CORRESP 1 filename1.htm corresp
 

September 11, 2006
VIA EDGAR, FACSIMILE AND OVERNIGHT MAIL
Kathleen Collins
Accounting Branch Chief
Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549
         
 
  Re:   Cerner Corporation
 
      Form 10-K for Fiscal Year Ended December 31, 2005
 
      Form 8-K Filed on February 2, 2006
 
      Form 8-K Filed on April 30, 2006
 
      File No. 000-15386
Dear Ms. Collins:
We are in receipt of the letter dated August 11, 2006 (the “Second Staff Letter”), whereby the Staff of the Securities and Exchange Commission (the “Commission”) responded to our letter dated July 12, 2006 and submitted additional comments with respect to certain disclosures contained in the Annual Report on Form 10-K for the year ended December 31, 2005, the Current Report on Form 8-K filed on February 2, 2006 and the Current Report on Form 8-K filed on April 30, 2006 of Cerner Corporation (the “Company”). On behalf of the Company, set forth below are the Company’s responses to the additional comments identified in your Second Staff Letter. For your convenience, we have repeated each of the comments set forth in the Second Staff Letter and followed each comment with the Company’s response.
  1.   We note your response to our prior comment no. 2 and we reissue the portion of the comment requesting an analysis of each new product release or enhancement capitalized in fiscal 2003, 2004 and 2005. Also provide us with the supplemental summary sheet of software development costs referred to in the last sentence of your response. In your response address or provide the following (for each new product release or enhancement):
Company Response:
The supplemental summary sheet of software development costs by major product category for the past three years along with the dates of the 8 software releases issued by the Company from 2003 to 2005 is attached as Appendix A.
  a.   The date initial development activities were started.
Company Response: See discussion below
  b.   The date technological feasibility was first established and costs were first capitalized.

 

 

Kathleen Collins
Accounting Branch Chief
Securities and Exchange Commission
September 11, 2006
Page 2
Company Response: See discussion below
  c.   The date when the product (or enhancement) was available for general release.
Company Response: See discussion below
  d.   The amount of costs incurred prior to reaching technological feasibility (i.e., expensed) and during the period from achievement of technological feasibility to the date the product or enhancement was available for general release (i.e., capitalized costs).
Company Response: See discussion below
  e.   A discussion of how the Company evaluated the product (or enhancement) pursuant to the criteria in paragraph 4 of SFAS 86 in determining that technological feasibility had been achieved.
Company Response:
There is a point in time in the Company’s software development process that allows management the opportunity to evaluate the product (or enhancement) pursuant to the criteria in paragraph 4 of SFAS No. 86 in determining that technological feasibility has been achieved. This point in time is when the “Technical Design” document that has been written by the system architects has been approved and is ready for the engineers to begin writing the code. It is at this point in time that the Company has completed a detailed program design (which includes linking back to the requirements or product specifications) which is ready to be coded and a determination has been made that Cerner has the necessary skills, hardware and technology to complete the design. In addition, at this point the “Technical Design” document is used to develop test plans. The test plans are used later in the process to verify that the enhancements that were written meet the specifications in the detailed program design. As part of the approval of the “Technical Design” document, the project is reviewed for high-risk development issues. That is, an evaluation is made prior to approval, which takes into account the risk aspect of the development. The resolution of high risk development issues is evidenced generally by the maturity of the suite of products that Cerner has developed that operate on a mature and stable platform that was developed in the late 1990’s. This platform has seen wide-spread adoption as evidenced by the number of Cerner clients which are currently using the software.
Once the design is completed and the test plans are written, engineers write the code to create the enhancement. The changes to the code are then sent to testing, where they are compared with the technical design and the detailed requirements by running the updated code through the test plans. Capitalization of costs stops prior to the beginning of the testing phase.
Once the testing is successfully completed, the changes to the code receive their certification. They are then packaged for release to clients.

 

 

Kathleen Collins
Accounting Branch Chief
Securities and Exchange Commission
September 11, 2006
Page 3
  f.   With regard to enhancements, tell us whether the new release was issued in response to promises made at the time of sale of the original software product.
Company Response:
The Company policy is not to commit to enhancements at the time of sale of the original software product. We have limited instances where we commit to clients a specific enhancement at the time of the sale of the original product. In those instances we account for the specific enhancements as specified upgrade rights for which we do not have VSOE and, accordingly, all revenue is deferred until the specific upgrade right is delivered.
  g.   A discussion of the nature of the costs capitalized.
Company Response:
The capitalized software development costs are predominately (more than 95% of the total costs) salary paid to the software engineers that are working on the projects to write code and related payroll benefits. In addition, there are outside expenses, such as outside labor, directly related to enhancements which are capitalized. These amounts are less than 5% of the total amount capitalized.
  h.   The timing of commencing amortization of software costs from the date they are capitalized and the authoritative literature that supports your accounting.
Company Response:
Prior to January 1, 2006, given the multitude of new product and enhancement releases which were released at varying times throughout each year, we consistently applied a policy whereby we began amortizing all software development costs capitalized during each fiscal year on the first day of the following fiscal year. The Company recognized that this policy was not technically consistent with paragraph 8 of SFAS 86. However, we periodically estimated the impact to the financial statements of utilizing this policy and believed the financial statement impact of our policy was not materially different than that prescribed by paragraph 8 of SFAS 86. For example, in 2005 we estimated that if the Company had been strictly following the guidance in paragraph 8 for amortizing software costs previously capitalized, net income before taxes would have been $1.7M higher in 2005 than what was reported.
Effective January 1, 2006, we ceased utilizing this policy for new releases and began amortizing the capitalized costs associated with each product/enhancement group when released to clients. We stopped utilizing the previous policy mentioned above on January 1, 2006 mainly due to the fact that the Company is moving towards having only one release to clients during each year and believed there was more likelihood that our previous policy could result in a material difference from that prescribed by paragraph 8 of SFAS 86.

 

 

Kathleen Collins
Accounting Branch Chief
Securities and Exchange Commission
September 11, 2006
Page 4
  i.   The basis for the amortization period of the capitalized software costs.
Company Response:
We amortize software costs capitalized on a product-by-product basis at the greater of the amount computed using the ratio of current gross revenues to the total of future gross revenues for that product or the straight line method over a five (5) year period. The five (5) year period is an estimate of the economic life of the software given its current functionality. Historically, the Company’s software programs are used by its clients for at least five years and can be used a decade or more.
Company Response Regarding Items 1.a thru 1.d above:
We want to be responsive to the Staff’s request for information, however, we do not have readily available an analysis that shows all of the information requested. We have provided in Appendix B and Appendix C detailed information that we believe will, in substance, provide the information requested as further described below.
The Company’s process is not designed to track each individual enhancement in a separate project code whereby the accumulated capitalized costs for such individual enhancement would be available. Rather, detailed program designs are completed for groups of related enhancements that add to the functionality of Cerner’s products that extend the life of those products or significantly improve the marketability of the original products. Because detailed program designs are completed for groups of like enhancements, the Company’s process is designed to track costs by project numbers assigned to the individual products that are being enhanced. Once technological feasibility is achieved, employees code their time and submit it weekly, through the Company’s payroll system, to project numbers established to capture development costs for the respective products. Only those project numbers, which have been deemed “enhancements” or “new solutions”, and have reached technological feasibility, as described above, are capitalized. Any charges related to “bug fixes” or “corrections” are expensed as charged.
The Company does not track by individual product its design and research and development expenses which are not capitalized. Therefore, we are unable to provide the amount of costs incurred prior to reaching technological feasibility for each new product or product enhancement as requested by the Staff in item 1.d. The total research and development expense for 2005, 2004 and 2003 was $226,238,000, $188,264,000 and $179,999,000, respectively.
Appendix B contains the software development costs capitalized by project number for each year from 2003 through 2005. Appendix C contains several pages from the 231 page report (please let us know if you desire the entire list) that provides a detailed description of each enhancement. Certain of the costs noted within Appendix C by project show immaterial

 

 

Kathleen Collins
Accounting Branch Chief
Securities and Exchange Commission
September 11, 2006
Page 5
negative amounts. These amounts are due to miscellaneous adjustments made subsequent to year end between projects resulting in insignificant negative amounts for the particular projects. Appendix D is a subset of Appendix C for the May 2005 upgrades release, and contains the start date of the project, technological feasibility date, completion date, release date and the project number in which the costs were accumulated. This information for each enhancement is available, but currently is not maintained within the same database. Accumulating the information in Appendix D is a manual process and therefore has only been provided for a subset of the May 2005 release.
  2.   We note your responses to our prior comment no. 5 and prior comment no. 6. Please address the following:
  a.   Describe the relevant terms of an example transaction and provide a detailed description and analysis of how you evaluate the arrangements for purposes of revenue recognition. In this regard, provide us with total arrangement fee, a description of each element included in the arrangement, timing of delivery for each element, application of applicable paragraphs in EITF 00-21 to determine units of accounting, allocation of arrangement fee, timing of revenue recognition for each element, application of SOP 97-2, application of other authoritative literature.
Company Response:
The Company provides several models for the procurement of its clinical, financial and administrative information systems. The predominant arrangement type contains a perpetual software license agreement, project-related installation services, implementation services, knowledge content subscriptions, software support and either remote hosting or computer hardware and third-party sublicensed software. The example transaction provided below includes the following elements: software, project-related installation services, implementation services, software support, computer equipment (hardware), third-party sublicensed software and knowledge content subscriptions.
The first step in our allocation process entails determining which elements of the arrangement are subject to specific higher level GAAP literature and those that are not. In the example transaction, using the guidance in EITF 03-5, we concluded that the software license, project-related installation services, implementation services, software support, sublicensed software elements and knowledge content subscriptions are all software-related elements subject to the accounting prescribed by SOP 97-2. As noted in our previous response, we do not believe the hardware is a software-related element. Furthermore, although the software and project-related installation services are software-related elements, we have concluded that the installation services are essential to the functionality of the software. Therefore, these two elements are combined and accounted for under SOP 81-1 pursuant to paragraph 65 of SOP 97-2. In this example arrangement, we concluded that we have elements that are within the

 

 

Kathleen Collins
Accounting Branch Chief
Securities and Exchange Commission
September 11, 2006
Page 6
scope of SOP 97-2, SOP 81-1 and the non-software element (i.e. hardware) that is not within the scope of higher level GAAP literature. Neither SOP 97-2 nor SOP 81-1 provide guidance for separating deliverables within their scope from those not in their scope. Thus, we have concluded that our arrangements would fall within the guidance of paragraph 4.a.iii. of EITF 00-21.
The next step in our allocation process is to determine whether we meet the criteria for separation of the various deliverables pursuant to paragraph 9 of EITF 00-21. We believe we meet the criteria for separation of the hardware deliverable from the remainder of the deliverables (SOP-97 and SOP 81-1), because the SOP 97-2 and SOP 81-1 deliverables have stand-alone value, we have objective and reliable evidence of fair value for the hardware, and we do not provide for a general right of return in our arrangements. By analogy to TPA 5100.49, we believe that we have a basis for separating the software-related elements not subject to SOP 81-1 from the SOP 81-1 deliverables as we have VSOE for all of the undelivered software-related elements not subject to contract accounting.
We do not have VSOE for the deliverables subject to SOP 81-1 (i.e., software and project-installation services). However, as noted above, we do have VSOE or objective and reliable evidence of fair value for all other deliverables in the arrangement. Because we have concluded that the hardware deliverable qualifies for separation pursuant to EITF 00-21, and that we have a basis for separation of the software-related elements not subject to SOP 81-1 from those that are subject to SOP 81-1 based on VSOE consistent with TPA 5100.49, we have concluded that we may apply the residual method to determine the amount of the total fee that is attributable to the SOP 81-1 deliverables provided certain criteria are met. That is, solely for the purposes of allocating arrangement consideration under EITF 00-21 between non-SOP 81-1 deliverables and SOP 81-1 deliverables, we have concluded that the residual method may be applied after the SOP 81-1 services have commenced if the SOP 81-1 services will be completed prior to delivery of or completion of the non-SOP 81-1 elements. In other words, we believe that provided that evidence of fair value exists for all undelivered elements other than contract accounting elements, the contract accounting services have begun, and the contract accounting elements will be completed prior to the delivery or completion of the remaining elements, then the arrangement fee can be allocated to the non-SOP 81-1 elements under the residual method, with the remaining consideration allocated to the in-process contract accounting unit. This treatment is consistent with the guidance contained in TPA 5100.49 on separating PCS from the elements subject to contract accounting.
In accordance with the above guidance, we start with the total arrangement fee and then subtract the amounts allocated to each non-SOP 81-1 deliverable based on VSOE or objective and reliable evidence of fair value to determine the residual amount allocated to the software and installation services subject to SOP 81-1. Because the timing of delivery of the installation of services has commenced upon delivery of the software and is completed over a short duration, we believe we qualify for separation concurrent with the delivery of the software. The table below illustrates our allocation exercise for the example transaction:

 

 

Kathleen Collins
Accounting Branch Chief
Securities and Exchange Commission
September 11, 2006
Page 7
         
Stated contract fees        
Software including web-based tools
   $ *  
Installation
   $ *  
Software support (PCS)
   $ *  
Implementation services
   $ *  
Subscriptions
   $ *  
Hardware
   $ *  
Sublicensed software
   $ *  
 
      
Total arrangement fee
   $ *  
 
      
                 
Fee allocation                
Total Arrangement Fee
   $ *          
 
                
Hardware
 ( $ * )     A  
Implementation Services
 ( $ * )     B  
PCS (including implied PCS)
 ( $ * )     C  
Sublicensed Software
 ( $ * )     D  
Subscriptions
 ( $ * )     E  
 
              
Residual amount:
                
Software and installation services
   $ *       F  
 
              
 
*   Confidential information has been omitted and filed separately with the Commission.
The table found in Appendix E provides the following information for each element of the arrangement: description, payment terms, timing of delivery, basis for determining VSOE, and the manner in which revenue is recognized. The letter beside each element corresponds to the applicable letter in Appendix E.
  b.   You state throughout your responses that you determined that the software-related services, apart from installation services, were not essential to the functionality of the software. We would point out that the language in SOP 97-2 refers to service elements not being essential to the functionality of any other element.
Company Response:
The Company agrees. The Company’s response was intended to be in relation to all other elements, not just software.
  c.   For each service element, provide us with a detailed analysis pursuant to the criteria in paragraph 65 and 68-71 supporting your conclusion regarding whether the element qualifies for separate accounting.

