debt and Capital Lease Obligations

The following is a summary of indebtedness outstanding:

(In thousands)	2012			2011
Note agreement, 5.54%	$	45,045		$	57,683
Senior Notes, Series B, 6.42%	9,750			9,750
Capital lease obligations	141,344			58,995
Other obligations	—			115
Total debt and capital lease obligations	196,139			126,543
Less: current portion	(59,582		)	(39,722		)
Long-term debt and capital lease obligations	$	136,557		$	86,821

In November 2005, we completed a £65.0 million unsecured private placement of debt at 5.54% pursuant to a Note Agreement. The Note Agreement is payable in seven equal annual installments, which commenced November 2009. The proceeds were used to repay the outstanding amount under our credit facility and for general corporate purposes. The Note Agreement contains certain net worth and fixed charge coverage covenants and provides certain restrictions on our ability to borrow, incur liens, sell assets and pay dividends. We were in compliance with all covenants at the end of 2012.

In December 2002, we completed a $60.0 million unsecured private placement of debt pursuant to a Note Agreement. The Series A Senior Notes, with a $21.0 million principal amount at 5.57% were paid in full in 2008. The Series B Senior Notes, with a $39.0 million principal amount at 6.42%, are payable in four equal annual installments, which commenced December 2009. The proceeds were used to repay the outstanding amount under our credit facility and for general corporate purposes. The Note Agreement contains certain net worth and fixed charge coverage covenants and provides certain restrictions on our ability to borrow, incur liens, sell assets and pay dividends. We were in compliance with all covenants at the end of 2012. On December 31, 2012, we made the final installment payment, repaying the Series B Senior Notes in full.

Minimum annual payments under existing capital lease obligations and maturities of indebtedness at the end of 2012 are as follows:

	Capital Lease Obligations
(In thousands)	Minimum Lease Payments		Less: Interest		Principal		Principal Amount of Indebtedness		Total
2013	$	38,717	$	3,900	$	34,817	$	24,765	$	59,582
2014	35,715		2,855		32,860		15,015		47,875
2015	33,792		1,767		32,025		15,015		47,040
2016	30,803		589		30,214		—		30,214
2017	11,522		94		11,428		—		11,428
Total	$	150,549	$	9,205	$	141,344	$	54,795	$	196,139

We maintain a $100.0 million multi-year revolving credit facility, which expires in February 2017. The facility provides an unsecured revolving line of credit for working capital purposes, along with a letter of credit facility. Interest is payable at a rate based on prime, LIBOR, or the U.S. federal funds rate, plus a spread that varies depending on the leverage ratios maintained. The agreement provides certain restrictions on our ability to borrow, incur liens, sell assets and pay dividends and contains certain cash flow and liquidity covenants. As of the end of 2012, we were in compliance with all debt covenants. As of the end of 2012, we had no outstanding borrowings under this agreement; however, we had $14.3 million of outstanding letters of credit, which reduced our available borrowing capacity to $85.7 million.

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Income Taxes (Schedule of Unrecognized Tax Benefits Rollforward) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 29, 2012	Dec. 31, 2011	Jan. 01, 2011
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
Unrecognized tax benefit - beginning balance	$ 14,640	$ 14,100	$ 6,599
Gross increases (decreases) - tax positions in prior periods	(12,464)	540	0
Gross increases - current-period tax positions	0	0	7,501
Unrecognized tax benefit - ending balance	$ 2,176	$ 14,640	$ 14,100

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Related Party Transactions (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 29, 2012
Office Campus [Member]
Related Party Transaction [Line Items]
Related Party Transaction, Description of Transaction	Based on management’s projected scope of services, it is anticipated that the total fees will be approximately $3.2 million, and paid over two years through April 2014
Related Party Transaction, Amounts of Transaction	$ 1.4
Parking Facility [Member]
Related Party Transaction [Line Items]
Related Party Transaction, Amounts of Transaction	$ 0.3

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Consolidated Statements Of Operations (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 29, 2012	Dec. 31, 2011	Jan. 01, 2011
Revenues:
System sales	$ 902,799	$ 706,714	$ 550,792
Support, maintenance and services	1,707,329	1,451,747	1,266,977
Reimbursed travel	55,308	44,692	32,453
Total revenues	2,665,436	2,203,153	1,850,222
Costs and expenses:
Cost of system sales	427,456	296,561	221,055
Cost of support, maintenance and services	125,433	100,419	66,848
Cost of reimbursed travel	55,308	44,692	32,453
Sales and client service	1,020,640	869,962	767,152
Software development (Includes amortization of $81,731, $79,098 and $68,994, respectively)	301,370	286,801	272,851
General and administrative	163,567	144,920	130,530
Total costs and expenses	2,093,774	1,743,355	1,490,889
Operating earnings	571,662	459,798	359,333
Other income, net	16,046	9,896	2,879
Earnings before income taxes	587,708	469,694	362,212
Income taxes	(190,476)	(163,067)	(124,940)
Net earnings	$ 397,232	$ 306,627	$ 237,272
Basic earnings per share	$ 2.32	$ 1.82	$ 1.44
Diluted earnings per share	$ 2.26	$ 1.76	$ 1.39
Basic weighted average shares outstanding	170,931	168,634	164,916
Diluted weighted average shares outstanding	175,697	173,867	170,847

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Investments

12 Months Ended

Dec. 29, 2012

Investments [Abstract]

Investments

Investments

Available-for-sale investments at the end of 2012 were as follows:

(In thousands)	Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Cash equivalents:
Money market funds	$	68,267	$	—	$	—		$	68,267
Time deposits	24,068		—		—			24,068
Total cash equivalents	92,335		—		—			92,335
Short-term investments:
Time deposits	90,535		17		(2		)	90,550
Commercial paper	86,500		15		(57		)	86,458
Government and corporate bonds	542,236		497		(76		)	542,657
Total short-term investments	719,271		529		(135		)	719,665
Long-term investments:
Time deposits	6,190		10		(3		)	6,197
Government and corporate bonds	496,845		324		(399		)	496,770
Total long-term investments	503,035		334		(402		)	502,967
Total available-for-sale investments	$	1,314,641	$	863	$	(537	)	$	1,314,967

At December 29, 2012, we also held $6.5 million of investments reported under the cost-method of accounting.

At December 31, 2011, we held cash equivalents, short-term investments and long-term investments of $131.3 million, $531.6 million and $359.3 million, respectively. Investments at December 31, 2011 were classified as held-to-maturity and stated at amortized cost, which approximated fair value.

We sold available-for-sale investments for proceeds of $28.6 million in 2012, resulting in an insignificant gain.

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Acquisitions

12 Months Ended

Dec. 29, 2012

Business Combinations [Abstract]

Business Acquisitions

Business Acquisitions

Anasazi Software, Inc.

On November 26, 2012, we completed the purchase of 100% of the outstanding stock of Anasazi Software, Inc. (Anasazi). Anasazi is a provider of behavioral health technology solutions. We believe the combination of CernerMillennium, including in-patient behavioral health, and Anasazi's community behavioral health solutions will create a more comprehensive offering in the market.

Consideration for the acquisition of Anasazi is expected to total $47.5 million consisting of up-front cash plus contingent consideration, which is payable if we achieve certain revenue milestones during 2013 from Anasazi solutions and services. We valued the contingent consideration at $1.9 million based on a probability-weighted assessment of potential contingent consideration payment scenarios.

