Segment Reporting

12 Months Ended

Jan. 02, 2016

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, expenses associated with our managed services business, marketing expenses, communications expenses and unreimbursed travel expenses. “Other” includes expenses that have not been allocated to the operating segments, such as software development, general and administrative expenses (including the settlement charge discussed in Note (10)), acquisition costs and related adjustments, share-based compensation expense, and certain amortization and depreciation. Performance of the segments is assessed at the operating earnings level by our chief operating decision maker, who is our Chief Executive Officer. 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.

In connection with our acquisition of the Cerner Health Services business, we commenced an evaluation of our methodology for allocating operating expenses to our reportable segments. Effective for our first quarter of 2015, certain expenses historically reported in "Other" have been allocated to the geographic segments. This new allocation reflects the manner in which the business is now managed, subsequent to the acquisition. While this reporting change did not impact our consolidated results, the segment data has been recast to be consistent for all periods presented.

The following table presents a summary of our operating segments and other expense for 2015, 2014 and 2013:

(In thousands)	Domestic		Global		Other			Total
2015
Revenues	$	3,904,454	$	520,813	$	—		$	4,425,267
Cost of revenues	651,826		98,955		—			750,781
Operating expenses	1,577,594		233,047		1,082,709			2,893,350
Total costs and expenses	2,229,420		332,002		1,082,709			3,644,131
Operating earnings (loss)	$	1,675,034	$	188,811	$	(1,082,709	)	$	781,136

(In thousands)	Domestic		Global		Other			Total
2014
Revenues	$	3,021,790	$	380,913	$	—		$	3,402,703
Cost of revenues	542,210		62,167		—			604,377
Operating expenses	1,163,413		182,965		688,864			2,035,242
Total costs and expenses	1,705,623		245,132		688,864			2,639,619
Operating earnings (loss)	$	1,316,167	$	135,781	$	(688,864	)	$	763,084

(In thousands)	Domestic		Global		Other			Total
2013
Revenues	$	2,550,115	$	360,633	$	—		$	2,910,748
Cost of revenues	458,540		56,182		—			514,722
Operating expenses	977,334		155,093		687,587			1,820,014
Total costs and expenses	1,435,874		211,275		687,587			2,334,736
Operating earnings (loss)	$	1,114,241	$	149,358	$	(687,587	)	$	576,012