 

 

Kathleen Collins
Accounting Branch Chief
Securities and Exchange Commission
September 11, 2006
Page 8
Company Response:
The Company has three key service elements within the scope of SOP 97-2 for which the evaluation under paragraphs 65 and 68-71 is necessary: 1) installation services, 2) implementation services and 3) hosting services.
As has been discussed previously, the Company has concluded that installation services are essential to the functionality of the software and, thus, these services do not qualify for separate accounting pursuant to paragraph 65 of SOP 97-2 primarily due to the fact that our installation services can only be performed by us, client personnel do not play an active role in the installation of the software and installation services are not sold separate from the software. Accordingly, the revenue attributable to installation services and software are combined and recognized over the installation period pursuant to SOP 81-1.
We believe that the implementation services and hosting services do qualify for separate accounting pursuant to paragraphs 65 and 68-71 of SOP 97-2. Following is the Company’s analysis supporting our conclusion that these services qualify for separate accounting.
Implementation Services
.65 In order to account separately for the service element of an arrangement that includes both software and services, sufficient vendor-specific objective evidence of fair value must exist to permit allocation of the revenue to the various elements of the arrangement (as discussed in paragraphs .10 and .12 ). Additionally, the services ( a ) must not be essential to the functionality of any other element of the transaction and ( b ) must be described in the contract such that the total price of the arrangement would be expected to vary as the result of the inclusion or exclusion of the services.
Company Response:
The Company has determined that sufficient vendor-specific objective evidence of fair value exists for implementation services as further detailed in our Response to #2.d and other elements of the arrangement to permit allocation of the revenue to the various elements of the arrangement. Implementation services are not deemed to be essential to the functionality of the licensed software (see further analysis below) or any other contract element. Implementation services are priced independent of any other contract element and are described in the contract such that the total price of the arrangement would vary if the applicable services were included or excluded from the contract.
.68 An important factor to consider in determining whether the services are essential to the functionality of any other element is whether the software included in the arrangement is considered core or off-the-shelf software . Core software is software that a vendor uses in creating other software. It is not sold as is because customers cannot use it unless it is

 

 

Kathleen Collins
Accounting Branch Chief
Securities and Exchange Commission
September 11, 2006
Page 9
customized to meet system objectives or customer specifications. Off-the-shelf software is software that is marketed as a stock item that can be used by customers with little or no customization.
Company Response:
The Company’s software is not considered to be core software. Upon contract signature the Company delivers standard release software to the applicable client. No significant modifications or additions to the software are typically necessary to meet the required client functionality. In the limited instances where material software modifications or customization is required, the Company accounts for those arrangements in accordance with contract accounting pursuant to SOP 81-1. Implementation services generally entail providing assistance to the client with the application set up, workflow design, database build and system testing, as well as change management services and technical environment services to assist the client in achieving optimal system performance. Following is a high level list of the standard implementation project responsibilities performed by Cerner:
  •   Assist with the development of the project charter
 
  •   Manage the human resource functions for the project team members
 
  •   Plan and track the project activities in a detailed project plan with client
 
  •   Support the Project Readiness Assessment (kick-off) meeting(s)
 
  •   Assist with the development of detailed design for how the client will utilize the application in their particular environment
 
  •   Assist with the system set up activities (database population, creation of user profiles, security settings)
 
  •   Perform quality control reviews (readiness assessments) for each major module
 
  •   Escalate any project issues in coordination with client
 
  •   Support client’s detailed task execution
 
  •   Perform interface and technical operational readiness assessment ensuring any applicable hardware and related operating systems have been properly installed and ready for the project to move into production
 
  •   Prior to conversion of the system, perform automated testing of the system set up and database build utilizing Cerner predefined scripts; client performs similar testing with their scripts
 
  •   Support conversion of the project to production
 
  •   Perform post-conversion audit
.69 Software should be considered off-the-shelf software if it can be added to an arrangement with insignificant changes in the underlying code and it could be used by the customer for the customer’s purposes upon installation. Actual use by the customer and performance of other elements of the arrangement is not required to demonstrate that the customer could use the software off-the-shelf. If significant modifications or additions to the off-the-shelf software

 

 

Kathleen Collins
Accounting Branch Chief
Securities and Exchange Commission
September 11, 2006
Page 10
are necessary to meet the customer’s purpose (for example, changing or making additions to the software, or because it would not be usable in its off-the-shelf form in the customer’s environment), the software should be considered core software for purposes of that arrangement. If the software that is included in the arrangement is not considered to be off-the-shelf software, or if significant modifications or additions to the off-the-shelf software are necessary to meet the customer’s functionality, no element of the arrangement would qualify for accounting as a service, and contract accounting should be applied to both the software and service elements of the arrangement.
Company Response:
As noted above, a change in the underlying code is not required for the software solutions contained in the Company’s arrangements. No significant modifications or additions to the software are necessary to meet the required client functionality and therefore supporting our conclusion that the software is “off-the-shelf” pursuant to the guidance of paragraph 69.
.70 Factors indicating that the service element is essential to the functionality of the other elements of the arrangement, and consequently should not be accounted for separately, include the following.
• The software is not off-the-shelf software.
Company Response:
As noted above, the Company has concluded that the software is not core software.
• The services include significant alterations to the features and functionality of the off-the-shelf software.
Company Response:
Implementation services do not include significant alterations to the features and functionality of the software.
• Building complex interfaces is necessary for the vendor’s software to be functional in the customer’s environment.
Company Response:
Implementation of the Company’s software requires the building of interfaces for the system to communicate within the client’s environment. Interface work is typically around 5% of the total implementation work effort. In a particular project approximately 90-95% of all interface work is standard with already developed code. The remaining 5-10% interface work may require some coding but does not involve significant risk. Therefore, we do not believe the implementation services entail building complex interfaces.

 

 

Kathleen Collins
Accounting Branch Chief
Securities and Exchange Commission
September 11, 2006
Page 11
• The timing of payments for the software is coincident with performance of the services.
Company Response:
The Company’s standard licensed software payment terms are date-based in nature and are not coincident with the performance of services. Approximately 90% of all licensed software payment terms are date-based. Approximately 85% of contracts have 100% date-based licensed software payment terms. For the arrangements whereby some portion of the payments for the software is tied to performance of the services, we evaluate the implementation services in those arrangements to determine if there are unique characteristics of the services that may indicate that the services in those implementation projects may be essential to the functionality of the software or some other element of the arrangement or contain unique client acceptance criteria. We have not found that to be the case. Furthermore, in those instances where a portion of the software fee is tied to performance of the services, the portion of the software license fee tied to performance of the services is deferred until the related implementation milestone is achieved and related fees become billable and non-forfeitable pursuant to paragraph 14 of SOP 97-2.
• Milestones or customer-specific acceptance criteria affect the realizability of the software-license fee.
Company Response:
The Company’s standard agreement does not provide client specific acceptance criteria. Any acceptance provisions or software warranties are tied to the software performing in accordance with the standard product descriptions. As noted above, approximately 90% of all software payment terms are date-based in nature. Furthermore, we have a strong history of achieving implementation milestones such that ultimate realizability of the software is not in question. However, as noted above, we do defer the software revenue that is tied to achievement of implementation milestones pursuant to paragraph 14 of SOP 97-2 until such time as the milestone is achieved and the remaining payments become billable and non-forfeitable.
.71 Judgment is required in determining whether the obligation to provide services in addition to the delivery of software should be accounted for separately as a service element. Services that qualify for accounting as a service element of a software arrangement always are stated separately and have one or more of the following characteristics.
• The services are available from other vendors.
Company Response:
Implementation services are available from several third party providers. Firms such as First Consulting, ACS and IBM Healthlink have Cerner practices. According to the KLAS

 

 

Kathleen Collins
Accounting Branch Chief
Securities and Exchange Commission
September 11, 2006
Page 12
(independent healthcare IT research group) report published in July 2006, Cerner software represented 17% of First Consulting and ASC’s software implementation projects and 34% for IBM Healthlink. Several other independent consultants provide Cerner implementation services as well.
• The services do not carry a significant degree of risk or unique acceptance criteria.
Company Response:
Cerner implementation services do not carry a significant degree of risk or unique acceptance criteria. As noted above, Cerner has a strong history of successfully achieving implementation milestones and completing projects.
• The software vendor is an experienced provider of the services.
Company Response:
Cerner is an experienced provider of services for Cerner software implementation services.
• The vendor is providing primarily implementation services, such as implementation planning, loading of software, training of customer personnel, data conversion, building simple interfaces, running test data, and assisting in the development and documentation of procedures.
Company Response:
We believe the implementation services are of the nature described in this bullet. Please see description of implementation services provided under #68 above.
• Customer personnel are dedicated to participate in the services being performed.
Company Response:
The Client’s personnel are always dedicated to participate in and are critical to the implementation services being performed. The Company has provided implementation approaches which are primarily driven by the client with typically three client hours for every Cerner hour and other projects that leverage Cerner for a higher percentage of the build activities which typically results in one client hour for every two Cerner hours. This varies from project to project.
Overall Conclusion for Implementation Services
After considering all of the guidance in paragraphs 65 and 68-71, the Company has concluded that our implementation services qualify for separate accounting. While a small percentage of our arrangements have a portion of the software payments that are tied to performance of the services, we have analyzed those arrangements and concluded that there

 

 

Kathleen Collins
Accounting Branch Chief
Securities and Exchange Commission
September 11, 2006
Page 13
are no unique characteristics or acceptance criteria that would suggest that the services are essential to functionality of any other element in those arrangements. While this factor may be a negative indicator in the overall analysis, we believe the preponderance of other positive factors outweigh this negative factor.
Hosting Services
.65 In order to account separately for the service element of an arrangement that includes both software and services, sufficient vendor-specific objective evidence of fair value must exist to permit allocation of the revenue to the various elements of the arrangement (as discussed in paragraphs .10 and .12 ). Additionally, the services (a) must not be essential to the functionality of any other element of the transaction and (b) must be described in the contract such that the total price of the arrangement would be expected to vary as the result of the inclusion or exclusion of the services.
Company Response:
The Company has determined that sufficient vendor-specific objective evidence of fair value exists for hosting services as discussed in our letter response dated July 12, 2006 and further discussed in #3 and other elements of the arrangement to permit allocation of the revenue to the various elements of the arrangement. Hosting services are not deemed to be essential to the functionality of the licensed software (see further analysis below) or any other contract element. Hosting services are priced independent of any other contract element and are described in the contract such that the total price of the arrangement would vary if the applicable services were included or excluded from the contract.
.68 An important factor to consider in determining whether the services are essential to the functionality of any other element is whether the software included in the arrangement is considered core or off-the-shelf software . Core software is software that a vendor uses in creating other software. It is not sold as is because customers cannot use it unless it is customized to meet system objectives or customer specifications. Off-the-shelf software is software that is marketed as a stock item that can be used by customers with little or no customization.
Company Response:
As discussed above under implementation services, the Company’s software is not considered core software.
.69 Software should be considered off-the-shelf software if it can be added to an arrangement with insignificant changes in the underlying code and it could be used by the customer for the customer’s purposes upon installation. Actual use by the customer and performance of other elements of the arrangement is not required to demonstrate that the customer could use the software off-the-shelf. If significant modifications or additions to the off-the-shelf software

 

 

Kathleen Collins
Accounting Branch Chief
Securities and Exchange Commission
September 11, 2006
Page 14
are necessary to meet the customer’s purpose (for example, changing or making additions to the software, or because it would not be usable in its off-the-shelf form in the customer’s environment), the software should be considered core software for purposes of that arrangement. If the software that is included in the arrangement is not considered to be off-the-shelf software, or if significant modifications or additions to the off-the-shelf software are necessary to meet the customer’s functionality, no element of the arrangement would qualify for accounting as a service, and contract accounting should be applied to both the software and service elements of the arrangement.
Company Response:
As discussed above under implementation services, the Company’s software is not considered core software.
.70 Factors indicating that the service element is essential to the functionality of the other elements of the arrangement, and consequently should not be accounted for separately, include the following.
• The software is not off-the-shelf software.
Company Response:
As noted above, the Company has concluded that the software is not core software.
• The services include significant alterations to the features and functionality of the off-the-shelf software.
Company Response:
Hosting services do not entail significant alterations to the features and functionality of the software.
• Building complex interfaces is necessary for the vendor’s software to be functional in the customer’s environment.
Company Response:
Hosting services do not require the building of complex interfaces.
• The timing of payments for the software is coincident with performance of the services.
Company Response:
The timing of payments for the software is not coincident with performance of the hosting services.

 

 

Kathleen Collins
Accounting Branch Chief
Securities and Exchange Commission
September 11, 2006
Page 15
• Milestones or customer-specific acceptance criteria affect the realizability of the software-license fee.
Company Response:
There are no milestones or client-specific acceptance criteria associated with hosting services.
.71 Judgment is required in determining whether the obligation to provide services in addition to the delivery of software should be accounted for separately as a service element. Services that qualify for accounting as a service element of a software arrangement always are stated separately and have one or more of the following characteristics.
• The services are available from other vendors.
Company Response:
Hosting services are available from other vendors and many of the Company’s clients host their Cerner software in-house.
• The services do not carry a significant degree of risk or unique acceptance criteria.
Company Response:
Cerner hosting services do not carry a significant degree of risk or unique acceptance criteria.
• The software vendor is an experienced provider of the services.
Company Response:
Cerner is an experienced provider of hosting services for Cerner software.
• The vendor is providing primarily implementation services, such as implementation planning, loading of software, training of customer personnel, data conversion, building simple interfaces, running test data, and assisting in the development and documentation of procedures.
Company Response: N/A
• Customer personnel are dedicated to participate in the services being performed.
Company Response: N/A
Overall Conclusion for Hosting Services
After considering all of the guidance in paragraphs 65 and 68-71, the Company has concluded that our hosting services qualify for separate accounting.

 

 

Kathleen Collins
Accounting Branch Chief
Securities and Exchange Commission
September 11, 2006
Page 16
  d.   We note your statements that you have established VSOE for each of the service elements for which you are separately accounting. Describe the process you use to evaluate the various factors that affect VSOE (e.g. purchase volume, competitive pricing, duration of the arrangement, region, distribution channel and specific requirements of the order). Does the price charged for the individual elements vary from customer to customer? If so, please explain how the Company determined that they can reasonably estimate fair value of each undelivered element. Tell us how you considered the guidance in paragraphs 10 and 57 of SOP 97-2.
Company Response:
Below is a description of how we determine VSOE for undelivered service elements that may be contained in our bundled arrangements.
Implementation Services
We have determined the VSOE for hourly professional service rates as further discussed below. For fixed fee implementations we apply VSOE of the hourly rates to the number of hours estimated to complete the project to determine VSOE for the fixed fee implementation services. We have an established implementation methodology and a strong history of providing these services, which we believe allows us to make reasonably dependable estimates of the hours to complete the implementation project.
There are a number of factors that affect the pricing of our implementation services such as location, role/expertise of professional and type of service offering (considering specialty, cost structure and market pricing influences). The Company often sells professional services on a stand-alone basis. We compile information about the amount charged in recent stand-alone transactions (i.e., within the most recent rolling twelve month period) when the service element is sold separately pursuant to paragraph 10 of SOP 97-2. This compilation is stratified by country, role of professional and service offering. For each stratum, the Company analyzes the information to determine whether the prices fall within a reasonable range of prices that represent VSOE of fair value. We believe that a range of prices of the separate sales within a stratum for which the lowest and highest price within the range are not more than 15% from the median price in the range, and that range includes an amount approaching 80% of the sales transactions for that stratum, is a reasonable range of prices to represent that VSOE of fair value for that role exists for transactions within that stratum.
Because of the varying nature of services provided, our prices charged to clients will vary from client to client. However, these varying prices generally fall within the reasonable range of prices that constitute our VSOE, as described above. To the extent that the stated contractual rate is not within the range of prices establishing VSOE, the Company allocates

 

 

Kathleen Collins
Accounting Branch Chief
Securities and Exchange Commission
September 11, 2006
Page 17
revenue to the service element using the hourly service rates outer limit of the range nearest to the stated price.
PCS and Hardware Maintenance
For PCS, we follow the guidance in paragraph 57 utilizing the stated renewal rates within our contracts to establish VSOE of fair value for the PCS, provided the renewal rates are substantive. Our stated annual renewal rates generally range from 18% to 24% of the stated perpetual license fees, which we deem to be substantive.
As noted previously, we also determine the VSOE of hardware maintenance contracts based on the substantive renewal rates stated in the contracts which are consistent with fees charged by third parties providing similar maintenance services.
Hosting
As discussed in our previous comment response and in Response #3 below, we determine the VSOE of hosting services based on the renewal rates in the contracts, which we have determined are substantive.
  e.   You indicate in your response that you separate the computer hardware from SOP 97-2 deliverables. Describe how you account for hardware maintenance referred to in your revenue recognition policy.
Company Response:
Many Cerner clients elect to host the licensed software within their data center on equipment purchased by the client. Alternatively, Cerner can provide remote hosting services for the licensed software. Clients electing to host their own solutions can purchase the required hardware from Cerner or a third party. If the client elects to purchase hardware maintenance from Cerner, the hardware maintenance fees are priced as a separate element within the bundled arrangement. The majority of our hardware maintenance agreements are one year in length with annual renewal options thereafter. The renewal rate upon conclusion of the initial term, which is the rate we believe establishes VSOE for the maintenance services, is consistent with the rate charged in the initial term of the agreement subject to inflationary changes. The renewal rate for such maintenance services are used as the basis for VSOE. The revenue related to hardware maintenance is recognized on a straight-line basis over the term of the maintenance agreement.
  3.   We note your response to our Prior Comment No. 7 where you describe the qualitative factors considered in determining that you had established VSOE for the managed services elements. Explain the following:

 

 

Kathleen Collins
Accounting Branch Chief
Securities and Exchange Commission
September 11, 2006
Page 18
  a.   the managed services fee in your original contract and renewal rates in percentage and dollar terms of the perpetual license and why these amounts are considered substantive;
Company Response:
The following recent transactions are representative of our bundled hosting arrangements:
                             
                Annual Renewal   Annual Renewal    
Bundled   Managed   Perpetual   Annual Managed   Rate Variable   Rate as a % of    
Hosting   Services   License   Services Annual   Element Per CPU   Perpetual License    
Term   Contract Value   Contract Value   Renewal Rate ($)   (See A below)   (See B below)   Comments
84 Months
  $*   $*   $*^   $*     38 %   Agreement is representative of a hosting arrangement for an initial licensing of Cerner software
 
                            
60 Months
  $*   $*
$*
 
$*
 
   $*^   $*     139 %   Agreement is representative of a hosting arrangement that includes previously licensed and incremental Cerner software. $* represents the license fees contained in the bundled arrangement. $* represents license fees from prior agreements which will be hosted under this particular hosting arrangement.
 