The acquisition of Anasazi is being treated as a purchase in accordance with ASC 805, Business Combinations, which requires allocation of the purchase price to the estimated fair values of assets and liabilities acquired in the transaction. The allocation of purchase price is based on management's judgment after evaluating several factors, including a preliminary valuation assessment. The allocation of purchase price is subject to changes as an appraisal of intangible assets and liabilities is finalized and additional information becomes available; however, we do not expect material changes. The following is a summary of the preliminary allocation of purchase price:

(In thousands)	Allocation Amount
Tangible assets and liabilities
Current assets	$	6,026
Property and equipment	798
Current liabilities	(6,605		)
Deferred income taxes, net	(6,594		)
Total net tangible liabilities	(6,375		)
Intangible assets
Customer relationships	12,829
Existing technologies	5,218
Trade names	512
Total intangible assets	18,559
Goodwill	35,281
Total purchase price	$	47,465

The fair values of the acquired intangible assets were estimated by applying the income approach. Such estimations required the use of inputs that were unobservable in the market place (Level 3), including a discount rate that we estimated would be used by a market participant in valuing these assets, projections of revenues and cash flows, and client attrition rates, among others. See Note (4) for further information about the fair value level hierarchy.

The goodwill of $35.3 million arising from the acquisition consists largely of the synergies and economies of scale, including the value of the assembled workforce, expected from combining the operations of Cerner and Anasazi. All of the goodwill was allocated to our Domestic operating segment and is not expected to be deductible for tax purposes. Identifiable intangible assets are being amortized over a weighted-average period of 12 years. The operating results of Anasazi were combined with our operating results subsequent to the purchase date of November 26, 2012. Pro-forma results of operations, assuming this acquisition was made at the beginning of the earliest period presented, have not been presented because the effect of this acquisition was not material to our results.

Clairvia, Inc.

On October 17, 2011, we purchased the net assets of Clairvia, Inc. Clairvia is a developer of health care workforce management solutions, including Care Value Management™ and Physician Scheduler™. The Care Value Management suite was integrated into our broader cloud-based and interoperability platforms, Cerner Healthe Intent and CareAware, which allows us to offer a comprehensive suite of resource management solutions.

Consideration for the acquisition of Clairvia was $38.3 million, which was paid in cash. The allocation of the purchase price to the estimated fair value of the identified tangible and intangible assets acquired and liabilities assumed resulted in goodwill of $24.6 million and $14.1 million in intangible assets, of which $6.8 million and $6.1 million was related to the value of established customer relationships and existing technologies, respectively. The goodwill was allocated to our Domestic operating segment and is expected to be deductible for tax purposes. Identifiable intangible assets are being amortized over a weighted-average period of seven years.

The operating results of Clairvia were combined with our operating results subsequent to the purchase date of October 17, 2011. Pro-forma results of operations have not been presented because the effect of this acquisition was not material to our results.

Resource Systems, Inc.

On May 23, 2011, we completed the purchase of 100% of the outstanding common shares of Resource Systems, Inc., developer of the CareTracker^® point-of-care electronic documentation system primarily used within skilled nursing and assisted living facilities. Cerner believes that there is significant market opportunity for information technology solutions in the long-term care market as the U.S. population ages and life expectancy continues to increase.

Consideration for the acquisition of Resource Systems was $36.3 million consisting of up-front cash plus additional contingent consideration, which was payable upon the achievement of certain revenue and bookings milestones. During 2012, we paid $3.4 million to satisfy all contingent consideration obligations.

The allocation of the purchase price to the estimated fair value of the identified tangible and intangible assets acquired and liabilities assumed resulted in goodwill of $26.1 million and $18.2 million in intangible assets, of which $11.2 million and $6.4 million was related to the value of established customer relationships and existing technologies, respectively. The goodwill was allocated to our Domestic operating segment and is not expected to be deductible for tax purposes. Identifiable intangible assets are being amortized over five years.

The operating results of Resource Systems were combined with our operating results subsequent to the purchase date of May 23, 2011. Pro-forma results of operations have not been presented because the effect of this acquisition was not material to our results.

IMC Health Care, Inc.

On January 4, 2010, we completed the purchase of 100% of the outstanding common shares of IMC Health Care, Inc. (IMC), a provider of employer sponsored on-site health centers. The acquisition of IMC expanded our employer health initiatives, such as on-site employer health centers, occupational health services and wellness programs. Consideration for this transaction was $16.6 million, which was paid in cash.

The allocation of the purchase price to the estimated fair value of the identified tangible and intangible assets acquired and liabilities assumed resulted in goodwill of $11.3 million and $5.1 million in intangible assets, of which $4.1 million was related to the value of established customer relationships.

The goodwill was allocated to our Domestic operating segment and is expected to be deductible for tax purposes. Identifiable intangible assets are being amortized over five years. The operating results of IMC were combined with our operating results subsequent to the purchase date of January 4, 2010.

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Share-Based Compensation

12 Months Ended

Dec. 29, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-Based Compensation and Equity

Share-Based Compensation and Equity

Stock Option and Equity Plans

As of the end of 2012, we had five fixed stock option and equity plans in effect for associates and directors. This includes one plan from which we could issue grants, the Cerner Corporation 2011 Omnibus Equity Incentive Plan (the Omnibus Plan); and four plans from which no new grants are permitted, but some awards remain outstanding (Plans D, E, F, and G).

Awards under the Omnibus Plan may consist of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units, performance grants and bonus shares. At the end of 2012, 7.7 million shares remain available for awards. Stock options granted under the Omnibus Plan are exercisable at a price not less than fair market value on the date of grant. Stock options under the Omnibus Plan typically vest over a period of five years and are exercisable for periods of up to 10 years.

Stock Options

The fair market value of each stock option award is estimated on the date of grant using a lattice option-pricing model. The pricing model requires the use of the following estimates and assumptions:

• Expected volatilities under the lattice model are based on an equal weighting of implied volatilities from traded options on our shares and historical volatility. We use historical data to estimate the stock option exercise and associate departure behavior used in the lattice model; groups of associates (executives and non-executives) that have similar historical behavior are considered separately for valuation purposes.

• The expected term of stock options granted is derived from the output of the lattice model and represents the period of time that stock options granted are expected to be outstanding.

• The risk-free rate is based on the zero-coupon U.S. Treasury bond with a term equal to the contractual term of the awards.

The weighted-average assumptions used to estimate the fair market value of stock options are as follows:

	2012		2011		2010
Expected volatility (%)	34.8	%	36.5	%	40.9	%
Expected term (yrs)	9.1		8.6		9.5
Risk-free rate (%)	2.1	%	2.2	%	2.9	%

Stock option activity for 2012 was as follows:

(In thousands, except per share data)	Number of Shares		Weighted- Average Exercise  Price		Aggregate Intrinsic  Value		Weighted-Average       Remaining       Contractual  Term (Yrs)
Outstanding at beginning of year	12,909		$	23.78
Granted	1,931		81.00
Exercised	(2,521	)	15.87
Forfeited and expired	(283	)	51.27
Outstanding at end of year	12,036		33.97		$	516,168	6.35
Exercisable at end of year	7,265		$	17.72	$	423,982	5.13

	For the Years Ended
(In thousands, except for grant date fair values)	2012		2011		2010
Weighted-average grant date fair values	$	37.04	$	28.89	$	22.42
Total intrinsic value of options exercised	$	152,117	$	117,601	$	88,876
Cash received from exercise of stock options	38,147		38,900		34,724
Tax benefit realized upon exercise of stock options	55,952		44,908		33,802

As of the end of 2012, there was $99.3 million of total unrecognized compensation cost related to stock options granted under all plans. That cost is expected to be recognized over a weighted-average period of 3.20 years.

Non-vested Shares

Non-vested shares are valued at fair market value on the date of grant and will vest provided the recipient has continuously served on the Board of Directors through such vesting date or, in the case of an associate, provided that performance measures are attained. The expense associated with these grants is recognized over the period from the date of grant to the vesting date, when achievement of the performance condition is deemed probable.

Non-vested share activity for 2012 was as follows:

(In thousands, except per share data)	Number of Shares		Weighted-Average Grant Date Fair Value
Outstanding at beginning of year	254		$	47.75
Granted	99		76.55
Vested	(52	)	50.24
Forfeited	—		—
Outstanding at end of year	301		$	56.82

	For the Years Ended
(In thousands, except for grant date fair values)	2012		2011		2010
Weighted average grant date fair values for shares granted during the year	$	76.55	$	54.07	$	41.09
Total fair value of shares vested during the year	$	2,612	$	2,527	$	1,147

As of the end of 2012, there was $8.5 million of total unrecognized compensation cost related to non-vested share awards granted under all plans. That cost is expected to be recognized over a weighted-average period of 1.31 years.