^   Excludes contractual inflation adjustment factor
 
*   Confidential information has been omitted and filed separately with the Commission.
 
    As noted in Response #7 to our letter dated July 12, 2006, the evaluation of whether the renewal rate in our hosting arrangements is substantive, we consider the following factors:
 
•   The renewal rates offered in arrangements with similar clients, size and products are consistent from arrangement to arrangement.

 

 

Kathleen Collins
Accounting Branch Chief
Securities and Exchange Commission
September 11, 2006
Page 19
  A.   As noted in the above table, the pricing is relatively consistent on a revenue per variable CPU basis. Our initial bundled hosting fees and renewal amounts are typically derived based on two primary components. Part of the fee is designed to cover the fixed cost of the hardware we have to purchase to provide the managed services over the initial term of the arrangement. Therefore, the shorter the initial term, the higher the annual fee will be for this component of the fee on a relative basis. Another part is based on the projected CPU usage and designed to cover the variable costs that go along with CPU usage. One would expect this component of the fee to be relatively constant from arrangement to arrangement on a per CPU basis as is evident in the two deals reflected in the above chart.
 
  B.   As noted in A, the hosting fee as a percentage of license fee will vary based on the length of the initial term of the arrangement due to there being a shorter period for recovery of the fixed-based component of the fee. The fee will also vary based on the particular software solutions being hosted and other metrics. As demonstrated in the table above, however, the annual percentage is substantial when compared to the stated software license fee supporting our position that the renewal rates are substantive.
  •   We have long-term hosting arrangements that have reached the end of their initial term and the clients are continuing to renew their hosting arrangements beyond their initial terms at the renewal rates.
 
  •   We have been in business and our clients have been using our solutions for over 25 years and we plan to continue supporting and enhancing the solutions well beyond the term of the hosting arrangements.
We believe that when all these factors are considered in the aggregate, the renewal rates in our hosting arrangements are substantive and appropriately establish VSOE for the hosting service.
  b.   whether managed services include both PCS and hosting and if so, whether the period of those arrangements are the same (e.g. both five years);
Company Response:
Managed service agreements also may include a PCS arrangement. When managed services are included in a bundled arrangement with software the PCS is a separate element and is priced consistent with how PCS is priced for agreements that do not include managed services. The majority of our managed service agreements are five to seven years in length with annual renewal options thereafter. Standard software arrangements, client hosted or Cerner hosted, typically require one year PCS with annual renewal options thereafter. Thus, the period of the hosting arrangement and the PCS are not the same.

 

 

Kathleen Collins
Accounting Branch Chief
Securities and Exchange Commission
September 11, 2006
Page 20
  c.   the standard term for post-contract customer support when hosting is not provided and the rate for PCS included in the original arrangement and the renewal rate; and
Company Response:
As noted above, the standard term and price for post-contract client support is the same regardless of whether the software is hosted by the client or Cerner. The renewal rate upon conclusion of the PCS initial term, which is the rate we believe establishes VSOE for the support services, is consistent with the rate charged in the initial term of the agreement subject to inflationary changes.
  d.   whether you provide for any specified upgrades and enhancements in your managed services for PCS arrangements and if so how you account for those products.
      Company Response:
 
      The Company’s managed service agreements do not include specified software upgrades or enhancements for PCS. PCS services include unspecified upgrades and enhancements only.
 
  4.   We note your response to prior comment no. 8 where you indicate that if an arrangement does not call for the client to pay interest at the prevailing interest rates you record the resulting receivable at its present value pursuant to APB 21. Explain to us how you determine the prevailing interest rate in the arrangement or the rate imputed pursuant to APB 21. Tell us the range of interest rates relating to long-term arrangements for each year presented.
Company Response:
As noted in Response #9 to our previous response letter dated July 12, 2006, we on occasion enter into extended payment term arrangements with our clients. Extended payment terms granted are typically limited to the software element of the bundled arrangement and represents less than 20% of the total contract value. Such extended payment term receivables are generally sold on a non-recourse basis to third party financing institutions. The prevailing interest rate for these arrangements, validated with our third party financing institutions, is determined on a client by client, transaction by transaction basis based on the client’s particular credit rating, length of term and transaction size.
Range of interest rates relating to long-term arrangements for each year presented:
     
2004
  4.84% — 8.12%
 
    
2005
  5.88% — 7.11%

 

 

Kathleen Collins
Accounting Branch Chief
Securities and Exchange Commission
September 11, 2006
Page 21
  5.   We note your response to prior comment no. 11 and supplemental information in Appendix II. It is not evident from your response or supplemental information why the misstatement relating to the tax benefit is not quantitatively material to your annual or interim financial statements. Further in Appendix II you refer to Schedule I, which was not provided with your response, relating to other misstatements that have been identified in 2004 and 2005 that were not recorded because they were immaterial individually and in the aggregate. It appears that you considered these other misstatements in determining that the unrecorded tax benefit was not quantitatively material. Considering this provide us the following to assist us in further evaluating your response.
  a.   Schedule I, referred to in Appendix II;
Company Response:
Appendix F contains Schedule I, which details out the various unadjusted audit/interim review differences proposed by KPMG, but not recorded by the Company.
  b.   the impact of the unrecorded tax benefit on income tax expense, net income, basic and diluted earnings per share for each annual and quarterly period misstated;
Company Response:
Appendix G contains a schedule showing the impact of the unrecorded tax benefit related to Zynx for each quarterly and annual period.
  c.   the impact of the unrecorded misstatements in Schedule I on each line item impacted in your annual and quarterly financial statements;
Company Response:
Appendix H contains a schedule showing the cumulative impact if all proposed audit adjustments from Schedule I had been recorded.
  d.   a clear explanation of why amounts are not quantitatively material; and
Company Response:
In determining that the tax adjustment was immaterial, the Company looked to SAB 99, FASB Statement of Concepts No. 2, and AU 312 of the AICPA Professional Auditing Standards. Concepts Statement No. 2 defines materiality as, “the magnitude of an omission or misstatement of accounting information that, in the light of surrounding circumstances, makes it probable that the judgment of a reasonable person relying on the information would

 

 

Kathleen Collins
Accounting Branch Chief
Securities and Exchange Commission
September 11, 2006
Page 22
have been changed or influenced by the omission or misstatement.” SAB 99 also contains the same notion with respect to materiality.
We are not aware of any “bright line” test, nor have we established one internally, to determine if a misstatement is quantitatively material. Therefore we believe that the quantitative analysis is somewhat subjective by nature. Due to the nature of the misstatement (income tax related to a large one time gain), we could not conclude that the misstatement was quantitatively material. At the time the misstatement was discovered in 2005, we had the benefit of hindsight to see how the analysts and investors reacted to the gain itself when it was recorded. From that perspective, we could not conclude that in light of the surrounding circumstances that it was probable that the judgment of a reasonable person relying on the information would have been changed or influenced by the omission or misstatement related to the tax impact of the gain solely based on the quantitative size of the misstatement. That led us to our SAB 99 analysis to further consider the qualitative aspects of the misstatement.
In our SAB 99 analysis submitted in our previous response, we indicated that we did not believe that the impacts of the misstatement masked any trends in our earnings. Following is an analysis of diluted EPS for the past 5 years showing diluted EPS as reported and diluted EPS as adjusted if the misstatement and other unadjusted differences for 2004 and 2005 had been reported in the proper period. With or without the adjustments, we achieved significant growth in EPS over the past three years, which supports our belief that we do not think the impacts of the misstatement masked any trends in our earnings. This was a key factor considered in our conclusion that the misstatement was not material.
                                         
Diluted EPS   2001   2002   2003   2004   2005
As Reported
     (.61 )     .65       .59       .86       1.10  
As Adjusted
     (.61 )     .65       .59       .95       1.04  
The conclusion management reached, in consultation with our Board of Directors and our outside auditors, including consultation with KPMG’s National Office, after considering all quantitative and qualitative factors was that a reasonable person would not have been influenced by the error when it occurred or by correction in the period reported.
As previously discussed, this conclusion was further supported after the fact by the lack of investor reaction once the correction of the error was reported. Cerner highlighted the correction of the error in its press release as well as the Form 10-Q filing for the third quarter of 2005. The Wall Street analyst’s reports and other news articles appeared to treat the correction of the error as irrelevant, by excluding it as a one-time item.
  e.   your basis for not correcting misstatements, if any, that you consider quantitatively material.
Company Response:
The Company would correct any misstatements considered quantitatively or qualitatively material to a reader of the financial statements.
We remind you that SAB 99 does not provide for consideration for qualitative factors in determining whether misstatements are material if amounts are quantitatively material. We may have further comments based on your response.
  6.   We have reviewed your response to our prior comment no. 13 concerning the non-GAAP Consolidated Statement of Earnings columnar format. We continue to have the concerns previously expressed over how investors might view that information due to the format in which it’s been presented. Consequently, we believe it should be removed.

 

 

Kathleen Collins
Accounting Branch Chief
Securities and Exchange Commission
September 11, 2006
Page 23
In response to your comment, Cerner has determined that it will no longer include Non-GAAP Consolidated Statements of Earnings, in the columnar format previously used, in our earnings release disclosures of results of operations. However, we believe non-GAAP net income (net income excluding share-based compensation expense and other nonrecurring items, such as write-off of acquired in process research and development) provides investors with meaningful information. Accordingly, we propose replacing the columnar Non-GAAP Consolidated Statements of Earnings in our future earnings releases with the following disclosure. For purposes of illustration, we have used the financial data included in our Form 8-K filed on July 20, 2006 for the period ended July 1, 2006.
CERNER CORPORATION
PRO FORMA NET INCOME AND PRO FORMA NET INCOME PER SHARE (1)
                                 
    Three             Three        
    Months             Months        
    Ended     YTD     Ended     YTD  
    July 1,     July 1,     July 2,     July 2,  
(In thousands, except per share data)   2006     2006     2005     2005  
Net income
   $ 23,873     $ 44,017     $ 19,803     $ 32,323  
 
                                
Share-based compensation expense
     (5,084 )     (9,799 )     —       —  
Income tax benefit
     1,945       3,745       —       —  
 
                                
Write-off of acquired in process research and development
     —       —       —       (6,382 )
Income Tax Benefit
     —       —       —       2,441  
 
                        
 
                                
Pro forma net income (1)
   $ 27,012     $ 50,071     $ 19,803     $ 36,326  
 
                        
 
                                
Pro forma basic earnings per share
   $ 0.35     $ 0.65     $ 0.27     $ 0.49  
 
                        
Basic weighted average shares outstanding
     77,524       77,340       74,314       73,898  
 
                                
Pro forma diluted earnings per share
   $ 0.33     $ 0.62     $ 0.25     $ 0.47  
 
                        
Diluted weighted average shares outstanding
     81,413       81,411       77,972       77,346  
 
(1)   Pro forma net income excludes share based compensation expense and the write-off of acquired in process research and development, in each case after income tax benefit. The exclusion of write-off of acquired in process research and development provides meaningful information regarding Cerner’s operating results on a basis comparable with prior periods and future periods when Cerner does not expect to have such a write off, whereas the exclusion of share-based compensation expense provides meaningful information to investors regarding Cerner’s operating results on a basis comparable with those of prior periods before Cerner’s adoption of FAS 123(R).
                 
*
  *   *   *   *
     If you have any questions concerning this letter or if you would like any additional information, please do not hesitate to call me at (816) 201-1989.
       
 
  Sincerely,
 
    
 
  /s/ Marc G. Naughton
 
   
 
  Marc G. Naughton, Senior Vice President
 
  and Chief Financial Officer

 

 

Appendix A
Capitalized Software Development Costs
2003 to 2005
(In thousands)
             
    2003 Software   2004 Software   2005 Software
    Development   Development   Development
Product   Costs Capitalized   Costs Capitalized   Costs Capitalized
PathNet
  *   *   *
PharmNet
  *   *   *
RadNet
  *   *   *
FirstNet
  *   *   *
CareNet
  *   *   *
SurgiNet
  *   *   *
ProFile
  *   *   *
ProFit
  *   *   *
CVNet
  *   *   *
Powerchart Office
  *   *   *
OMF
  *   *   *
ProCall
  *   *   *
Data & Content
  *   *   *
Access Management
  *   *   *
Resource Management
  *   *   *
IQHealth
  *   *   *
Core Architecture
  *   *   *
HNA Objects
  *   *   *
Other Products not defined
  *   *   *
     
Cerner Separate Totals
  *   *   *
INTL
  *   *   *
BNT
  *   *   *
Multum
  *   *   *
Other (DHT/Citation/CPHY)
  *   *   *
     
Cerner Consolidated Totals
  *   *   *
     
 
            
Release Dates from 2003 to 2005:
  2/03 10/03   3/04 8/04 10/04 12/04   2/05 5/05
 
*   Confidential information has been omitted and filed separately with the Commission.

 

 

Appendix B
2005 Capitalized Software Costs By Projects
             
Project #   Product Category   Version   Total
135774
   Access Management   Millennium   *
138592
   Access Management   Millennium   *
138596
   Access Management   Millennium   *
140854
   Access Management   Millennium   *
140855
   Access Management   Millennium   *
140856
   Access Management   Millennium   *
140857
   Access Management   Millennium   *
160182
   Access Management   Millennium   *
 
   Access Management Total       *
100924
   CareNet   Millennium   *
114367
   CareNet   Millennium   *
138646
   CareNet   Millennium   *
138647
   CareNet   Millennium   *
138648
   CareNet   Millennium   *
140688
   CareNet   Millennium   *
140859
   CareNet   Millennium   *
141216
   CareNet   Millennium   *
141612
   CareNet   Millennium   *
151525
   CareNet   Millennium   *
164925
   CareNet   Millennium   *
10006858
   CareNet   Millennium   *
10009448
   CareNet   Millennium   *
10009449
   CareNet   Millennium   *
 
   CareNet Total       *
101826
   Core Architecture   Millennium   *
103135
   Core Architecture   Millennium   *
103487
   Core Architecture   Millennium   *
105815
   Core Architecture   Millennium   *
105818
   Core Architecture   Millennium   *
105822
   Core Architecture   Millennium   *
105823
   Core Architecture   Millennium   *
108904
   Core Architecture   Millennium   *
108909
   Core Architecture   Millennium   *
120891
   Core Architecture   Millennium   *
120892
   Core Architecture   Millennium   *
126993
   Core Architecture   Millennium   *
130409
   Core Architecture   Millennium   *
131498
   Core Architecture   Millennium   *
132943
   Core Architecture   Millennium   *
134909
   Core Architecture   Millennium   *
135577
   Core Architecture   Millennium   *
135579
   Core Architecture   Millennium   *
135582
   Core Architecture   Millennium   *
135584
   Core Architecture   Millennium   *
135720
   Core Architecture   Millennium   *
138355
   Core Architecture   Millennium   *
138594
   Core Architecture   Millennium   *
138595
   Core Architecture   Millennium   *
139032
   Core Architecture   Millennium   *
139115
   Core Architecture   Millennium   *
139652
   Core Architecture   Millennium   *
140852
   Core Architecture   Millennium   *
140853
   Core Architecture   Millennium   *
140863
   Core Architecture   Millennium   *
 
*   Confidential information has been omitted and filed separately with the Commission.

 

 

Appendix B
2005 Capitalized Software Costs By Projects
             
Project #   Product Category   Version   Total
140865
   Core Architecture   Millennium   *
141265
   Core Architecture   Millennium   *
141448
   Core Architecture   Millennium   *
142048
   Core Architecture   Millennium   *
143581
   Core Architecture   Millennium   *
147087
   Core Architecture   Millennium   *
149298
   Core Architecture   Millennium   *
151239
   Core Architecture   Millennium   *
153008
   Core Architecture   Millennium   *
153015
   Core Architecture   Millennium   *
154312
   Core Architecture   Millennium   *
155984
   Core Architecture   Millennium   *
156725
   Core Architecture   Millennium   *
156757
   Core Architecture   Millennium   *
158219
   Core Architecture   Millennium   *
158987
   Core Architecture   Millennium   *
158988
   Core Architecture   Millennium   *
160629
   Core Architecture   Millennium   *
160855
   Core Architecture   Millennium   *
160856
   Core Architecture   Millennium   *
160861
   Core Architecture   Millennium   *
162312
   Core Architecture   Millennium   *
165966
   Core Architecture   Millennium   *
165973
   Core Architecture   Millennium   *
166511
   Core Architecture   Millennium   *
166512
   Core Architecture   Millennium   *
166544
   Core Architecture   Millennium   *
168088
   Core Architecture   Millennium   *
168418
   Core Architecture   Millennium   *
168494
   Core Architecture   Millennium   *
168800
   Core Architecture   Millennium   *
169281
   Core Architecture   Millennium   *
169365
   Core Architecture   Millennium   *
169366
   Core Architecture   Millennium   *
169367
   Core Architecture   Millennium   *
169368
   Core Architecture   Millennium   *
169825
   Core Architecture   Millennium   *
169826
   Core Architecture   Millennium   *
169923
   Core Architecture   Millennium   *
169924
   Core Architecture   Millennium   *
170339
   Core Architecture   Millennium   *
170474
   Core Architecture   Millennium   *
170536
   Core Architecture   Millennium   *
170542
   Core Architecture   Millennium   *
10003437
   Core Architecture   Millennium   *
10003675
   Core Architecture   Millennium   *
10004330
   Core Architecture   Millennium   *
10004335
   Core Architecture   Millennium   *
10004414
   Core Architecture   Millennium   *
10004421
   Core Architecture   Millennium   *
10004423
   Core Architecture   Millennium   *
10004426
   Core Architecture   Millennium   *
10004431
   Core Architecture   Millennium   *
10004434
   Core Architecture   Millennium   *
 
*   Confidential information has been omitted and filed separately with the Commission.

 

 

Appendix B
2005 Capitalized Software Costs By Projects
             
Project #   Product Category   Version   Total
10004438
   Core Architecture   Millennium   *
10004439
   Core Architecture   Millennium   *
10004440
   Core Architecture   Millennium   *
10004441
   Core Architecture   Millennium   *
10004442
   Core Architecture   Millennium   *
10004445
   Core Architecture   Millennium   *
10004446
   Core Architecture   Millennium   *
10004450
   Core Architecture   Millennium   *
10004454
   Core Architecture   Millennium   *
10004458
   Core Architecture   Millennium   *
10004460
   Core Architecture   Millennium   *
10004464
   Core Architecture   Millennium   *
10004466
   Core Architecture   Millennium   *
10004468
   Core Architecture   Millennium   *
10004475
   Core Architecture   Millennium   *
10004477
   Core Architecture   Millennium   *
10004487
   Core Architecture   Millennium   *
10004511
   Core Architecture   Millennium   *
10005845
   Core Architecture   Millennium   *
10005846
   Core Architecture   Millennium   *
10005847
   Core Architecture   Millennium   *
10005848
   Core Architecture   Millennium   *
10005849
   Core Architecture   Millennium   *
10005850
   Core Architecture   Millennium   *
10005851
   Core Architecture   Millennium   *
10005854
   Core Architecture   Millennium   *
10005855
   Core Architecture   Millennium   *
10005856
   Core Architecture   Millennium   *
10005857
   Core Architecture   Millennium   *
10005858
   Core Architecture   Millennium   *
10005859
   Core Architecture   Millennium   *
10005938
   Core Architecture   Millennium   *
10006316
   Core Architecture   Millennium   *
10007329
   Core Architecture   Millennium   *
10008427
   Core Architecture   Millennium   *
10008910
   Core Architecture   Millennium   *
10009039
   Core Architecture   Millennium   *
10009121
   Core Architecture   Millennium   *
10009122
   Core Architecture   Millennium   *
10009125
   Core Architecture   Millennium   *
10009230
   Core Architecture   Millennium   *
10009231
   Core Architecture   Millennium   *
10009360
   Core Architecture   Millennium   *
10009363
   Core Architecture   Millennium   *
10009367
   Core Architecture   Millennium   *
10009368
   Core Architecture   Millennium   *
10009406
   Core Architecture   Millennium   *
10009409
   Core Architecture   Millennium   *
10009416
   Core Architecture   Millennium   *
10009417
   Core Architecture   Millennium   *
10009452
   Core Architecture   Millennium   *
10009482
   Core Architecture   Millennium   *
10009518
   Core Architecture   Millennium   *
10009519
   Core Architecture   Millennium   *
 
*   Confidential information has been omitted and filed separately with the Commission.

 

 

Appendix B
2005 Capitalized Software Costs By Projects
             
Project #   Product Category   Version   Total
10009535
   Core Architecture   Millennium   *
10009537
   Core Architecture   Millennium   *
10009538
   Core Architecture   Millennium   *
10009554
   Core Architecture   Millennium   *
10009555
   Core Architecture   Millennium   *
10009558
   Core Architecture   Millennium   *
10009575
   Core Architecture   Millennium   *
10009576
   Core Architecture   Millennium   *
10009579
   Core Architecture   Millennium   *
10009581
   Core Architecture   Millennium   *
10009585
   Core Architecture   Millennium   *
10009586
   Core Architecture   Millennium   *
10009587
   Core Architecture   Millennium   *
10009588
   Core Architecture   Millennium   *
10009594
   Core Architecture   Millennium   *
10009595
   Core Architecture   Millennium   *
10009642
   Core Architecture   Millennium   *
10009643
   Core Architecture   Millennium   *
10009647
   Core Architecture   Millennium   *
10009650
   Core Architecture   Millennium   *
10009651
   Core Architecture   Millennium   *
10009696
   Core Architecture   Millennium   *
10009697
   Core Architecture   Millennium   *
10009735
   Core Architecture   Millennium   *
10009751
   Core Architecture   Millennium   *
10009754
   Core Architecture   Millennium   *
10009755
   Core Architecture   Millennium   *
10009768
   Core Architecture   Millennium   *
10009774
   Core Architecture   Millennium   *
10009775
   Core Architecture   Millennium   *
10009781
   Core Architecture   Millennium   *
10009909
   Core Architecture   Millennium   *
10009919
   Core Architecture   Millennium   *
10009938
   Core Architecture   Millennium   *
10009941
   Core Architecture   Millennium   *
10009942
   Core Architecture   Millennium   *
10009945
   Core Architecture   Millennium   *
10009949
   Core Architecture   Millennium   *
10009950
   Core Architecture   Millennium   *
10009953
   Core Architecture   Millennium   *
10009972
   Core Architecture   Millennium   *
10009983
   Core Architecture   Millennium   *
10009984
   Core Architecture   Millennium   *
10012409
   Core Architecture   Millennium   *
 
   Core Architecture Total       *
109537
   CVNet   Millennium   *
134339
   CVNet   Millennium   *
138739
   CVNet   Millennium   *
140585
   CVNet   Millennium   *
10009513
   CVNet   Millennium   *
10009514
   CVNet   Millennium   *
 
   CVNet Total       *
103247
   Data & Content   Millennium   *
112238
   Data & Content   Millennium   *
 
*   Confidential information has been omitted and filed separately with the Commission.

 

 

Appendix B
2005 Capitalized Software Costs By Projects
             
Project #   Product Category   Version   Total
133239
   Data & Content   Millennium   *
135587
   Data & Content   Millennium   *
138599
   Data & Content   Millennium   *
138601
   Data & Content   Millennium   *
138602
   Data & Content   Millennium   *
138604
   Data & Content   Millennium   *
140584
   Data & Content   Millennium   *
141547
   Data & Content   Millennium   *
141851
   Data & Content   Millennium   *
143287
   Data & Content   Millennium   *
145717
   Data & Content   Millennium   *
145720
   Data & Content   Millennium   *
145723
   Data & Content   Millennium   *
145726
   Data & Content   Millennium   *
146187
   Data & Content   Millennium   *
147088
   Data & Content   Millennium   *
153213
   Data & Content   Millennium   *
169149
   Data & Content   Millennium   *
10006730
   Data & Content   Millennium   *
 
   Data & Content Total       *
112605
   FirstNet   Millennium   *
138597
   FirstNet   Millennium   *
140680
   FirstNet   Millennium   *
140860
   FirstNet   Millennium   *
141728
   FirstNet   Millennium   *
10009509
   FirstNet   Millennium   *
10009510
   FirstNet   Millennium   *
 
   FirstNet Total       *
141223
   HNA Objects   Millennium   *
141409
   HNA Objects   Millennium   *
 
   HNA Objects Total       *
140861
   IQHealth   Millennium   *
143573
   IQHealth   Millennium   *
 
   IQHealth Total       *
135618
   OMF   Millennium   *
138627
   OMF   Millennium   *
140862
   OMF   Millennium   *
 
   OMF Total       *
100905
   Other Products   Millennium   *
135776
   Other Products   Millennium   *
138740
   Other Products   Millennium   *
154311
   Other Products   Millennium   *
155586
   Other Products   Millennium   *
10009605
   Other Products   Millennium   *
10009638
   Other Products   Millennium   *
10009639
   Other Products   Millennium   *
10009905
   Other Products   Millennium   *
10009906
   Other Products   Millennium   *
 
   Other Products Total       *
100072
   PathNet   Millennium   *
100709
   PathNet   Millennium   *
101493
   PathNet   Millennium   *
101556
   PathNet   Millennium   *
101581
   PathNet   Millennium   *
 
*   Confidential information has been omitted and filed separately with the Commission.

 

 

Appendix B
2005 Capitalized Software Costs By Projects
             
Project #   Product Category   Version   Total
101583
   PathNet   Millennium   *
101735
   PathNet   Millennium   *
101887
   PathNet   Millennium   *
103126
   PathNet   Millennium   *
109198
   PathNet   Millennium   *
116155
   PathNet   Millennium   *
126403
   PathNet   Millennium   *
135578
   PathNet   Millennium   *
135612
   PathNet   Millennium   *
135620
   PathNet   Millennium   *
135628
   PathNet   Millennium   *
135634
   PathNet   Millennium   *
135683
   PathNet   Millennium   *
135717
   PathNet   Millennium   *
135722
   PathNet   Millennium   *
138605
   PathNet   Millennium   *
138607
   PathNet   Millennium   *
138611
   PathNet   Millennium   *
138612
   PathNet   Millennium   *
138613
   PathNet   Millennium   *
138617
   PathNet   Millennium   *
138618
   PathNet   Millennium   *
138619
   PathNet   Millennium   *
138621
   PathNet   Millennium   *
140911
   PathNet   Millennium   *
140983
   PathNet   Millennium   *
141226
   PathNet   Millennium   *
141228
   PathNet   Millennium   *
157036
   PathNet   Millennium   *
158911
   PathNet   Millennium   *
159839
   PathNet   Millennium   *
166474
   PathNet   Millennium   *
168495
   PathNet   Millennium   *
10004327
   PathNet   Millennium   *
10004329
   PathNet   Millennium   *
10004331
   PathNet   Millennium   *
10004420
   PathNet   Millennium   *
10004422
   PathNet   Millennium   *
10009044
   PathNet   Millennium   *
10009052
   PathNet   Millennium   *
10009249
   PathNet   Millennium   *
10009250
   PathNet   Millennium   *
10009320
   PathNet   Millennium   *
10009444
   PathNet   Millennium   *
10009445
   PathNet   Millennium   *
 
   PathNet Total       *
102446
   PharmNet   Millennium   *
135586
   PharmNet   Millennium   *
135682
   PharmNet   Millennium   *
138198
   PharmNet   Millennium   *
138650
   PharmNet   Millennium   *
140685
   PharmNet   Millennium   *
140687
   PharmNet   Millennium   *
164019
   PharmNet   Millennium   *
 
*   Confidential information has been omitted and filed separately with the Commission.

 

 

Appendix B
2005 Capitalized Software Costs By Projects
             
Project #   Product Category   Version   Total
164058
   PharmNet   Millennium   *
164227
   PharmNet   Millennium   *
164228
   PharmNet   Millennium   *
166291
   PharmNet   Millennium   *
10004424
   PharmNet   Millennium   *
10004425
   PharmNet   Millennium   *
10005946
   PharmNet   Millennium   *
10005947
   PharmNet   Millennium   *
10007178
   PharmNet   Millennium   *
10007179
   PharmNet   Millennium   *
10007180
   PharmNet   Millennium   *
10009596
   PharmNet   Millennium   *
10009601
   PharmNet   Millennium   *
10009602
   PharmNet   Millennium   *
10009606
   PharmNet   Millennium   *
10009680
   PharmNet   Millennium   *
10009681
   PharmNet   Millennium   *
10009692
   PharmNet   Millennium   *
10009693
   PharmNet   Millennium   *
 
   PharmNet Total       *
138722
   Powerchart Office   Millennium   *
138723
   Powerchart Office   Millennium   *
138806
   Powerchart Office   Millennium   *
140631
   Powerchart Office   Millennium   *
140851
   Powerchart Office   Millennium   *
141431
   Powerchart Office   Millennium   *
141471
   Powerchart Office   Millennium   *
10004346
   Powerchart Office   Millennium   *
10011610
   Powerchart Office   Millennium   *
10011612
   Powerchart Office   Millennium   *
 
   Powerchart Office Total       *
140681
   ProCall   Millennium   *
 
   ProCall Total       *
138598
   ProFile   Millennium   *
140683
   ProFile   Millennium   *
140866
   ProFile   Millennium   *
151754
   ProFile   Millennium   *
151755
   ProFile   Millennium   *
10004332
   ProFile   Millennium   *
10009376
   ProFile   Millennium   *
10009377
   ProFile   Millennium   *
 
   ProFile Total       *
111476
   ProFit   Millennium   *
138643
   ProFit   Millennium   *
138644
   ProFit   Millennium   *
141224
   ProFit   Millennium   *
141225
   ProFit   Millennium   *
163940
   ProFit   Millennium   *
169824
   ProFit   Millennium   *
10009364
   ProFit   Millennium   *
 
   ProFit Total       *
133064
   RadNet   Millennium   *
135926
   RadNet   Millennium   *
138724
   RadNet   Millennium   *
 
*   Confidential information has been omitted and filed separately with the Commission.