Associate Stock Purchase Plan

We established an Associate Stock Purchase Plan (ASPP) in 2001, which qualifies under Section 423 of the Internal Revenue Code. Each individual employed by us and associates of our United States based subsidiaries, except as provided below, are eligible to participate in the Plan (Participants). The following individuals are excluded from participation: (a) persons who, as of the beginning of a purchase period under the Plan, have been continuously employed by us or our domestic subsidiaries for less than two weeks; (b) persons who, as of the beginning of a purchase period, own directly or indirectly, or hold options or rights to acquire under any agreement or Company plan, an aggregate of 5% or more of the total combined voting power or value of all outstanding shares of all classes of Company Common Stock; and, (c) persons who are customarily employed by us for less than 20 hours per week or for less than five months in any calendar year. Participants may elect to make contributions from 1% to 20% of compensation to the ASPP, subject to annual limitations determined by the Internal Revenue Service. Participants may purchase Company Common Stock at a 15% discount on the last business day of the option period. The purchase of our Common Stock is made through the ASPP on the open market and subsequently reissued to the associates. The difference of the open market purchase and the participant’s purchase price is being recognized as compensation expense.

Share Based Compensation Cost

Our stock option and non-vested share awards qualify for equity classification. The costs of our ASPP, along with participant contributions, are recorded as a liability until open market purchases are completed. The amounts recognized in the consolidated statements of operations with respect to stock options, non-vested shares and ASPP are as follows:

	For the Years Ended
(In thousands)	2012			2011			2010
Stock option and non-vested share compensation expense	$	36,113		$	27,919		$	23,723
Associate stock purchase plan expense	2,859			2,180			1,692
Amounts capitalized in software development costs, net of amortization	(860		)	(620		)	(512		)
Amounts charged against earnings, before income tax benefit	$	38,112		$	29,479		$	24,903
Amount of related income tax benefit recognized in earnings	$	14,578		$	11,256		$	9,329

Preferred Stock

As of the end of 2012 and 2011, we had 1.0 million shares of authorized but unissued preferred stock, $0.01 par value.

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Hedging Activities

12 Months Ended

Dec. 29, 2012

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Hedging Activities

Hedging Activities

We designated all of our Great Britain Pound (GBP) denominated long-term debt as a net investment hedge of our U.K. operations. The objective of the hedge is to reduce our foreign currency exposure in our U.K. subsidiary investment. Changes in the exchange rate between the United States Dollar (USD) and GBP, related to the notional amount of the hedge, are recognized as a component of other comprehensive income (loss), to the extent the hedge is effective. The following tables represent the fair value of our net investment hedge included within the consolidated balance sheets and the related unrealized gain or loss, net of related income tax effects, on the net investment hedge recognized in comprehensive income:

(In thousands)		2012
Derivatives Designated	Balance Sheet Classification	Fair Value		Net Unrealized Loss
Net investment hedge	Short-term liabilities	$	15,015	$	451
Net investment hedge	Long-term liabilities	30,030		981
Total net investment hedge		$	45,045	$	1,432

(In thousands)		2011
Derivatives Designated	Balance Sheet Classification	Fair Value		Net Unrealized Loss
Net investment hedge	Short-term liabilities	$	14,421	$	133
Net investment hedge	Long-term liabilities	43,262		1,381
Total net investment hedge		$	57,683	$	1,514

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Share-Based Compensation (Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions) (Details)	12 Months Ended
	Dec. 29, 2012	Dec. 31, 2011	Jan. 01, 2011
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Expected volatility (%)	34.80%	36.50%	40.90%
Expected term (yrs)	9 years 1 month 12 days	8 years 6 months 22 days	9 years 6 months 0 days
Risk-free rate (%)	2.10%	2.20%	2.90%

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Property and Equipment

12 Months Ended

Dec. 29, 2012

Property, Plant and Equipment [Abstract]

Property and Equipment

Property and Equipment

A summary of property, equipment and leasehold improvements stated at cost, less accumulated depreciation and amortization, is as follows:

(In thousands)	Depreciable Lives (Yrs)			2012		2011
Computer and communications equipment	1	—	5	$	817,186	$	741,547
Land, buildings and improvements	12	—	50	281,798		207,069
Leasehold improvements	1	—	15	146,004		163,794
Furniture and fixtures	5	—	12	63,848		61,499
Capital lease equipment	3	—	5	3,194		5,914
Other equipment	3	—	20	575		383
				1,312,605		1,180,206
Less accumulated depreciation and leasehold amortization				742,897		691,210
Total property and equipment, net				$	569,708	$	488,996

Depreciation and leasehold amortization expense for 2012, 2011 and 2010 was $120.1 million, $117.9 million and $111.4 million, respectively.

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Receivables (Schedule of Sales-Type Leases) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 29, 2012	Dec. 31, 2011
Receivables [Abstract]
Minimum lease payments receivable	$ 152,112	$ 60,695
Less: Unearned income	8,206	5,347
Total lease receivables	143,906	55,348
Less: Long-term receivables included in other assets	114,214	46,351
Current portion of lease receivables	$ 29,692	$ 8,997

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Fair Value Measurements

12 Months Ended

Dec. 29, 2012

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

We determine fair value measurements used in our consolidated financial statements based upon the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

• Level 1 – Valuations based on quoted prices in active markets for identical assets or liabilities that the entity has the ability to access.

• Level 2 – Valuations based on quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.

• Level 3 – Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The following table details our financial assets measured and recorded at fair value on a recurring basis at the end of 2012:

(In thousands)
		Fair Value Measurements Using
Description	Balance Sheet Classification	Level 1		Level 2		Level 3
Money market funds	Cash equivalents	$	68,267	$	—	$	—
Time deposits	Cash equivalents	—		24,068		—
Time deposits	Short-term investments	—		90,550		—
Commercial paper	Short-term investments	—		86,458		—
Government and corporate bonds	Short-term investments	—		542,657		—
Time deposits	Long-term investments	—		6,197		—
Government and corporate bonds	Long-term investments	—		496,770		—

The following table details our financial assets measured, but not recorded, at fair value on a recurring basis at the end of 2011:

(In thousands)
		Fair Value Measurements Using
Description	Balance Sheet Classification	Level 1		Level 2		Level 3
Money market funds	Cash equivalents	$	123,919	$	—	$	—
Time deposits	Cash equivalents	—		7,358		—
Time deposits	Short-term investments	—		67,632		—
Commercial paper	Short-term investments	—		23,250		—
Government and corporate bonds	Short-term investments	—		440,753		—
Time deposits	Long-term investments	—		19,579		—
Government and corporate bonds	Long-term investments	—		337,245		—

We estimate the fair value of our long-term, fixed rate debt using a Level 3 discounted cash flow analysis based on current borrowing rates for debt with similar maturities. The fair value of our long-term debt, including current maturities, at the end of 2012 and 2011 was approximately $59.0 million and $72.6 million, respectively. The carrying amount of such fixed-rate debt at the end of 2012 and 2011 was $54.8 million and $67.5 million, respectively.

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Receivables

12 Months Ended

Dec. 29, 2012

Receivables [Abstract]

Receivables

Receivables

Receivables consist of accounts receivable, contracts receivable, and the current portion of amounts due under sales-type leases. Accounts receivable represent recorded revenues that have been billed. Contracts receivable represent recorded revenues that are billable by us at future dates under the terms of a contract with a client. Billings and other consideration received on contracts in excess of related revenues recognized are recorded as deferred revenue. Substantially all receivables are derived from sales and related support and maintenance and professional services of our clinical, administrative and financial information systems and solutions to health care providers located throughout the United States and in certain non-U.S. countries.