 

 

Appendix B
2005 Capitalized Software Costs By Projects
             
Project #   Product Category   Version   Total
138725
   RadNet   Millennium   *
140483
   RadNet   Millennium   *
140484
   RadNet   Millennium   *
140679
   RadNet   Millennium   *
159153
   RadNet   Millennium   *
168496
   RadNet   Millennium   *
10004334
   RadNet   Millennium   *
10004490
   RadNet   Millennium   *
10009349
   RadNet   Millennium   *
10009350
   RadNet   Millennium   *
10009372
   RadNet   Millennium   *
10009373
   RadNet   Millennium   *
 
   RadNet Total       *
138623
   Resource Management   Millennium   *
141724
   Resource Management   Millennium   *
 
   Resource Management Total       *
103160
   SurgiNet   Millennium   *
135797
   SurgiNet   Millennium   *
138737
   SurgiNet   Millennium   *
140586
   SurgiNet   Millennium   *
170567
   SurgiNet   Millennium   *
10004333
   SurgiNet   Millennium   *
10009463
   SurgiNet   Millennium   *
10009464
   SurgiNet   Millennium   *
10009467
   SurgiNet   Millennium   *
10009468
   SurgiNet   Millennium   *
 
   SurgiNet Total       *
166054
   BNT   BNT   *
167315
   BNT   BNT   *
167317
   BNT   BNT   *
167320
   BNT   BNT   *
99999999E
   BNT   BNT   *
 
   BNT Total       *
139138
   INTL   Global   *
140858
   INTL   Global   *
159798
   INTL   Global   *
159799
   INTL   Global   *
159805
   INTL   Global   *
159806
   INTL   Global   *
159807
   INTL   Global   *
159808
   INTL   Global   *
159814
   INTL   Global   *
162041
   INTL   Global   *
162087
   INTL   Global   *
162104
   INTL   Global   *
162128
   INTL   Global   *
162130
   INTL   Global   *
162158
   INTL   Global   *
162159
   INTL   Global   *
162160
   INTL   Global   *
162161
   INTL   Global   *
162167
   INTL   Global   *
10005285
   INTL   Global   *
10005287
   INTL   Global   *
 
*   Confidential information has been omitted and filed separately with the Commission.

 

 

Appendix B
2005 Capitalized Software Costs By Projects
             
Project #   Product Category   Version   Total
10005290
   INTL   Global   *
10005645
   INTL   Global   *
10005646
   INTL   Global   *
10005657
   INTL   Global   *
10005679
   INTL   Global   *
10005702
   INTL   Global   *
10005703
   INTL   Global   *
10005704
   INTL   Global   *
10005706
   INTL   Global   *
10005724
   INTL   Global   *
10005725
   INTL   Global   *
10005726
   INTL   Global   *
10005728
   INTL   Global   *
10005753
   INTL   Global   *
10005764
   INTL   Global   *
10005765
   INTL   Global   *
10005800
   INTL   Global   *
10005806
   INTL   Global   *
99999999
   INTL   Global   *
99999999B
   INTL   Global   *
99999999F
   INTL   Global   *
 
   INTL Total       *
118319
   Multum   Multum   *
135583
   Multum   Multum   *
135892
   Multum   Multum   *
135894
   Multum   Multum   *
135895
   Multum   Multum   *
135896
   Multum   Multum   *
135897
   Multum   Multum   *
135898
   Multum   Multum   *
135899
   Multum   Multum   *
138129
   Multum   Multum   *
138130
   Multum   Multum   *
138131
   Multum   Multum   *
143083
   Multum   Multum   *
143084
   Multum   Multum   *
143085
   Multum   Multum   *
144168
   Multum   Multum   *
99999999G
   Multum   Multum   *
 
   Multum Total       *
136126
   Other   Citation   *
160630
   Other   Citation   *
163908
   Other   Citation   *
10002073
   Other   CPHY   *
10003393
   Other   CPHY   *
10003394
   Other   CPHY   *
10003395
   Other   CPHY   *
151089
   Other   DHT   *
151090
   Other   DHT   *
159880
   Other   DHT   *
10004324
   Other   DHT   *
99999999A
   Other   Other   *
99999999C
   Other   Other   *
 
   Other Total       *
 
   Grand Total       *
 
*   Confidential information has been omitted and filed separately with the Commission.

 

 

Appendix B
2005 Capitalized Software Costs By Projects
             
Project #   Product Category   Version   Total
10005290
   INTL   Global   *
10005645
   INTL   Global   *
10005646
   INTL   Global   *
10005657
   INTL   Global   *
10005679
   INTL   Global   *
10005702
   INTL   Global   *
10005703
   INTL   Global   *
10005704
   INTL   Global   *
10005706
   INTL   Global   *
10005724
   INTL   Global   *
10005725
   INTL   Global   *
10005726
   INTL   Global   *
10005728
   INTL   Global   *
10005753
   INTL   Global   *
10005764
   INTL   Global   *
10005765
   INTL   Global   *
10005800
   INTL   Global   *
10005806
   INTL   Global   *
99999999
   INTL   Global   *
99999999B
   INTL   Global   *
99999999F
   INTL   Global   *
 
   INTL Total       *
118319
   Multum   Multum   *
135583
   Multum   Multum   *
135892
   Multum   Multum   *
135894
   Multum   Multum   *
135895
   Multum   Multum   *
135896
   Multum   Multum   *
135897
   Multum   Multum   *
135898
   Multum   Multum   *
135899
   Multum   Multum   *
138129
   Multum   Multum   *
138130
   Multum   Multum   *
138131
   Multum   Multum   *
143083
   Multum   Multum   *
143084
   Multum   Multum   *
143085
   Multum   Multum   *
144168
   Multum   Multum   *
99999999G
   Multum   Multum   *
 
   Multum Total       *
136126
   Other   Citation   *
160630
   Other   Citation   *
163908
   Other   Citation   *
10002073
   Other   CPHY   *
10003393
   Other   CPHY   *
10003394
   Other   CPHY   *
10003395
   Other   CPHY   *
151089
   Other   DHT   *
151090
   Other   DHT   *
159880
   Other   DHT   *
10004324
   Other   DHT   *
99999999A
   Other   Other   *
99999999C
   Other   Other   *
 
   Other Total       *
 
     
 
*   Confidential information has been omitted and filed separately with the Commission.

 

 

Appendix B
2004 Capitalized Software Costs By Projects
             
Project #   Product Mapping   Version   Total
169367
   Core Architecture   Millennium   *
168418
   Core Architecture   Millennium   *
120891
   Core Architecture   Millennium   *
139032
   Core Architecture   Millennium   *
135582
   Core Architecture   Millennium   *
135579
   Core Architecture   Millennium   *
135577
   Core Architecture   Millennium   *
135720
   Core Architecture   Millennium   *
169826
   Core Architecture   Millennium   *
158219
   Core Architecture   Millennium   *
149298
   Core Architecture   Millennium   *
168088
   Core Architecture   Millennium   *
135584
   Core Architecture   Millennium   *
160586
   Core Architecture   Millennium   *
143581
   Core Architecture   Millennium   *
136593
   Core Architecture   Millennium   *
140853
   Core Architecture   Millennium   *
147087
   Core Architecture   Millennium   *
141448
   Core Architecture   Millennium   *
138595
   Core Architecture   Millennium   *
156757
   Core Architecture   Millennium   *
142048
   Core Architecture   Millennium   *
160861
   Core Architecture   Millennium   *
108904
   Core Architecture   Millennium   *
169923
   Core Architecture   Millennium   *
140865
   Core Architecture   Millennium   *
170339
   Core Architecture   Millennium   *
160629
   Core Architecture   Millennium   *
131498
   Core Architecture   Millennium   *
120892
   Core Architecture   Millennium   *
101826
   Core Architecture   Millennium   *
154312
   Core Architecture   Millennium   *
103487
   Core Architecture   Millennium   *
140852
   Core Architecture   Millennium   *
158988
   Core Architecture   Millennium   *
155984
   Core Architecture   Millennium   *
103135
   Core Architecture   Millennium   *
139115
   Core Architecture   Millennium   *
141265
   Core Architecture   Millennium   *
160856
   Core Architecture   Millennium   *
168494
   Core Architecture   Millennium   *
158987
   Core Architecture   Millennium   *
140863
   Core Architecture   Millennium   *
108909
   Core Architecture   Millennium   *
139652
   Core Architecture   Millennium   *
99999999F
   Core Architecture   Millennium   *
 
   Core Architecture Total       *
135798
   CVNet   Millennium   *
134339
   CVNet   Millennium   *
138739
   CVNet   Millennium   *
109537
   CVNet   Millennium   *
140585
   CVNet   Millennium   *
 
   CVNet Total       *
130801
   Data & Content   Millennium   *
 
*   Confidential information has been omitted and filed separately with the Commission.

 

 

Appendix B
2004 Capitalized Software Costs By Projects
             
Project #   Product Mapping   Version   Total
169149
   Data & Content   Millennium   *
138599
   Data & Content   Millennium   *
145723
   Data & Content   Millennium   *
141547
   Data & Content   Millennium   *
145720
   Data & Content   Millennium   *
145717
   Data & Content   Millennium   *
138604
   Data & Content   Millennium   *
131606
   Data & Content   Millennium   *
138602
   Data & Content   Millennium   *
145718
   Data & Content   Millennium   *
149289
   Data & Content   Millennium   *
133213
   Data & Content   Millennium   *
145726
   Data & Content   Millennium   *
138601
   Data & Content   Millennium   *
146187
   Data & Content   Millennium   *
147088
   Data & Content   Millennium   *
135587
   Data & Content   Millennium   *
133239
   Data & Content   Millennium   *
112238
   Data & Content   Millennium   *
153213
   Data & Content   Millennium   *
143287
   Data & Content   Millennium   *
141851
   Data & Content   Millennium   *
140584
   Data & Content   Millennium   *
99999999G
   Data & Content   Millennium   *
 
   Data & Content Total       *
121303
   FirstNet   Millennium   *
138597
   FirstNet   Millennium   *
112605
   FirstNet   Millennium   *
140680
   FirstNet   Millennium   *
 
   FirstNet Total       *
137142
   HNA Objects   Millennium   *
141409
   HNA Objects   Millennium   *
141223
   HNA Objects   Millennium   *
 
   HNA Objects Total       *
160358
   IQHealth   Millennium   *
112125
   IQHealth   Millennium   *
143573
   IQHealth   Millennium   *
153027
   IQHealth   Millennium   *
140861
   IQHealth   Millennium   *
 
   IQHealth Total       *
138627
   OMF   Millennium   *
135618
   OMF   Millennium   *
160585
   OMF   Millennium   *
140862
   OMF   Millennium   *
 
   OMF Total       *
100905
   Other Products   Millennium   *
153046
   Other Products   Millennium   *
138740
   Other Products   Millennium   *
135776
   Other Products   Millennium   *
154311
   Other Products   Millennium   *
155586
   Other Products   Millennium   *
99999999H
   Other Products   Millennium   *
 
   Other Products Total       *
153032
   PathNet   Millennium   *
 
*   Confidential information has been omitted and filed separately with the Commission.

 

 

Appendix B
2004 Capitalized Software Costs By Projects
             
Project #   Product Mapping   Version   Total
153007
   PathNet   Millennium   *
142011
   PathNet   Millennium   *
135990
   PathNet   Millennium   *
116155
   PathNet   Millennium   *
135578
   PathNet   Millennium   *
166474
   PathNet   Millennium   *
138613
   PathNet   Millennium   *
135628
   PathNet   Millennium   *
101583
   PathNet   Millennium   *
138621
   PathNet   Millennium   *
138612
   PathNet   Millennium   *
135634
   PathNet   Millennium   *
135620
   PathNet   Millennium   *
138619
   PathNet   Millennium   *
138617
   PathNet   Millennium   *
135612
   PathNet   Millennium   *
135683
   PathNet   Millennium   *
135717
   PathNet   Millennium   *
103126
   PathNet   Millennium   *
126403
   PathNet   Millennium   *
101887
   PathNet   Millennium   *
101556
   PathNet   Millennium   *
138618
   PathNet   Millennium   *
135722
   PathNet   Millennium   *
140911
   PathNet   Millennium   *
101581
   PathNet   Millennium   *
138605
   PathNet   Millennium   *
101493
   PathNet   Millennium   *
158911
   PathNet   Millennium   *
157036
   PathNet   Millennium   *
140983
   PathNet   Millennium   *
138611
   PathNet   Millennium   *
138607
   PathNet   Millennium   *
141226
   PathNet   Millennium   *
141228
   PathNet   Millennium   *
168495
   PathNet   Millennium   *
109198
   PathNet   Millennium   *
100709
   PathNet   Millennium   *
101735
   PathNet   Millennium   *
159839
   PathNet   Millennium   *
99999999I
   PathNet   Millennium   *
 
   PathNet Total       *
114641
   PharmNet   Millennium   *
138651
   PharmNet   Millennium   *
160587
   PharmNet   Millennium   *
166291
   PharmNet   Millennium   *
102446
   PharmNet   Millennium   *
164227
   PharmNet   Millennium   *
164058
   PharmNet   Millennium   *
138198
   PharmNet   Millennium   *
135682
   PharmNet   Millennium   *
164228
   PharmNet   Millennium   *
138650
   PharmNet   Millennium   *
140685
   PharmNet   Millennium   *
 
*   Confidential information has been omitted and filed separately with the Commission.

 

 

Appendix B
2004 Capitalized Software Costs By Projects
             
Project #   Product Mapping   Version   Total
135586
   PharmNet   Millennium   *
140687
   PharmNet   Millennium   *
164019
   PharmNet   Millennium   *
99999999J
   PharmNet   Millennium   *
 
   PharmNet Total       *
141431
   Powerchart Office   Millennium   *
138722
   Powerchart Office   Millennium   *
141471
   Powerchart Office   Millennium   *
138723
   Powerchart Office   Millennium   *
140851
   Powerchart Office   Millennium   *
 
   Powerchart Office Total       *
140681
   ProCall   Millennium   *
 
   ProCall Total       *
153014
   ProFile   Millennium   *
153039
   ProFile   Millennium   *
151755
   ProFile   Millennium   *
140683
   ProFile   Millennium   *
151754
   ProFile   Millennium   *
138598
   ProFile   Millennium   *
140866
   ProFile   Millennium   *
 
   ProFile Total       *
117828
   ProFit   Millennium   *
138625
   ProFit   Millennium   *
134435
   ProFit   Millennium   *
169824
   ProFit   Millennium   *
163940
   ProFit   Millennium   *
141224
   ProFit   Millennium   *
138643
   ProFit   Millennium   *
138644
   ProFit   Millennium   *
111476
   ProFit   Millennium   *
141225
   ProFit   Millennium   *
99999999K
   ProFit   Millennium   *
 
   ProFit Total       *
153042
   RadNet   Millennium   *
133064
   RadNet   Millennium   *
102773
   RadNet   Millennium   *
141973
   RadNet   Millennium   *
168496
   RadNet   Millennium   *
138724
   RadNet   Millennium   *
138725
   RadNet   Millennium   *
135926
   RadNet   Millennium   *
140483
   RadNet   Millennium   *
140679
   RadNet   Millennium   *
140484
   RadNet   Millennium   *
159153
   RadNet   Millennium   *
99999999L
   RadNet   Millennium   *
 
   RadNet Total       *
138623
   Resource Management   Millennium   *
141724
   Resource Management   Millennium   *
 
   Resource Management Total       *
128220
   SurgiNet   Millennium   *
170565
   SurgiNet   Millennium   *
170567
   SurgiNet   Millennium   *
153045
   SurgiNet   Millennium   *
 
*   Confidential information has been omitted and filed separately with the Commission.

 

 

Appendix B
2004 Capitalized Software Costs By Projects
             
Project #   Product Mapping   Version   Total
140586
   SurgiNet   Millennium   *
138737
   SurgiNet   Millennium   *
135797
   SurgiNet   Millennium   *
103160
   SurgiNet   Millennium   *
99999999M
   SurgiNet   Millennium   *
 
   SurgiNet Total       *
167320
   BNT   BNT   *
167317
   BNT   BNT   *
166054
   BNT   BNT   *
99999999A
   BNT   BNT   *
 
   BNT Total       *
146437
   INTL   Global   *
162166
   INTL   Global   *
162129
   INTL   Global   *
159801
   INTL   Global   *
162041
   INTL   Global   *
162167
   INTL   Global   *
159805
   INTL   Global   *
162160
   INTL   Global   *
162163
   INTL   Global   *
159807
   INTL   Global   *
159798
   INTL   Global   *
162159
   INTL   Global   *
162161
   INTL   Global   *
159814
   INTL   Global   *
159799
   INTL   Global   *
159806
   INTL   Global   *
159808
   INTL   Global   *
139138
   INTL   Global   *
162158
   INTL   Global   *
140858
   INTL   Global   *
162087
   INTL   Global   *
162104
   INTL   Global   *
99999999B
   INTL   Global   *
 
   INTL Total       *
135894
   Multum   Multum   *
135898
   Multum   Multum   *
135895
   Multum   Multum   *
143086
   Multum   Multum   *
118319
   Multum   Multum   *
135896
   Multum   Multum   *
135892
   Multum   Multum   *
135899
   Multum   Multum   *
143083
   Multum   Multum   *
138129
   Multum   Multum   *
143085
   Multum   Multum   *
143084
   Multum   Multum   *
138131
   Multum   Multum   *
144168
   Multum   Multum   *
135897
   Multum   Multum   *
138130
   Multum   Multum   *
99999999C
   Multum   Multum   *
 
   Multum Total       *
136122
   Other   Citation   *
 
*   Confidential information has been omitted and filed separately with the Commission.

 

 

Appendix B
2004 Capitalized Software Costs By Projects
             
Project #   Product Mapping   Version   Total
141368
   Other   Citation   *
136117
   Other   Citation   *
136125
   Other   Citation   *
136126
   Other   Citation   *
145664
   Other   Citation   *
163908
   Other   Citation   *
136129
   Other   Citation   *
167076
   Other   Citation   *
160630
   Other   Citation   *
160189
   Other   DHT   *
159904
   Other   DHT   *
160279
   Other   DHT   *
160200
   Other   DHT   *
159880
   Other   DHT   *
151090
   Other   DHT   *
151089
   Other   DHT   *
99999999
   Other   Other   *
 
   Other Total       *
 
   Grand Total       *
 
*   Confidential information has been omitted and filed separately with the Commission.

 

 

Appendix B
2003 Capitalized Software Costs By Projects
             
Project #   Product Mapping   Version   Total
135774   Access Management   Millennium   *
138592   Access Management   Millennium   *
138596   Access Management   Millennium   *
140854   Access Management   Millennium   *
140855   Access Management   Millennium   *
140856   Access Management   Millennium   *
140857   Access Management   Millennium   *
145217   Access Management   Millennium   *
160182   Access Management   Millennium   *
167440   Access Management   Millennium   *
167441   Access Management   Millennium   *
    Access Management Total       *
100924   CareNet   Millennium   *
102200   CareNet   Millennium   *
114367   CareNet   Millennium   *
138646   CareNet   Millennium   *
138647   CareNet   Millennium   *
138648   CareNet   Millennium   *
140684   CareNet   Millennium   *
140688   CareNet   Millennium   *
140859   CareNet   Millennium   *
141216   CareNet   Millennium   *
141533   CareNet   Millennium   *
141612   CareNet   Millennium   *
151525   CareNet   Millennium   *
153035   CareNet   Millennium   *
153037   CareNet   Millennium   *
    CareNet Total       *
101826   Core Architecture   Millennium   *
102969   Core Architecture   Millennium   *
103135   Core Architecture   Millennium   *
103487   Core Architecture   Millennium   *
103927   Core Architecture   Millennium   *
104873   Core Architecture   Millennium   *
105815   Core Architecture   Millennium   *
105818   Core Architecture   Millennium   *
105819   Core Architecture   Millennium   *
105822   Core Architecture   Millennium   *
105823   Core Architecture   Millennium   *
108904   Core Architecture   Millennium   *
108909   Core Architecture   Millennium   *
111289   Core Architecture   Millennium   *
117433   Core Architecture   Millennium   *
120628   Core Architecture   Millennium   *
120891   Core Architecture   Millennium   *
120892   Core Architecture   Millennium   *
120893   Core Architecture   Millennium   *
126993   Core Architecture   Millennium   *
 
*   Confidential information has been omitted and filed separately with the Commission.

 

 

Appendix B
2003 Capitalized Software Costs By Projects
             
Project #   Product Mapping   Version   Total
129545   Core Architecture   Millennium   *
130409   Core Architecture   Millennium   *
131498   Core Architecture   Millennium   *
132900   Core Architecture   Millennium   *
132911   Core Architecture   Millennium   *
133082   Core Architecture   Millennium   *
133869   Core Architecture   Millennium   *
134862   Core Architecture   Millennium   *
134909   Core Architecture   Millennium   *
135577   Core Architecture   Millennium   *
135579   Core Architecture   Millennium   *
135581   Core Architecture   Millennium   *
135582   Core Architecture   Millennium   *
135584   Core Architecture   Millennium   *
135611   Core Architecture   Millennium   *
135681   Core Architecture   Millennium   *
135720   Core Architecture   Millennium   *
135721   Core Architecture   Millennium   *
135773   Core Architecture   Millennium   *
136439   Core Architecture   Millennium   *
136533   Core Architecture   Millennium   *
136593   Core Architecture   Millennium   *
137919   Core Architecture   Millennium   *
138355   Core Architecture   Millennium   *
138594   Core Architecture   Millennium   *
138595   Core Architecture   Millennium   *
138765   Core Architecture   Millennium   *
138811   Core Architecture   Millennium   *
139032   Core Architecture   Millennium   *
139115   Core Architecture   Millennium   *
139138   Core Architecture   Millennium   *
139651   Core Architecture   Millennium   *
139652   Core Architecture   Millennium   *
140852   Core Architecture   Millennium   *
140853   Core Architecture   Millennium   *
140858   Core Architecture   Millennium   *
140863   Core Architecture   Millennium   *
140865   Core Architecture   Millennium   *
141265   Core Architecture   Millennium   *
141415   Core Architecture   Millennium   *
141448   Core Architecture   Millennium   *
142048   Core Architecture   Millennium   *
143581   Core Architecture   Millennium   *
146437   Core Architecture   Millennium   *
147087   Core Architecture   Millennium   *
149292   Core Architecture   Millennium   *
149298   Core Architecture   Millennium   *
153006   Core Architecture   Millennium   *
 
*   Confidential information has been omitted and filed separately with the Commission.

 

 

Appendix B
2003 Capitalized Software Costs By Projects
             
Project #   Product Mapping   Version   Total
153008   Core Architecture   Millennium   *
153016   Core Architecture   Millennium   *
153017   Core Architecture   Millennium   *
153018   Core Architecture   Millennium   *
153019   Core Architecture   Millennium   *
153025   Core Architecture   Millennium   *
153026   Core Architecture   Millennium   *
153034   Core Architecture   Millennium   *
153038   Core Architecture   Millennium   *
153040   Core Architecture   Millennium   *
153604   Core Architecture   Millennium   *
154312   Core Architecture   Millennium   *
155984   Core Architecture   Millennium   *
156111   Core Architecture   Millennium   *
158219   Core Architecture   Millennium   *
158987   Core Architecture   Millennium   *
160586   Core Architecture   Millennium   *
160629   Core Architecture   Millennium   *
160856   Core Architecture   Millennium   *
160861   Core Architecture   Millennium   *
162312   Core Architecture   Millennium   *
99999999D   Core Architecture   Millennium   *
    Core Architecture Total       *
109537   CVNet   Millennium   *
134339   CVNet   Millennium   *
134354   CVNet   Millennium   *
135798   CVNet   Millennium   *
138739   CVNet   Millennium   *
140585   CVNet   Millennium   *
153010   CVNet   Millennium   *
    CVNet Total       *
108938   Data & Content   Millennium   *
112238   Data & Content   Millennium   *
113508   Data & Content   Millennium   *
113513   Data & Content   Millennium   *
114766   Data & Content   Millennium   *
117430   Data & Content   Millennium   *
130801   Data & Content   Millennium   *
131606   Data & Content   Millennium   *
133213   Data & Content   Millennium   *
133223   Data & Content   Millennium   *
133227   Data & Content   Millennium   *
133239   Data & Content   Millennium   *
135587   Data & Content   Millennium   *
138599   Data & Content   Millennium   *
138601   Data & Content   Millennium   *
138602   Data & Content   Millennium   *
138604   Data & Content   Millennium   *
 
*   Confidential information has been omitted and filed separately with the Commission.

 

 

Appendix B
2003 Capitalized Software Costs By Projects
             
Project #   Product Mapping   Version   Total
140584   Data & Content   Millennium   *
141547   Data & Content   Millennium   *
141851   Data & Content   Millennium   *
143287   Data & Content   Millennium   *
145717   Data & Content   Millennium   *
145718   Data & Content   Millennium   *
145720   Data & Content   Millennium   *
145723   Data & Content   Millennium   *
145726   Data & Content   Millennium   *
146187   Data & Content   Millennium   *
147088   Data & Content   Millennium   *
147537   Data & Content   Millennium   *
149289   Data & Content   Millennium   *
153213   Data & Content   Millennium   *
157249   Data & Content   Millennium   *
    Data & Content Total       *
112605   FirstNet   Millennium   *
121303   FirstNet   Millennium   *
132847   FirstNet   Millennium   *
135650   FirstNet   Millennium   *
138597   FirstNet   Millennium   *
140680   FirstNet   Millennium   *
141728   FirstNet   Millennium   *
144027   FirstNet   Millennium   *
153023   FirstNet   Millennium   *
    FirstNet Total       *
137142   HNA Objects   Millennium   *
141223   HNA Objects   Millennium   *
141409   HNA Objects   Millennium   *
153030   HNA Objects   Millennium   *
    HNA Objects Total       *
104875   IQHealth   Millennium   *
112125   IQHealth   Millennium   *
135583   IQHealth   Millennium   *
140861   IQHealth   Millennium   *
143573   IQHealth   Millennium   *
153027   IQHealth   Millennium   *
160358   IQHealth   Millennium   *
    IQHealth Total       *
135614   OMF   Millennium   *
135618   OMF   Millennium   *
138627   OMF   Millennium   *
138642   OMF   Millennium   *
140862   OMF   Millennium   *
153029   OMF   Millennium   *
160585   OMF   Millennium   *
    OMF Total       *
100594   Other Products   Millennium   *
 
*   Confidential information has been omitted and filed separately with the Commission.

 

 

Appendix B
2003 Capitalized Software Costs By Projects
             
Project #   Product Mapping   Version   Total
100905   Other Products   Millennium   *
133552   Other Products   Millennium   *
135776   Other Products   Millennium   *
138149   Other Products   Millennium   *
138740   Other Products   Millennium   *
138763   Other Products   Millennium   *
138766   Other Products   Millennium   *
153024   Other Products   Millennium   *
153028   Other Products   Millennium   *
153046   Other Products   Millennium   *
153047   Other Products   Millennium   *
154311   Other Products   Millennium   *
155586   Other Products   Millennium   *
99999999E   Other Products   Millennium   *
    Other Products Total       *
100709   PathNet   Millennium   *
101493   PathNet   Millennium   *
101556   PathNet   Millennium   *
101581   PathNet   Millennium   *
101583   PathNet   Millennium   *
101735   PathNet   Millennium   *
101887   PathNet   Millennium   *
102995   PathNet   Millennium   *
103126   PathNet   Millennium   *
109198   PathNet   Millennium   *
116155   PathNet   Millennium   *
118236   PathNet   Millennium   *
126403   PathNet   Millennium   *
133069   PathNet   Millennium   *
135578   PathNet   Millennium   *
135612   PathNet   Millennium   *
135620   PathNet   Millennium   *
135628   PathNet   Millennium   *
135634   PathNet   Millennium   *
135683   PathNet   Millennium   *
135717   PathNet   Millennium   *
135722   PathNet   Millennium   *
135990   PathNet   Millennium   *
138605   PathNet   Millennium   *
138607   PathNet   Millennium   *
138611   PathNet   Millennium   *
138612   PathNet   Millennium   *
138613   PathNet   Millennium   *
138615   PathNet   Millennium   *
138617   PathNet   Millennium   *
138618   PathNet   Millennium   *
138619   PathNet   Millennium   *
138621   PathNet   Millennium   *
 
*   Confidential information has been omitted and filed separately with the Commission.

 

 

Appendix B
2003 Capitalized Software Costs By Projects
             
Project #   Product Mapping   Version   Total
140911   PathNet   Millennium   *
140983   PathNet   Millennium   *
141226   PathNet   Millennium   *
141227   PathNet   Millennium   *
141228   PathNet   Millennium   *
142011   PathNet   Millennium   *
153007   PathNet   Millennium   *
153032   PathNet   Millennium   *
159839   PathNet   Millennium   *
    PathNet Total       *
102446   PharmNet   Millennium   *
114641   PharmNet   Millennium   *
132910   PharmNet   Millennium   *
135586   PharmNet   Millennium   *
135682   PharmNet   Millennium   *
138198   PharmNet   Millennium   *
138650   PharmNet   Millennium   *
138651   PharmNet   Millennium   *
140685   PharmNet   Millennium   *
140687   PharmNet   Millennium   *
153036   PharmNet   Millennium   *
160587   PharmNet   Millennium   *
164019   PharmNet   Millennium   *
164227   PharmNet   Millennium   *
164228   PharmNet   Millennium   *
    PharmNet Total       *
138722   Powerchart Office   Millennium   *
138723   Powerchart Office   Millennium   *
138738   Powerchart Office   Millennium   *
140631   Powerchart Office   Millennium   *
140851   Powerchart Office   Millennium   *
141431   Powerchart Office   Millennium   *
141471   Powerchart Office   Millennium   *
    Powerchart Office Total       *
138600   ProCall   Millennium   *
140681   ProCall   Millennium   *
153048   ProCall   Millennium   *
157250   ProCall   Millennium   *
    ProCall Total       *
135580   ProFile   Millennium   *
135702   ProFile   Millennium   *
138598   ProFile   Millennium   *
140683   ProFile   Millennium   *
140866   ProFile   Millennium   *
151754   ProFile   Millennium   *
151755   ProFile   Millennium   *
153014   ProFile   Millennium   *
153039   ProFile   Millennium   *
 
*   Confidential information has been omitted and filed separately with the Commission.

 

 

Appendix B
2003 Capitalized Software Costs By Projects
             
Project #   Product Mapping   Version   Total
    ProFile Total       *
111476   ProFit   Millennium   *
117828   ProFit   Millennium   *
135594   ProFit   Millennium   *
138624   ProFit   Millennium   *
138625   ProFit   Millennium   *
138643   ProFit   Millennium   *
138644   ProFit   Millennium   *
141224   ProFit   Millennium   *
141225   ProFit   Millennium   *
153033   ProFit   Millennium   *
    ProFit Total       *
102773   RadNet   Millennium   *
118814   RadNet   Millennium   *
133064   RadNet   Millennium   *
135926   RadNet   Millennium   *
136842   RadNet   Millennium   *
138724   RadNet   Millennium   *
138725   RadNet   Millennium   *
140483   RadNet   Millennium   *
140484   RadNet   Millennium   *
140679   RadNet   Millennium   *
141973   RadNet   Millennium   *
153041   RadNet   Millennium   *
153042   RadNet   Millennium   *
159153   RadNet   Millennium   *
    RadNet Total       *
135670   Resource Management   Millennium   *
138623   Resource Management   Millennium   *
141724   Resource Management   Millennium   *
    Resource Management Total       *
103160   SurgiNet   Millennium   *
128220   SurgiNet   Millennium   *
133872   SurgiNet   Millennium   *
135797   SurgiNet   Millennium   *
138737   SurgiNet   Millennium   *
140586   SurgiNet   Millennium   *
140678   SurgiNet   Millennium   *
153045   SurgiNet   Millennium   *
    SurgiNet Total       *
127893   INTL   Global   *
135427   INTL   Global   *
139138   INTL   Global   *
140858   INTL   Global   *
146437   INTL   Global   *
153019   INTL   Global   *
153025   INTL   Global   *
159798   INTL   Global   *
 
*   Confidential information has been omitted and filed separately with the Commission.