We perform ongoing credit evaluations of our clients and generally do not require collateral from our clients. We provide an allowance for estimated uncollectible accounts based on specific identification, historical experience and our judgment. Provisions for losses on uncollectible accounts for 2012, 2011, and 2010 totaled $13.5 million, $11.4 million and $9.9 million, respectively.

A summary of net receivables is as follows:

(In thousands)	2012		2011
Gross accounts receivable	$	563,141	$	496,706
Less: Allowance for doubtful accounts	33,230		24,270
Accounts receivable, net of allowance	529,911		472,436
Contracts receivable	18,245		81,776
Current portion of lease receivables	29,692		8,997
Total receivables, net	$	577,848	$	563,209

Lease receivables represent our net investment in sales-type leases resulting from the sale of certain medical devices to our clients. The components of our net investment in sales-type leases are as follows:

(In thousands)	2012		2011
Minimum lease payments receivable	$	152,112	$	60,695
Less: Unearned income	8,206		5,347
Total lease receivables	143,906		55,348
Less: Long-term receivables included in other assets	114,214		46,351
Current portion of lease receivables	$	29,692	$	8,997

Future minimum lease payments to be received under existing sales-type leases for the next five years are as follows:

(In thousands)
2013	$	33,145
2014	36,840
2015	36,782
2016	32,477
2017	12,868

During the second quarter of 2008, Fujitsu Services Limited’s (Fujitsu) contract as the prime contractor in the National Health Service (NHS) initiative to automate clinical processes and digitize medical records in the Southern region of England was terminated by the NHS. This had the effect of automatically terminating our subcontract for the project. We are in dispute with Fujitsu regarding Fujitsu’s obligation to pay the amounts comprised of accounts receivable and contracts receivable related to that subcontract, and we are working with Fujitsu to resolve these issues based on processes provided for in the contract. Part of that process requires resolution of disputes between Fujitsu and the NHS regarding the contract termination. As of December 29, 2012, it remains unlikely that the matter will be resolved in the next 12 months. Therefore, these receivables have been classified as long-term and represent less than the majority of other long-term assets at the end of 2012 and 2011. While the ultimate collectability of the receivables pursuant to this process is uncertain, we believe that we have valid and equitable grounds for recovery of such amounts and that collection of recorded amounts is probable.

During 2012 and 2011, we received total client cash collections of $2.7 billion and $2.2 billion, respectively, of which $69.1 million and $68.2 million were received from third party arrangements with non-recourse payment assignments.

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Goodwill and Other Intangible Assets

12 Months Ended

Dec. 29, 2012

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

Goodwill and Other Intangible Assets

The changes in the carrying amounts of goodwill were as follows:

(In thousands)	2012		2011
Beginning Balance	$	211,826	$	161,374
Goodwill recorded in connection with business acquisitions	35,281		51,100
Foreign currency translation adjustment and other	509		(648		)
Ending Balance	$	247,616	$	211,826

Our intangible assets subject to amortization are amortized on a straight-line basis, and are summarized as follows:

	2012				2011
(In thousands)	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Purchased software	$	153,330	$	67,178	$	94,963	$	55,305
Customer lists	90,376		62,403		77,513		58,259
Patents	10,877		4,562		10,298		2,997
Other	16,419		4,814		11,460		2,307
Total	$	271,002	$	138,957	$	194,234	$	118,868
Intangible assets, net			$	132,045			$	75,366

Amortization expense for 2012, 2011 and 2010 was $20.3 million, $14.7 million and $12.0 million, respectively.

Estimated aggregate amortization expense for each of the next five years is as follows:

(In thousands)
2013	$	29,015
2014	27,315
2015	24,850
2016	20,286
2017	13,555

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Property and Equipment Schedule of Useful Lives (Details)	12 Months Ended
	Dec. 29, 2012
Maximum [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	50 years 0 months 0 days
Minimum [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	1 year 0 months 0 days
Computer and communications equipment | Maximum [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	5 years
Computer and communications equipment | Minimum [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	1 year
Land, buildings and improvements | Maximum [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	50 years
Land, buildings and improvements | Minimum [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	12 years
Leasehold improvements | Maximum [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	15 years
Leasehold improvements | Minimum [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	1 year
Furniture and fixtures | Maximum [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	12 years
Furniture and fixtures | Minimum [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	5 years
Capital lease equipment | Maximum [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	5 years
Capital lease equipment | Minimum [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	3 years
Other equipment | Maximum [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	20 years
Other equipment | Minimum [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	3 years

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Share-Based Compensation (Schedule Of Stock Options Activity) (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 29, 2012
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Outstanding at beginning of year, number of shares	12,909
Outstanding at beginning of year, weighted-average exercise price	$ 23.78
Granted, number of shares	1,931
Granted, weighted-average exercise price	$ 81.00
Exercised, number of shares	(2,521)
Exercised, weighted-average exercise price	$ 15.87
Forfeited and expired, number of shares	(283)
Forfeited and expired, weighted-average exercise price	$ 51.27
Outstanding end of year, number of shares	12,036
Outstanding at end of year, weighted-average exercise price	$ 33.97
Outstanding at end of year, aggregate intrinsic value	$ 516,168
Outstanding at end of year, weighted-average remaining contractual term	6 years 4 months 6 days
Exercisable at end of year, number of shares	7,265
Exercisable at end of year, weighted-average exercise price	$ 17.72
Exercisable at end of year, aggregate intrinsic value	$ 423,982
Exercisable at end of year, weighted-average remaining contractual term	5 years 1 month 18 days

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Goodwill and Other Intangible Assets (Schedule of Finite-Lived Intangible Assets) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 29, 2012	Dec. 31, 2011
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 271,002	$ 194,234
Accumulated Amortization	138,957	118,868
Intangible assets, net	132,045	75,366
Software
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	153,330	94,963
Accumulated Amortization	67,178	55,305
Customer Lists
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	90,376	77,513
Accumulated Amortization	62,403	58,259
Patents
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	10,877	10,298
Accumulated Amortization	4,562	2,997
Other Intangible Assets
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	16,419	11,460
Accumulated Amortization	$ 4,814	$ 2,307

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Property and Equipment Schedule of Property and Equipment (Details) (USD $) In Thousands, unless otherwise specified	Dec. 29, 2012	Dec. 31, 2011
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 1,312,605	$ 1,180,206
Less accumulated depreciation and leasehold amortization	742,897	691,210
Total property and equipment, net	569,708	488,996
Computer and communications equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	817,186	741,547
Land, buildings and improvements
Property, Plant and Equipment [Line Items]
Property and equipment, gross	281,798	207,069
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property and equipment, gross	146,004	163,794
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Property and equipment, gross	63,848	61,499
Capital lease equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	3,194	5,914
Other equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 575	$ 383

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Commitments (Schedule of Aggregate Future Minimum Payments for Non-Cancelable Operating Leases) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 29, 2012
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]
2013	$ 24,943
2014	22,843
2015	16,803
2016	12,210
2017	11,911
2018 and thereafter	40,133
Total	$ 128,843

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Fair Value Measurements (Tables)

12 Months Ended

Dec. 29, 2012

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The following table details our financial assets measured and recorded at fair value on a recurring basis at the end of 2012:

(In thousands)
		Fair Value Measurements Using
Description	Balance Sheet Classification	Level 1		Level 2		Level 3
Money market funds	Cash equivalents	$	68,267	$	—	$	—
Time deposits	Cash equivalents	—		24,068		—
Time deposits	Short-term investments	—		90,550		—
Commercial paper	Short-term investments	—		86,458		—
Government and corporate bonds	Short-term investments	—		542,657		—
Time deposits	Long-term investments	—		6,197		—
Government and corporate bonds	Long-term investments	—		496,770		—

Fair Value, by Balance Sheet Grouping

The following table details our financial assets measured, but not recorded, at fair value on a recurring basis at the end of 2011:

(In thousands)
		Fair Value Measurements Using
Description	Balance Sheet Classification	Level 1		Level 2		Level 3
Money market funds	Cash equivalents	$	123,919	$	—	$	—
Time deposits	Cash equivalents	—		7,358		—
Time deposits	Short-term investments	—		67,632		—
Commercial paper	Short-term investments	—		23,250		—
Government and corporate bonds	Short-term investments	—		440,753		—
Time deposits	Long-term investments	—		19,579		—
Government and corporate bonds	Long-term investments	—		337,245		—

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Basis of Presentation, Nature of Operations and Summary of Significant Accounting Policies (Details)	12 Months Ended
	Dec. 29, 2012
Minimum [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	1 year 0 months 0 days
Maximum [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	50 years 0 months 0 days
Software Development [Member]
Property, Plant and Equipment [Line Items]
Finite-Lived Intangible Asset, Useful Life	5 years 0 months 0 days
Leasehold improvements | Minimum [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	1 year
Leasehold improvements | Maximum [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	15 years

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Income Taxes

12 Months Ended

Dec. 29, 2012

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Income tax expense (benefit) for 2012, 2011 and 2010 consists of the following:

	For the Years Ended
(In thousands)	2012			2011			2010
Current:
Federal	$	164,690		$	162,288		$	85,106
State	13,302			19,061			10,355
Foreign	4,142			3,831			(883		)
Total current expense	182,134			185,180			94,578
Deferred:
Federal	9,035			(15,927		)	22,297
State	4,453			(5,410		)	4,038
Foreign	(5,146		)	(776		)	4,027
Total deferred expense (benefit)	8,342			(22,113		)	30,362
Total income tax expense	$	190,476		$	163,067		$	124,940

Temporary differences between the financial statement carrying amounts and tax basis of assets and liabilities that give rise to significant portions of deferred income taxes at the end of 2012 and 2011 relate to the following:

(In thousands)	2012			2011
Deferred tax assets:
Accrued expenses	$	20,346		$	18,597
Separate return net operating losses	21,412			16,757
Share based compensation	35,323			26,462
Contract and service revenues and costs	17,339			25,022
Other	6,890			5,410
Total deferred tax assets	101,310			92,248
Deferred tax liabilities:
Software development costs	(101,393		)	(91,267		)
Depreciation and amortization	(96,695		)	(85,746		)
Other	(5,537		)	(4,029		)
Total deferred tax liabilities	(203,625		)	(181,042		)
Net deferred tax liability	$	(102,315	)	$	(88,794	)

At the end of 2012, we had net operating loss carry-forwards subject to Section 382 of the Internal Revenue Code for Federal income tax purposes of $7.4 million that are available to offset future Federal taxable income, if any, through 2020. We had net operating loss carry-forwards from non-U.S. jurisdictions of $0.9 million that are available to offset future taxable income, if any, through 2024 and $59.8 million that are available to offset future taxable income, if any, with no expiration. In addition, we had a deferred tax asset for state net operating loss carryforwards of $0.9 million which are available to offset future taxable income, if any, through 2032. We expect to fully realize all these net operating loss carry-forwards in future periods.

At the end of 2012, we had not provided tax on the cumulative undistributed earnings of our foreign subsidiaries of approximately $82 million, because it is our intention to reinvest these earnings indefinitely. If these earnings were distributed, we would be subject to U.S. taxes and foreign withholding taxes, net of U.S. foreign tax credits which may be available. The calculation of this unrecognized deferred tax liability is complex and not practicable.

The effective income tax rates for 2012, 2011, and 2010 were 32%, 35%, and 34%, respectively. These effective rates differ from the Federal statutory rate of 35% as follows:

	For the Years Ended
(In thousands)	2012			2011			2010
Tax expense at statutory rates	$	205,698		$	164,393		$	126,744
State income tax, net of federal benefit	13,856			11,439			10,151
Tax credits	(1,510		)	(5,520		)	(10,568		)
Unrecognized tax benefit (including interest)	(12,832		)	102			7,501
Permanent differences	(19,900		)	(2,472		)	(4,629		)
Other, net	5,164			(4,875		)	(4,259		)
Total income tax expense	$	190,476		$	163,067		$	124,940

A reconciliation of the beginning and ending amount of unrecognized tax benefit is presented below:

(In thousands)	2012			2011		2010
Unrecognized tax benefit - beginning balance	$	14,640		$	14,100	$	6,599
Gross increases (decreases) - tax positions in prior periods	(12,464		)	540		—
Gross increases - current-period tax positions	—			—		7,501
Unrecognized tax benefit - ending balance	$	2,176		$	14,640	$	14,100

All of the unrecognized tax benefit will favorably impact our effective tax rate if recognized. We do not expect to recognize any material portion of our unrecognized tax benefits in the next 12 months. Our federal returns have been examined by the Internal Revenue Service through 2009. We have various state and foreign returns under examination.

The 2012 beginning and ending amounts of accrued interest related to unrecognized tax benefits were $0.9 million and $0.1 million, respectively. We classify interest and penalties as income tax expense in our consolidated statement of operations. No accrual for tax penalties was recorded at the end of the year.

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Commitments

12 Months Ended

Dec. 29, 2012

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

Commitments

Leases

We are committed under operating leases primarily for office and data center space and computer equipment through October 2027. Rent expense for office and warehouse space for our regional and global offices for 2012, 2011 and 2010 was $18.1 million, $17.6 million and $20.5 million, respectively. Aggregate minimum future payments under these non-cancelable operating leases are as follows:

(In thousands)	Operating Lease Obligations
2013	$	24,943
2014	22,843
2015	16,803
2016	12,210
2017	11,911
2018 and thereafter	40,133
	$	128,843

Purchase Obligations

We have purchase commitments with various vendors through 2019. These commitments represent non-cancellable commitments primarily to provide ongoing support, maintenance and service to our clients. Aggregate future payments under these commitments are as follows:

(In thousands)	Purchase Obligations
2013	$	39,654
2014	33,052
2015	12,721
2016	2,594
2017	2,184
2018 and thereafter	4,000
	$	94,205

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Quarterly Results (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 29, 2012	Sep. 29, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Oct. 01, 2011	Jul. 02, 2011	Apr. 02, 2011	Dec. 29, 2012	Dec. 31, 2011	Jan. 01, 2011
Quarterly Financial Information Disclosure [Abstract]
Revenue	$ 710,384	$ 676,482	$ 637,358	$ 641,212	$ 615,626	$ 571,640	$ 524,223	$ 491,664	$ 2,665,436	$ 2,203,153	$ 1,850,222
Earnings before income taxes	167,701	151,047	138,897	130,063	139,964	123,167	110,853	95,710	587,708	469,694	362,212
Net earnings	$ 111,808	$ 98,887	$ 97,829	$ 88,708	$ 91,192	$ 78,835	$ 72,044	$ 64,556	$ 397,232	$ 306,627	$ 237,272
Basic earnings per share	$ 0.65	$ 0.58	$ 0.57	$ 0.52	$ 0.54	$ 0.47	$ 0.43	$ 0.38	$ 2.32	$ 1.82	$ 1.44
Diluted earnings per share	$ 0.63	$ 0.56	$ 0.56	$ 0.51	$ 0.52	$ 0.45	$ 0.42	$ 0.37	$ 2.26	$ 1.76	$ 1.39

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Basis of Presentation, Nature of Operations and Summary of Significant Accounting Policies Revenue Classification (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 29, 2012	Dec. 31, 2011	Jan. 01, 2011
System Sales
Classification Allocations for Single Unit Accounting Arrangements [Line Items]
Revenue Under Single Unit Accounting Arrangements	$ 17.7	$ 23.3	$ 17.5
Support, Maintenance and Services
Classification Allocations for Single Unit Accounting Arrangements [Line Items]
Revenue Under Single Unit Accounting Arrangements	$ 140.7	$ 97.5	$ 88.1

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Other Income (Tables)

12 Months Ended

Dec. 29, 2012

Nonoperating Income (Expense) [Abstract]

Schedule of Other Nonoperating Income (Expense) [Table Text Block]

A summary of other income is as follows:

	For the Years Ended
(In thousands)	2012			2011			2010
Interest income	$	16,543		$	15,191		$	10,347
Interest expense	(5,068		)	(5,341		)	(6,908		)
Other	4,571			46			(560		)
Other income, net	$	16,046		$	9,896		$	2,879

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Consolidated Statements Of Operations (Parenthetical) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 29, 2012	Dec. 31, 2011	Jan. 01, 2011
Income Statement [Abstract]
Software development, amortization	$ 81,731	$ 79,098	$ 68,994

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Share-Based Compensation (Compensation Expense Recognized In The Condensed Consolidated Statements Of Operations) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 29, 2012	Dec. 31, 2011	Jan. 01, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Amounts charged against earnings, before income tax benefit	$ 38,112	$ 29,479	$ 24,903
Amount of related income tax benefit recognized in earnings	14,578	11,256	9,329
Stock option and non-vested share compensation expense
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Amounts charged against earnings, before income tax benefit	36,113	27,919	23,723
Associate stock purchase plan expense
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Amounts charged against earnings, before income tax benefit	2,859	2,180	1,692
Amounts capitalized in software development costs, net of amortization
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Amounts charged against earnings, before income tax benefit	$ (860)	$ (620)	$ (512)

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Basis of Presentation, Nature of Operations and Summary of Significant Accounting Policies

12 Months Ended

Dec. 29, 2012

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Text Block]

Basis of Presentation, Nature of Operations and Summary of Significant Accounting Policies

Basis of Presentation

The consolidated financial statements include all the accounts of Cerner Corporation and its subsidiaries. All significant intercompany transactions have been eliminated in consolidation.

The consolidated financial statements were prepared using accounting principles generally accepted in the United States. These principles require us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses. Actual results could differ from those estimates.

Our fiscal year ends on the Saturday closest to December 31. Fiscal years 2012, 2011 and 2010 consisted of 52 weeks and ended on December 29, 2012, December 31, 2011 and January 1, 2011, respectively. All references to years in these notes to consolidated financial statements represent fiscal years unless otherwise noted.

Nature of Operations

We design, develop, market, install, host and support health care information technology, health care devices, hardware and content solutions for health care organizations and consumers. We also provide a wide range of value-added services, including implementation and training, remote hosting, operational management services, revenue cycle services, support and maintenance, health care data analysis, clinical process optimization, transaction processing, employer health centers, employee wellness programs and third party administrator services for employer-based health plans.

Summary of Significant Accounting Policies

(a) Revenue Recognition - We recognize software related revenue in accordance with the provisions of Accounting Standards Codification (ASC) 985-605, Software – Revenue Recognition and non-software related revenue in accordance with ASC 605, Revenue Recognition. In general, revenue is recognized when all of the following criteria have been met:

• Persuasive evidence of an arrangement exists;

• Delivery has occurred or services have been rendered;

• Our fee is fixed or determinable; and

• Collection of the revenue is reasonably assured.

The following are our major components of revenue:

• System sales – includes the licensing of computer software, software as a service, deployment period upgrades, installation, content subscriptions, transaction processing and the sale of computer hardware and sublicensed software;

• Support, maintenance and service – includes software support and hardware maintenance, remote hosting and managed services, training, consulting and implementation services; and

• Reimbursed travel – includes reimbursable out-of-pocket expenses (primarily travel) incurred in connection with our client service activities.

We provide for several models of procurement of our information systems and related services. The predominant model involves multiple deliverables and includes a perpetual software license agreement, project-related installation services, implementation and consulting services, software support and either hosting services or computer hardware and sublicensed software, which requires that we allocate revenue to each of these elements.

Allocation of Revenue to Multiple Element Arrangements

For multiple element arrangements that contain software and non-software elements, we allocate revenue to software and software-related elements as a group and any non-software element separately. After the arrangement consideration has been allocated to the non-software elements, revenue is recognized when the basic revenue recognition criteria are met for each element. For the group of software and software-related elements, revenue is recognized under the guidance applicable to software transactions.

Since we do not have vendor specific objective evidence (VSOE) of fair value on software licenses within our multiple element arrangements, we recognize revenue on our software and software-related elements using the residual method. Under the residual method, license revenue is recognized in a multiple-element arrangement when vendor-specific objective evidence of fair value exists for all of the undelivered elements in the arrangement, when software is installed and all other conditions to revenue recognition are met. We allocate revenue to each undelivered element in a multiple-element arrangement based on the element’s respective fair value, with the fair value determined by the price charged when that element is sold separately. Specifically, we determine the fair value of the software support, hardware maintenance, sublicensed software support, remote hosting, subscriptions and software as a service portions of the arrangement based on the substantive renewal price for these services charged to clients; professional services (including training and consulting) portion of the arrangement, other than installation services, based on hourly rates which we charge for these services when sold apart from a software license; and sublicensed software based on its price when sold separately from the software. The residual amount of the fee after allocating revenue to the fair value of the undelivered elements is attributed to the licenses for software solutions, including project-related installation services. If evidence of the fair value cannot be established for the undelivered elements of a license agreement using VSOE, the entire amount of revenue under the arrangement is deferred until these elements have been delivered or VSOE of fair value can be established.

We also enter into arrangements that include multiple non-software deliverables. For each element in a multiple element arrangement that does not contain software-related elements to be accounted for as a separate unit of accounting, the following must be met: the delivered products or services have value to the client on a stand-alone basis; and for an arrangement that includes a general right of return relative to the delivered products or services, delivery or performance of the undelivered product or service is considered probable and is substantially controlled by the Company. We allocate the arrangement consideration to each element based on the selling price hierarchy of VSOE of fair value, if it exists, or third-party evidence (TPE) of selling price. If neither VSOE nor TPE are available, we use estimated selling price. After the arrangement consideration has been allocated to the elements, we account for each respective element in the arrangement as described below.

For certain arrangements, revenue for software, implementation services and, in certain cases, support services for which VSOE of fair value cannot be established are accounted for as a single unit of accounting. The revenue recognized from single units of accounting are typically allocated and classified as system sales and support, maintenance and services. If available, the VSOE of fair value of the services provides the basis for support, maintenance and services allocation, and the remaining residual consideration provides the basis for system sales revenue allocations. In cases where VSOE cannot be established, revenue is classified based on the nature of related costs incurred. The following table details the classification allocations for arrangements accounted for as a single unit of accounting:

	For the Years Ended
(In millions)	2012		2011		2010
System sales	$	17.7	$	23.3	$	17.5
Support, maintenance and services	140.7		97.5		88.1

Revenue Recognition Policies for Each Element

We provide project-related installation services when licensing our software solutions, which include project-scoping services, conducting pre-installation audits and creating initial environments. We have deemed installation services to be essential to the functionality of the software and, therefore, recognize the software license over the software installation period using the percentage-of-completion method. We measure the percentage-of-completion based on output measures that reflect direct labor hours incurred, beginning at software delivery and culminating at completion of installation. Installation generally occurs in the same period the contracts are executed but in the past has been extended over a longer period of time depending on client specific factors.

We provide implementation and consulting services. These services vary depending on the scope and complexity of the engagement. Examples of such services may include database consulting, system configuration, project management, testing assistance, network consulting, post conversion review and application management services. Except for limited arrangements where our software requires significant modifications or customization, implementation and consulting services generally are not deemed to be essential to the functionality of the software and, thus, do not impact the timing of the software license recognition. However, if software license fees are tied to implementation milestones, then the portion of the software license fee tied to implementation milestones is deferred until the related milestone is accomplished and related fees become due and payable and non-forfeitable. Implementation fees are recognized over the service period, which may extend from nine months to three years for multi-phased projects.