 

 

Appendix B
2003 Capitalized Software Costs By Projects
             
Project #   Product Mapping   Version   Total
159799   INTL   Global   *
159805   INTL   Global   *
159806   INTL   Global   *
159807   INTL   Global   *
159808   INTL   Global   *
159811   INTL   Global   *
159814   INTL   Global   *
162041   INTL   Global   *
162087   INTL   Global   *
162104   INTL   Global   *
162128   INTL   Global   *
162129   INTL   Global   *
162130   INTL   Global   *
162158   INTL   Global   *
162159   INTL   Global   *
162160   INTL   Global   *
162161   INTL   Global   *
162163   INTL   Global   *
162166   INTL   Global   *
162167   INTL   Global   *
99999999C   INTL   Global   *
    INTL Total       *
118319   Multum   Multum   *
135892   Multum   Multum   *
135894   Multum   Multum   *
135895   Multum   Multum   *
135896   Multum   Multum   *
135897   Multum   Multum   *
135898   Multum   Multum   *
135899   Multum   Multum   *
138129   Multum   Multum   *
138130   Multum   Multum   *
138131   Multum   Multum   *
143083   Multum   Multum   *
143084   Multum   Multum   *
143085   Multum   Multum   *
143086   Multum   Multum   *
144168   Multum   Multum   *
99999999A   Multum   Multum   *
    Multum Total       *
135775   Other   Citation   *
136117   Other   Citation   *
136120   Other   Citation   *
136121   Other   Citation   *
136122   Other   Citation   *
136125   Other   Citation   *
136126   Other   Citation   *
136128   Other   Citation   *
 
*   Confidential information has been omitted and filed separately with the Commission.

 

 

Appendix B
2003 Capitalized Software Costs By Projects
             
Project #   Product Mapping   Version   Total
136129   Other   Citation   *
136179   Other   Citation   *
136550   Other   Citation   *
141368   Other   Citation   *
141371   Other   Citation   *
160630   Other   Citation   *
151089   Other   DHT   *
151090   Other   DHT   *
159880   Other   DHT   *
159882   Other   DHT   *
159904   Other   DHT   *
160189   Other   DHT   *
160200   Other   DHT   *
160279   Other   DHT   *
99999999   Other   Other   *
9999999B   Other   Other   *
    Other Total       *
    Grand Total       *
 
*   Confidential information has been omitted and filed separately with the Commission.

 

 

Appendix C
2003 To 2005 Enhancements
             
Software Release   Software Release        
Version   Date   Application   Description
2005.02
  May-2005   Superbill Orders (cpsSuperbill.dll)   The system recognizes the INSTITUTION_POLICY_MSG preference.
 
            
2004.M04.03.0
  Dec-2004   Address Control (Addrphone20.ocx)   Address Control (Addrphone20.ocx) has been enhanced to add PCT and DHA fields.
 
            
2004.M04.03.0
  Dec-2004   AgeFormatter   The AgeFormatter routines in SRVLocales, SRVCalendarLib, and SRVCalendar32 have been enhanced to allow for application control of how the age is returned. Specifically, the routines have been enhanced to allow for the display of major and minor units of age.
 
            
2004.M04.03.0
  Dec-2004   AgeFormatter   AgeFormatter has been corrected to change the default age display to years.
 
            
2005.02
  May-2005   Appreg (Appreg.exe)   AppReg can now handle dynamic redirect scripts.
 
            
2004.M04.02.0
  Oct-2004   AppSight   AppSight allows for advanced troubleshooting and debugging of Windows applications, which improves the Cerner support organization’s ability to diagnose issues. With the addition of AppSight logging from Millennium, the information now is contained in a single output file. This currently can be sent to Cerner along with a service request. This cumulative production package contains the components that are necessary to generate the AppSight log.
 
            
2005.02
  May-2005   CernServer   CernServer can now be configured to display a custom splash screen.
 
            
2005.01
  Feb-2005   CodeRTL (Codertl.exe)   CodeRTL no longer performs unnecessary locking of the global code cache.
 
            
2004.M04.02.0
  Oct-2004   CPM Script Server   The process for redirecting requests that are bound to the CPM Script service to the CPM Script Cache service has been enhanced. Rerouting now is dynamic and does not require a change to the definition in the Transaction database.
 
            
2004.M04.03.0
  Dec-2004   CPM Script Server
(cpm_srvscript) 		  Script Server has been enhanced to allow for large memory support.
 
            
2005.01
  Feb-2005   CreateCluster   CreateCluster has been enhanced to include the following functionality:
 
      (CreateCluster.exe)    
 
          - When creating the queue manager, you can now specify the size of the resulting log files when creating the queue manager.
 
            
 
          - When creating the queue manager, you can now specify the number of primary and secondary log files.
 
            
 
          - The “Use Channel Compression” option modifies the queue manager to use channel compression on its receiver channel. This script also copies the necessary images to the correct location and ensures that the permissions on the executable are set correctly.
 
            
 
          - The “Use Cluster Workload Balancing” option modifies the queue manager to use cluster workload balancing. This script also copies the necessary images to the correct location and ensures that the permissions on the executable are set correctly.
 
            
 
          - You can now specify the location of your MQ log files. Previously, the MQ log files would automatically stored in the MQ default directory.
 
            
2004.M04.03.0
  Dec-2004   CRMObjects   The crmobjects classes have been enhanced to check on the status of an asynchronous thread executing a transaction to a synchronous server.
 
            
2005.02
  May-2005   CRMRTL   Unnecessary SrvFieldExists calls were removed from CRMRTL.
 
            
2005.01
  Feb-2005   CRMTimers   Four obsolete timers were removed from the CRMTimer function.
 
            
2005.02
  May-2005   CTQMSG   The CTQMSG utility can now transfer messages to an alternate queue to allow inspection of the message contents and selective requeuing via QCPView.
 
            
2005.02
  May-2005   CTQMSG   The CTQMSG utility now will allow an upper limit on the number of messages to requeue or transfer during a single operation.
 
            
2005.02
  May-2005   CTQMSG   The CTQMSG utility now will detect and recover messages that are smaller than the size of an MQ transmit header structure (428 bytes).
 
            
2005.02
  May-2005   CTQMSG   The CTQMSG utility now checks the value of the Correlation ID in the message header structure when evaluating if a message in the transmission queue is eligible for recovery.
 
            
2005.02
  May-2005   Date and Time (Datetime.ocx)   The 2 digit year format used by Bloodbank is now supported by Datetime.ocx.
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Appendix C
2003 To 2005 Enhancements
             
Software Release   Software Release        
Version   Date   Application   Description
2005.01
  Feb-2005   Date and Time (DateTime.ocx)   The Date and Time component, DateTime.ocx, has been updated to allow quick time-entry formats, such as 0930, 1230, and 1659. Previously, if you used a time-entry format that did not require the use of a colon between the hour value and the minute value, 1234 for example, it was possible that the system would not accept this format.
 
            
2005.02
  May-2005   eBookings   Two new attributes, USERROLEPROFILE and PROXYROLEPROFILE, were added to the CRMREQINFO table. These fields allow you to record proxy transactions in eBookings.
 
            
2004.M04.03.0
  Dec-2004   EBS   An enhancement has been made to EBS allowing a patient to authenticate in the system without being present in the personnel table.
 
            
2005.01
  Feb-2005   Health Economy Architecture (HEA)   Cerner has created new Win32 components for Health Economy Architecture that allow Cerner Millennium applications, running on Citrix, to seamlessly launch other Citrix applications across different domains.
 
            
2005.01
  Feb-2005   Java 2 Platform, Enterprise
Edition (J2EE) 		  Cerner now takes advantage of the Java 2 Platform, Enterprise Edition (J2EE) container-based security in Cerner Web Experience. J2EE container-based security allows writing of security unaware applications and eliminates the complexity of handling the authentication and authorization in the application. This package contains JNI DLLs that are used by the Cerner Web components. This does not affect existing Cerner Win32 functionalities
 
            
2004.M04.03.0
  Dec-2004   Millennium Troubleshooter
Assistant 		  Cerner has released the Millennium Troubleshooter Assistant. This application includes integration with Identify Black Box, the capability to conveniently gather log files, and the ability to directly email Cerner Corporation.
 
            
2004.M04.03.0
  Dec-2004   NGMDump (ngmdump.exe)   Cerner has included the NGMDump diagnostic tool with its 2004.02 release. The NGMDump tool is used to analyze the global shared memory on backend nodes.
 
            
2005.01
  Feb-2005   Password Management   Cerner web application has been enhanced to display password expiration notifications and to provide a means for you to change your password. This package contains JNI DLLs that are used by the Cerner Web components. This does not affect existing Cerner Win32 functionalities.
 
            
2004.M04.03.0
  Dec-2004   Preference Manager (PreferenceManager.exe)   Preference Manager has been enhanced to include a new preference type. The Facility/Nurse Unit ID window will display a facility label and a combo box loaded with all the nursing facilities from the facility context.
 
            
2005.02
  May-2005   Preference Manager (PreferenceManager.exe)   In the Preference Manager tool you can now pass parameters to a Custom CCL script to filter or restrict the results of the script.
 
            
2004.M04.03.0
  Dec-2004   Print Services server (sys_srvprint.exe)   The Print Services server (sys_srvprint.exe) has been modified to correct an issue that resulted in the Print Server becoming unresponsive under certain circumstances on multimode systems.
 
            
 
          Multiple node systems that have the property ‘mulitnode = true’ set are at risk of entering a race condition when Print Servers from multiple nodes try to communicate with one another. The ‘multinode = true’ setting is used when the print directories are not shared by the nodes in the domain cluster. This is typically multiple node AIX sites that are running Cerner Millennium. This package corrects the issue by moving the node specific service to a different SCP entry.
 
            
2005.02
  May-2005   RRD   RRD now can fax 132 characters/line in reports.
 
            
2005.02
  May-2005   RRD   RRD now can auto-detect if .DAT files contain Postscript.
 
            
2005.02
  May-2005   RRD   RRD now will estimate transmission time for faxes, and base timeout values on this estimate.
 
            
2005.02
  May-2005   RRD   Enhancements to RRD agent’s handling of immediate retries were made to improve RRD agent’s performance.
 
            
2005.01
  Feb-2005   SCPView   SCP Server and SCPView now have the ability to stop, kill, and query a server based on process ID.
 
            
2004.M04.03.0
  Dec-2004   SLA Time Repository   The SLA Time Repository has been enhanced to reduce system overhead, eliminate the need to maintain and run sample transactions, and give a more realistic picture of end user response time. The improved Time Repository also maintains various performance statistics.
 
            
2005.01
  Feb-2005   SLA Timers   Configuration information is now centralized. Previously, the timer.cerner configuration file needed to be stored on each back-end node running the Repository Manager server as well as each front-end and mid-tier node that was to be monitored. The configuration file now is more centralized and only needs to be stored in the cer_mgr directory on each back-end node running Cerner Millennium core services.
 
            
2005.01
  Feb-2005   SLA Timers   You now can centrally log the CRM Function, CRM Perform, CRM Step and CRM AppInfo timers. These logs are controlled by settings within the timer.cerner file and are not enabled by default. These timers may currently be written to a comma-delimited CSV file or to the CRMTimerRepository.mlg file.
 
            
2005.01
  Feb-2005   SLA Timers   Support for running multiple instances of the repository manager on multiple nodes within the domain cluster has been added for VMS in addition to the existing AIX support.
 
            
2005.01
  Feb-2005   SLA Timers   The naming convention of the CSV files has been updated to include the back-end node name.
 
            
2005.01
  Feb-2005   SLA Timers   The following fields have been added to the record layout of the CSV file: client application name, client process ID, client application thread ID, user name, Citrix client node name, and Citrix client IP address.
 
            
2005.01
  Feb-2005   SLA Timers   The maximum file size of the CSV repository file now may be specified and multiple files now may be created.
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Appendix C
2003 To 2005 Enhancements
             
Software Release   Software Release        
Version   Date   Application   Description
2005.01
  Feb-2005   SLA Timers   Reporting now is more integrated into the solution and more easily supports multiple repositories on multiple nodes within the cluster.
 
            
2005.01
  Feb-2005   SRVCalendars API   SRVCalendars API has been enhanced to expose the rules involving Daylight Savings Time in time zones. This allows an application using this API to manually construct its own time zones, alleviating previous inconsistencies between applications that use older versions of JDK.
 
            
2004.M04.03.0
  Dec-2004   Srvcore and srvdata   Srvcore and srvdata have been enhanced to effectively support multiple processor functions.
 
            
2004.M04.03.0
  Dec-2004   SRVFrame   Cerner has improved SRVFrame to add context to messages that failed to process via the Process Server and will be added to the exception queue.
 
            
2005.02
  May-2005   SRVLDAP   SRVLDAP now allows CCL scripts to communicate with the LDAP server using the privileged account login information stored in the registry.
 
            
2005.02
  May-2005   Start Environment (start_environment.exe)   The Start_Environment process, which is used to start Cerner environments from within start_cerner_500, now allows you to override the startup size of the global code cache shared memory region.
 
            
2005.02
  May-2005   Start Environment (start_environment.exe)   The Start_Environment utility now checks for a flag to determine if it needs to create the discern cache memory region.
 
            
2005.02
  May-2005   Start Environment (start_environment.exe)   The Start_Environment utility now has the ability to start multiple environments simultaneously, to trigger the creation of multiple shared memory regions, and to run parallel population tasks.
 
            
2005.02
  May-2005   TaskAccess (TaskAccess.exe)   You can now choose whether to view application 5000 in TaskAccess.
 
            
2004.M04.03.0
  Dec-2004   Text Editor   Cerner has enhanced the TextEditor module to include spell checking capability.
 
            
2005.01
  Feb-2005   URL Signings   To accommodate PowerChart-related applications, the URL Signings functionality now will be exported through a traditional C-style interface, in addition to the existing COM-based interface
 
            
2005.02
  May-2005   AutoTester Administration (ATAdmin.exe)   You now can create usernames to control who can access AutoTester and AutoTester Administration. These usernames and passwords are separate from the Cerner Millennium username and password. You can allow users’ access to AutoTester and AutoTester Administration, and give users the ability to maintain users. You can also reset a user’s password in AutoTester Administration.
 
            
2005.02
  May-2005   AutoTester Administration (ATAdmin.exe)   You now can create multiple levels of categories. You can create folders and any number of sub-folders to use in organizing automated test plans in AutoTester.
 
            
2005.02
  May-2005   AutoTester Administration   When you export AutoTester data from a domain, you now can select which types of data are exported. You can select to export the following content:
 
      (ATAdmin.exe)     * Reference content, which is the standard content that Cerner supplies, including actions, applications, Cerner test plan categories, and
     Cerner plans
  * Client content, which includes AutoTester users and devices for the domain
  * Domain content, which includes the test plans, categories, and Cerner Millennium users for the domain
You always must export reference content, and can select also to export client content, domain content, or both.
 
            
2004.M04.03.0
  Dec-2004   eMAR (pvMAR.dll)   A new override preference, CPOCEnforcement, now allows you to manage medication tasks and documentation while preventing you from completing pending medication tasks.
 
            
2004.M04.03.0
  Dec-2004   eMAR (pvMAR.dll)   You now can modify which ingredients are included in an IV charting event.
 
            
2004.M04.03.0
  Dec-2004   eMAR (pvMAR.dll)   You now can change the order details of ingredients in the IV Charting window.
 