Remote hosting and managed services are marketed under long-term arrangements generally over periods of five to 10 years. These services are typically provided to clients that have acquired a perpetual license for licensed software and have contracted with us to host the software in our data center. Under these arrangements, the client generally has the contractual right to take possession of the licensed software at any time during the hosting period without significant penalty and it is feasible for the client to either run the software on its own equipment or contract with another party unrelated to us to host the software. Additionally, these services are not deemed to be essential to the functionality of the licensed software or other elements of the arrangement and as such, we allocate a portion of the services fee to the software and recognize it once the client has the ability to take possession of the software. The remaining services fee in these arrangements, as well as the services fee for arrangements where the client does not have the contractual right or the ability to take possession of the software at any time, is generally recognized ratably over the hosting service period.

We also offer our solutions on a software as a service model, providing time-based licenses for our software solutions available within an environment that we manage from our data centers. The data centers provide system and administrative support as well as processing services. Revenue on these services is combined and recognized on a monthly basis over the term of the contract. We capitalize related pre-contract direct set-up costs consisting of third party costs and direct software installation and implementation costs associated with the initial set up of a software as a service client. These costs are amortized over the term of the arrangement.

Software support fees are marketed under annual and multi-year arrangements and are recognized as revenue ratably over the contractual support term. Hardware and sublicensed software maintenance revenues are recognized ratably over the contractual maintenance term.

Subscription and content fees are generally marketed under annual and multi-year agreements and are recognized ratably over the contractual terms.

Hardware and sublicensed software sales are generally recognized when title and risk of loss have transferred to the client.

The sale of equipment under sales-type leases is recorded as system sales revenue at the inception of the lease. Sales-type leases also produce financing income, which is included in system sales revenue and is recognized at consistent rates of return over the lease term.

Where we have contractually agreed to develop new or customized software code for a client as a single element arrangement, we utilize percentage-of-completion accounting, labor-hours method.

Revenue generally is recognized net of any taxes collected from clients and subsequently remitted to governmental authorities.

Payment Arrangements

Our payment arrangements with clients typically include an initial payment due upon contract signing and date-based licensed software payment terms and payments based upon delivery for services, hardware and sublicensed software. Revenue recognition on support payments received in advance of the services being performed are deferred and classified as either current or long term deferred revenue depending on whether the revenue will be earned within one year.

We have periodically provided long-term financing options to creditworthy clients through third party financing institutions and have directly provided extended payment terms to clients from contract date. These extended payment term arrangements typically provide for date based payments over periods ranging from 12 months up to seven years. As a significant portion of the fee is due beyond one year, we have analyzed our history with these types of arrangements and have concluded that we have a standard business practice of using extended payment term arrangements and a long history of successfully collecting under the original payment terms for arrangements with similar clients, product offerings, and economics without granting concessions. Accordingly, we consider the fee to be fixed and determinable in these extended payment term arrangements and, thus, the timing of revenue is not impacted by the existence of extended payments.

Some of these payment streams have been assigned on a non-recourse basis to third party financing institutions. We account for the assignment of these receivables as sales of financial assets. Provided all revenue recognition criteria have been met, we recognize revenue for these arrangements under our normal revenue recognition criteria, and if appropriate, net of any payment discounts from financing transactions.

(b) Cash Equivalents - Cash equivalents consist of short-term marketable securities with original maturities less than 90 days.

(c) Investments – Our short-term investments are primarily invested in time deposits, commercial paper, government and corporate bonds. Our long-term investments are primarily invested in government and corporate bonds with maturities of less than two years.

Effective April 1, 2012, we began reporting all securities in our investment portfolio as available-for-sale. The change resulted in the transfer of investments with an aggregate carrying amount of $1.0 billion from held-to-maturity to available-for-sale, with gross unrealized gains of $0.7 million and gross unrealized losses of $0.7 million. The unrealized gains and losses, net of the related tax effects, were recorded to accumulated other comprehensive income. The decision to transfer the securities to available-for-sale is intended to provide us with financial flexibility in determining whether to hold our investment securities to maturity. Such change contemplates the possibility that securities may be liquidated prior to maturity as we manage through changing market conditions.

Available-for-sale securities are recorded at fair value with the unrealized gains and losses reflected in accumulated other comprehensive income until realized. Realized gains and losses from the sale of available-for-sale securities, if any, are determined on a specific identification basis.

We regularly review investment securities for impairment based on both quantitative and qualitative criteria that include the extent to which cost exceeds fair value, the duration of any market decline, and the financial health of and specific prospects for the issuer. Unrealized losses that are other than temporary are recognized in earnings.

Premiums are amortized and discounts are accreted over the life of the security as adjustments to interest income for our investments. Interest income is recognized when earned.

Refer to Note (3) and Note (4) for further description of these assets and their fair value.

(d) Concentrations - Substantially all of our cash and cash equivalents are held at four major financial institutions. The majority of our cash equivalents consist of money market funds. Deposits held with banks may exceed the amount of insurance provided on such deposits. Generally these deposits may be redeemed upon demand.

As of the end of 2012, we had significant concentration of receivables owed to us by Fujitsu Services Limited, which are currently in dispute. Refer to Note (5) for additional information.

(e) Inventory - Inventory consists primarily of computer hardware and sublicensed software, held for resale. Inventory is recorded at the lower of cost (first-in, first-out) or market.

(f)Property and Equipment - We account for property and equipment in accordance with ASC 360, Property, Plant, and Equipment. Property, equipment and leasehold improvements are stated at cost. Depreciation of property and equipment is computed using the straight-line method over periods of one to 50 years. Amortization of leasehold improvements is computed using a straight-line method over the shorter of the lease terms or the useful lives, which range from periods of one to 15 years.

(g) Software Development Costs - Software development costs are accounted for in accordance with ASC 985-20, Costs of Software to be Sold, Leased or Marketed. Software development costs incurred internally in creating computer software products are expensed until technological feasibility has been established upon completion of a detailed program design. Thereafter, all software development costs incurred through the software’s general release date are capitalized and subsequently reported at the lower of amortized cost or net realizable value. Capitalized costs are amortized based on current and expected future revenue for each software solution with minimum annual amortization equal to the straight-line amortization over the estimated economic life of the solution. We amortize capitalized software development costs over five years.

(h) Goodwill - We account for goodwill under the provisions of ASC 350, Intangibles – Goodwill and Other. Goodwill is not amortized but is evaluated for impairment annually or whenever there is an impairment indicator. All goodwill is assigned to a reporting unit, where it is subject to an annual impairment assessment. Based on these evaluations, there was no impairment of goodwill in 2012, 2011 or 2010. Refer to Note (7) for more information of Goodwill and other intangible assets.

(i)Contingencies - We accrue estimates for resolution of any legal and other contingencies when losses are probable and estimable, in accordance with ASC 450, Contingencies. We currently have no material pending litigation.

The terms of our software license agreements with our clients generally provide for a limited indemnification of such clients against losses, expenses and liabilities arising from third party claims based on alleged infringement by our solutions of an intellectual property right of such third party. The terms of such indemnification often limit the scope of and remedies for such indemnification obligations and generally include a right to replace or modify an infringing solution. To date, we have not had to reimburse any of our clients for any losses related to these indemnification provisions pertaining to third party intellectual property infringement claims. For several reasons, including the lack of prior indemnification claims and the lack of a monetary liability limit for certain infringement cases under the terms of the corresponding agreements with our clients, we cannot determine the maximum amount of potential future payments, if any, related to such indemnification provisions.

From time to time we are involved in routine litigation incidental to the conduct of our business, including for example, employment disputes and litigation alleging solution defects, personal injury, intellectual property infringement, violations of law and breaches of contract and warranties. We believe that no such routine litigation currently pending against us, if adversely determined, would have a material adverse effect on our consolidated financial position, results of operations or cash flows.

(j)Derivative Instruments and Hedging Activities - We account for our hedging activities in accordance with ASC 815, Derivatives and Hedging. Historically, our use of hedging instruments has primarily been to hedge foreign currency denominated assets and liabilities. We record all hedging instruments on our consolidated balance sheets at fair value. For hedging instruments that are designated and qualify as a net investment hedge, the effective portion of the gain or loss on the hedging instrument is reported in the foreign currency translation component of other comprehensive income (loss). Any ineffective portion of the gain or loss on the hedging instrument is recorded in the results of operations immediately. Refer to Note (10) for more information on our hedging activities.

(k) Income Taxes - Income taxes are accounted for in accordance with ASC 740, Income Taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Refer to Note (12) for additional information regarding income taxes.

(l) Earnings per Common Share - Basic earnings per share (EPS) excludes dilution and is computed, in accordance with ASC 260, Earnings Per Share, by dividing income available to common shareholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in our earnings. Refer to Note (13) for additional details of our earnings per share computations.

(m) Accounting for Share-based Payments - We recognize all share-based payments to associates, directors and consultants, including grants of stock options, restricted stock and performance shares, in the financial statements as compensation cost based on their fair value on the date of grant, in accordance with ASC 718, Compensation-Stock Compensation. This compensation cost is recognized over the vesting period on a straight-line basis for the fair value of awards that actually vest. Refer to Note (14) for a detailed discussion of share-based payments.

(n) Foreign Currency - In accordance with ASC 830, Foreign Currency Matters, assets and liabilities of non-U.S. subsidiaries whose functional currency is the local currency are translated into U.S. dollars at exchange rates prevailing at the balance sheet date. Revenues and expenses are translated at average exchange rates during the year. The net exchange differences resulting from these translations are reported in accumulated other comprehensive income. Gains and losses resulting from foreign currency transactions are included in the consolidated statements of operations.

(o) Collaborative Arrangements - In accordance with ASC 808, Collaborative Arrangements, third party costs incurred and revenues generated by arrangements involving joint operating activities of two or more parties that are each actively involved and exposed to risks and rewards of the activities are classified in the consolidated statements of operations on a gross basis only if we are determined to be the principal participant in the arrangement. Otherwise, third party revenues and costs generated by collaborative arrangements are presented on a net basis. Payments between participants are recorded and classified based on the nature of the payments.

(p) Recently Adopted Accounting Pronouncements

Comprehensive Income. On January 1, 2012, we adopted Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) 2011-05, Presentation of Comprehensive Income. ASU 2011-05 requires an entity to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. ASU 2011-05 eliminates the option to present the components of other comprehensive income as part of the statement of changes in equity. These consolidated financial statements include separate consolidated statements of comprehensive income.

Goodwill Impairment. On January 1, 2012, we adopted FASB ASU 2011-08, Testing for Goodwill Impairment. ASU 2011-08 amends existing guidance by giving an entity the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than the carrying amount. The more-likely-than-not threshold is defined as having a likelihood of more than 50 percent. If an entity determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then it is necessary to perform the two-step goodwill impairment test, as currently prescribed by FASB Accounting Standards Codification Topic 350. Otherwise, the two-step goodwill impairment test is not required. The adoption of this standard did not have a material effect on our consolidated financial statements.

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Receivables (Narrative) (Details) (USD $)	12 Months Ended
	Dec. 29, 2012	Dec. 31, 2011	Jan. 01, 2011
Valuation and Qualifying Accounts Disclosure [Line Items]
Client cash collections	$ 2,700,000,000	$ 2,200,000,000
Cash collections received from third party arrangements with nonrecourse payment assignments	69,100,000	68,200,000
Allowance for Doubtful Accounts [Member]
Valuation and Qualifying Accounts Disclosure [Line Items]
Valuation allowances and reserves, charged to cost and expense	$ 13,483,000	$ 11,365,000	$ 9,856,000

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Earnings Per Share (Narrative) (Details) (USD $) In Millions, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 29, 2012	Dec. 31, 2011	Jan. 01, 2011
Earnings Per Share [Abstract]
Antidilutive securities excluded from computation of earnings per share, amount	2.3	2.1	1.2
Antidilutive securities excluded from computation of earnings per share, exercise price, lower range limit	$ 55.24	$ 39.36	$ 29.11
Antidilutive securities excluded from computation of earnings per share, exercise price, upper range limit	$ 85.96	$ 68.45	$ 45.96

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Software Development Costs (Details) (USD $)	12 Months Ended
	Dec. 29, 2012	Dec. 31, 2011	Jan. 01, 2011
Research and Development [Abstract]
Software development costs	$ 319,828,000	$ 290,645,000	$ 284,836,000
Capitalized software development costs	(100,189,000)	(82,942,000)	(80,979,000)
Amortization of capitalized software development costs	81,731,000	79,098,000	68,994,000
Total software development expense	301,370,000	286,801,000	272,851,000
Accumulated capitalized computer software amortization	$ 703,100,000	$ 621,900,000

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Segment Reporting

12 Months Ended

Dec. 29, 2012

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

We have 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, devices and sublicensed software purchased from 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. “Other” includes expenses that have not been allocated to the operating segments, such as software development, marketing, general and administrative, share-based compensation expense and depreciation. Performance of the segments is assessed at the operating earnings level and, therefore, the segment operations have been presented as such. Items such as interest, income taxes, capital expenditures and total assets are managed at the consolidated level and thus are not included in our operating segment disclosures.

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 our operating segments and other expense for 2012, 2011 and 2010:

(In thousands)	Domestic		Global		Other			Total
2012
Revenues	$	2,341,304	$	324,132	$	—		$	2,665,436
Cost of revenues	548,813		59,384		—			608,197
Operating expenses	506,249		131,580		847,748			1,485,577
Total costs and expenses	1,055,062		190,964		847,748			2,093,774
Operating earnings (loss)	$	1,286,242	$	133,168	$	(847,748	)	$	571,662

(In thousands)	Domestic		Global		Other			Total
2011
Revenues	$	1,894,454	$	308,699	$	—		$	2,203,153
Cost of revenues	387,466		54,206		—			441,672
Operating expenses	439,465		126,997		735,221			1,301,683
Total costs and expenses	826,931		181,203		735,221			1,743,355
Operating earnings (loss)	$	1,067,523	$	127,496	$	(735,221	)	$	459,798

(In thousands)	Domestic		Global		Other			Total
2010
Revenues	$	1,562,563	$	287,659	$	—		$	1,850,222
Cost of revenues	272,385		47,971		—			320,356
Operating expenses	417,181		124,546		628,806			1,170,533
Total costs and expenses	689,566		172,517		628,806			1,490,889
Operating earnings (loss)	$	872,997	$	115,142	$	(628,806	)	$	359,333

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Other Income (Schedule of Interest Income and Expense) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 29, 2012	Dec. 31, 2011	Jan. 01, 2011
Nonoperating Income (Expense) [Abstract]
Interest income	$ 16,543	$ 15,191	$ 10,347
Interest expense	(5,068)	(5,341)	(6,908)
Other	4,571	46	(560)
Other income, net	$ 16,046	$ 9,896	$ 2,879

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Software Development Costs (Tables)

12 Months Ended

Dec. 29, 2012

Research and Development [Abstract]

Schedule of Software Development Costs

Information regarding our software development costs is included in the following table:

	For the Years Ended
(In thousands)	2012			2011			2010
Software development costs	$	319,828		$	290,645		$	284,836
Capitalized software development costs	(100,189		)	(82,942		)	(80,979		)
Amortization of capitalized software development costs	81,731			79,098			68,994
Total software development expense	$	301,370		$	286,801		$	272,851

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Other Income

12 Months Ended

Dec. 29, 2012

Nonoperating Income (Expense) [Abstract]

Other Income

Other Income

A summary of other income is as follows:

	For the Years Ended
(In thousands)	2012			2011			2010
Interest income	$	16,543		$	15,191		$	10,347
Interest expense	(5,068		)	(5,341		)	(6,908		)
Other	4,571			46			(560		)
Other income, net	$	16,046		$	9,896		$	2,879

Other income in 2012 includes a $4.5 million gain recognized on the disposition of one of our cost-method investments.