            
2005.02
  May-2005   Medication Administration Record (pvMAR.dll)   If you enter an early or late reason, the Result Details window now displays it.
 
            
2005.02
  May-2005   Medication Administration Record (pvMAR.dll)   The printed MAR now contains a patient record section that includes a history of all medications and IV fluids given to an individual patient when using the MAR. The printed record identifies the relationship between medication and IV orders, the actions taken on each order, and the results associated with each order action.
 
            
2005.02
  May-2005   Medication Administration Wizard (pvDocMgmt1.dll)   For an order that contains an orderable that is set to trigger a Discern alert, when you have the MED_ADMIN_DISCERN_ALERT set to enable alerts and you attempt to chart an administration task for the order using the Medication Administration Wizard (MAW), the system displays the Discern Support dialog box.
 
            
2004.01
  Mar-2004   BMDI Application Program
Interfaces 		  The bmdi_daqlib static library and the bmdi_daqutils dynamic link library have been enhanced to implement application program interfaces (APIs) based on an anesthesia record indicator.
 
            
2004.01
  Mar-2004   BMDI Manager   BMDI Manager now works for both the Local and Centralized models. BMDI Manager is a core component for accessing BMDI databases for use by user interface modules like INet. Among others features, the enhancements include faster searches for repeat queries, and enhancements for associating patients generating BMDI data.
 
            
2004.M04.01.0
  Aug-2004   Datex AS3 (DatexAS3.dll), Ohmeda Modulus (ModulusCD.dll), and Ohmeda 7800 (Ohm7800.dll)   The following interfaces have been enhanced for schema changes in support of the anesthesia record:
1. Datex AS3 (DatexAS3.dll)
2. Ohmeda Modulus (ModulusCD.dll)
3. Ohmeda 7800 (Ohm7800.dll)
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Appendix C
2003 To 2005 Enhancements
             
Software Release   Software Release        
Version   Date   Application   Description
2004.M04.02.0
  Oct-2004   Power Plan Tool (PlanMaintenanceTool.dll)   For a pre-built IV in a plan, you can build plan specific order sentences for the components of an IV.
 
            
2004.01
  Mar-2004   Power Plan Tool (PlanMaintenanceTool.dll)   For a pre-built IV in a plan, you can build plan specific order sentences for the components of an IV.
 
            
2004.01
  Mar-2004   Power Plan Tool (PlanMaintenanceTool.dll)   When you add an order sentence to an orderable in a plan, you can add and maintain an order sentence comment for each orderable.
 
            
2004.01
  Mar-2004   Power Plan Tool (PlanMaintenanceTool.dll) and Power Plans (pvOrderPOE.dll)   You can build Time Zero PowerPlans that have linked orders for oncology medication plans of care.
 
            
2004.01
  Mar-2004   Power Plans (pvOrderPOE.dll)   You can document outcome results and variance information against outcome results.
 
            
2004.01
  Mar-2004   Power Plans (pvOrderPOE.dll)   You can modify outcome criteria on Activated plans for numeric outcomes.
 
            
2004.01
  Mar-2004   Power Plans (pvOrderPOE.dll)   You can add outcomes to initiated plan phases.
 
            
2004.01
  Mar-2004   Power Plans (pvOrderPOE.dll)   You can view excluded components of initiated plans.
 
            
2005.02
  May-2005   PowerPlan Tool (PlanMaintenanceTool.dll)   You now can override the clinical category of an order component for a plan.
 
            
2005.02
  May-2005   PowerPlans   You now can associate a diagnosis to a PowerPlan phase or plan and the system propagates that diagnosis to all orders within the phase.
 
            
2005.02
  May-2005   PowerPlans   The system now handles correctly cycle number changes on plans that use cycles.
 
            
2005.02
  May-2005   PowerPlans   For plans that do not use cycles, the session does not permit you to add or modify cycles.
 
            
2005.02
  May-2005   PowerPlans   You now can select the Chemotherapy Review profile to view plan components marked as chemotherapy or chemotherapy-related. Components not marked as chemotherapy or chemotherapy-related are removed in the Chemotherapy Review profile.
 
            
2005.02
  May-2005   PowerPlans   When you sign a medication order in PowerOrders, the session captures the parameters involved in the dosage calculation and makes them available in the History tab; when you modify a medication order in PowerOrders after applying the dosage information and signing, the session does not capture the parameters involved in the dosage calculation
 
            
2005.02
  May-2005   PowerPlans   When you modify a medication order in PowerOrders after applying the dosage information and signing, the session does not capture the parameters involved in the dosage calculation and does not make them available in the History tab.
 
            
2005.02
  May-2005   PowerPlans   When you make changes to components of an active cross-phase group whose phase is Planned or Initiated Pending, the system now propagates those changes to identical orders of the group in all other phases of the plan.
 
            
2005.02
  May-2005   PowerPlans   PowerPlan orderables now acknowledge the filters functionality in PowerOrders.
 
            
2005.02
  May-2005   PowerPlans   Help for PowerPlans has been updated with the addition of numerous topics.
 
            
2005.02
  May-2005   PowerPlans   The Plan History tab now is displayed when the appropriate preference is set in Preferences Maintenance Tool.
 
            
2005.02
  May-2005   PowerPlans   Plan history information now is displayed for plan orders.
 
            
2005.02
  May-2005   PowerPlans   The Plan History tab displays modifications you made to dosages for IV orders within a plan before that plan was initiated.
 
            
2005.02
  May-2005   APACHE III (APACHE3.ocx)   Script enhancements now allow APACHE III to properly handle sequence numbers greater than 2,147,483,647.
 
            
2004.01
  Mar-2004   Batch Index Service (cdi_BatchIndexSvc.exe)
CDI — Batch Indexing (cer_BatchIndex.exe) 		  The applications support the submission of multiple page files.
 
            
2004.01
  Mar-2004   CDI — Batch Indexing (cer_BatchIndex.exe)
Document Library (pvw_axLib.ocx)
In-Process Viewer (pvw_axViewer.ocx) 		  You can add user-defined annotations to an image in the Batch Indexing and Document Library tools. Supported user-defined annotations include textual, drawing, and rubber stamp. The annotation toolbar displays in both the In-Process Viewer and Cerner Batch Indexing and can be hidden from view. You can view annotations in the In-Process Viewer and you can print them on the image from the Viewer or Clinical Reporting.
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Technological Feasibility Data Subset
                                 
                Technological            
Solution   Application   Description   Start Date   Feasibility Date   Finish Date   Release Date   Project Number
Nexus – Documentation (Structured Clinical Documentation)
  Common Doc Projects   Annotating UnAuthenticated Scanned Images (CDI). Enh Number 0108105   09/01/03   01/20/04   03/29/04   May 2005     153015  
Scheduling
  Scheduling   Execute Validation Test (ESM: Provider Selection Preference ITN 0114325 — SOLUTION_TEST Feature 47829). Enh Num 114325.   01/24/05   01/24/05   01/25/05   May 2005     140857  
Person Management
  Person Management   Execute Validation Test (ERM Additional Values in Legal Status ITN0110095). Enh Num 0106231.   02/10/05   02/10/05   02/11/05   May 2005     140856  
Nexus – Documentation (Structured Clinical Documentation)
  Common Doc Projects   Modifications within Clinical Notes. Enh Number 0108105.   01/14/05   01/28/05   02/22/05   May 2005     153015  
ProFile
  ProFile   Execute Validation Test (ERM Correction to Questionnaire. Enh # 0109753.   03/04/05   03/04/05   03/04/05   May 2005     140866  
PathNet – HLA
  PathNet – HLA   PathNet Helix: CBO (December 2004). Enh # 0111861.   01/17/05   01/18/05   03/10/05   May 2005     103126  
Clinical Event Server (Nexus — Results)
  NEXUS RAR   Return organization_id in the event query. Enh # 0115537.   03/09/05   03/09/05   03/14/05   May 2005     154312  
Nexus – Documentation (Structured Clinical Documentation)
  Common Doc Projects   DC: Conditional Field Logic. Enh Number 0108105.   06/24/04   07/12/04   03/18/05   May 2005     153015  
Nexus – DocWorks
  Common Doc Projects   PRSNL Resubmit during Document Modification. Enh Num 0108963.   01/24/05   02/07/05   03/22/05   May 2005     153015  
Nexus – Documentation (Structured Clinical Documentation)
  Common Doc Projects   CCL Script Performance Tuning. Enh Number 0108105.   12/23/04   01/04/05   03/24/05   May 2005     153015  
ProFile
  ProFile   Execute Validation Test (Profile Upgrade to Problem List ITN). Enh Num 0114372.   03/18/05   03/18/05   03/28/05   May 2005     140866  
Nexus – Documentation (Structured Clinical Documentation)
  Common Doc Projects   Structured Modifications. Enh Number 0108105.   07/16/04   08/09/04   03/29/05   May 2005     153015  
Nexus – Documentation (Structured Clinical Documentation)
  Common Doc Projects   Documentation Tied to a Case ID. Enh Number 0108105.   02/08/05   02/22/05   03/30/05   May 2005     153015  
Bedside Care
  Discern Expert   BSC (0115083) : MedAdminWizard — Call Discern. Enh Num 0115083.   01/24/05   02/02/05   03/31/05   May 2005     10004424  
PathNet – Gen Lab
  PathNet GLB   PathNet GLB: Numeric accept does not default. Enh Number 0114822.   05/20/04   03/04/05   04/01/05   May 2005     101581  
PathNet – HLA
  PathNet HLA   PathNet HLA: Charting High/Low. Enh Number 0111861.   06/30/04   08/20/04   04/01/05   May 2005     103126  
ProFile
  ProFile   Execute Validation Test (Profile — HCC Medicode Encoder Enhancement — ITN 0105173). Enh Num 0105173   03/28/05   03/28/05   04/01/05   May 2005     140866  
Clinical Event Server (Nexus — Results)
  NEXUS RAR   CEM-Event Server Changes. Enh Num 0115534.   03/24/05   03/28/05   04/04/05   May 2005     154312  
Nexus – Documentation (Structured Clinical Documentation)
  Common Doc Projects   Phys Doc: Automatic Population of Note (Roadmap: Passive Result Include) 0108105.   01/08/04   07/30/04   04/05/05   May 2005     153015  
Clinical Event Server (Nexus — Results)
  NEXUS RAR   CEM Changes. Enh Num 1-340580781.   02/07/05   03/28/05   04/05/05   May 2005     154312  
PathNet – ePathLink
  PathNet ePL: Date Prompt, CMRN,Financial number assignment   PathNet ePL: Date Prompt, CMRN,Financial number assignment. Enh Num 0116074.   03/10/05   03/15/05   04/05/05   May 2005     101493  
Patient Privacy
  Privacy   Org Group relationships — Enhancements for Network Type. Enh Num 0116178   03/14/05   03/21/05   04/05/05   May 2005     160629  
Clinical Event Server (Nexus — Results)
  NEXUS RAR   ce_get_ppa_last_dt_tm execution reduction. Enh # 0115114   03/28/05   03/28/05   04/07/05   May 2005     154312  
Clinical Event Server (Nexus — Results)
  NEXUS RAR   Enhance bookmark query performance. Enh # 0115537   03/28/05   03/28/05   04/07/05   May 2005     154312  
Clinical Event Server (Nexus — Results)
  NEXUS RAR   Readme 3017 Performance Enhancements. Enh # 0115537   03/09/05   03/09/05   04/07/05   May 2005     154312  
Clinical Event Server (Nexus — Results)
  NEXUS RAR   HLA typing query precidence enhancement. Enh Num 0113912   02/03/05   03/29/05   04/08/05   May 2005     154312  
Discern
  OMF/PowerVision   OMF — Performance Adjustments. Enh Number 0114768.   02/21/05   02/21/05   04/08/05   May 2005     140584  
Discern
  OMF/PowerVision   OMF — Performance for ProCare Scripts. Enh Number 0115013.   01/31/05   02/21/05   04/08/05   May 2005     140584  
Discern
  OMF/PowerVision   OMF — Performance for Purge. Enh Number 0115013.   02/21/05   02/21/05   04/08/05   May 2005     140584  
Person Management
  Person Management   Execute Validation Test (ERM MBL ITN 0101328). Enh Num 0106231.   03/21/05   03/21/05   04/08/05   May 2005     140856  
Clinical Event Server (Nexus — Results)
  NEXUS RAR   Update variables holding sequence generated ID. Enh #0115533   03/28/05   03/28/05   04/11/05   May 2005     154312  
Clinical Event Server (Nexus — Results)
  NEXUS RAR   Template_order_id changes phase I. Enh #0115533   03/27/05   03/27/05   04/13/05   May 2005     154312  
PathNet – Gen Lab
  PathNet GLB   PathNet GLB: Instrument Queue clearing of accessions. Enh Number 0114822   12/30/2004   01/04/05   04/17/05   May 2005     101581  
PathNet PCS
  PathNet PCS   PathNet PCS: TAT Monitor view by SR hierarchy. Enh Num 0114821.   1/13/2005   01/26/05   04/17/05   May 2005     116155  
Clinical Event Server (Nexus — Results)
  NEXUS RAR   Corrections for Profile. Enh # 0115114   03/27/05   03/27/05   04/18/05   May 2005     154312  
ProFile
  ProFile   Execute Validation Test (Profile — Reporting ITN 0110371). Enh Num 0110371.   04/04/05   04/04/05   04/18/05   May 2005     140866  
PathNet — AP
  PathNet — AP   PathNet AP: Data Warehousing. ENH# 0113866   01/27/05   02/03/05   04/18/05   May 2005     100709  
PowerInsight
  PowerInsight Informatica components have been modified, allowing them to be installed at a client site using an automation tool.   OCM: Informatica Deployment Automation. Enh Number 0111080.   11/17/04   11/17/04   04/20/05   May 2005     142048  
Discern
  Discern Explorer   Discern Notify — Support HTML. Enh # 0116021.   03/28/05   04/14/05   04/20/05   May 2005     140584  
Clinical Event Server (Nexus — Results)
  NEXUS RAR   Mod to event set loader to retain codes. Enh # 0115534   03/28/05   03/28/05   04/21/05   May 2005     154312  
Discern
  Discern Expert   @ENCOUNTERID and @CLINICALEVENTID. Enhancement Num 0114971.   02/11/05   05/20/05   04/23/05   May 2005     140584  
PathNet – Microbiology
  PathNet MIC   PathNet MIC: Populate resource_cd to clin_event. Enh Number 0114820   12/14/2004   01/13/05   04/25/05   May 2005     101887  
Clinical Event Server (Nexus — Results)
  NEXUS RAR   RAR-0109994-Multicontributor documentation. Enh #0109994   04/25/05   04/25/05   04/25/05   May 2005     154312  
PathNet – Gen Lab
  PathNet GLB   PathNet GLB: Auto login by performed instrument. Enh Number 0114822.   2/7/2005   02/09/05   04/27/05   May 2005     101581  
PathNet SCS
  PathNet SCS   PathNet SCS: Download to robotics on dispatch. Enh Num 0114819.   12/14/2004   01/17/05   04/28/05   May 2005     101583  
PathNet – Microbiology
  PathNet MIC   PathNet MIC: Add custom filtering option to Reporting. Enh Num 0116134.   3/29/2005   03/29/05   05/04/05   May 2005     101887  
PathNet — AP
  PathNet — AP   PathNet AP: Add Prefix filters to Followup Tracking rpts.Enh Num 0113866.   1/31/2005   01/31/05   05/16/05   May 2005     100709  
PathNet – Microbiology
  PathNet MIC   PathNet MIC: Clinical validation enhancements.Enh Num 0115264.   1/19/2005   02/15/05   05/17/05   May 2005     101887  
Discern
  Discern Expert   Drug Class Ref Help Performance Enhancement.Enhancmnt Num 0115370   02/24/05   02/25/05   05/21/05   May 2005     140584  
Discern
  Discern Expert   MEDCHARTACTIVATE Expert Event. Enhancement Number 0115371.   02/11/05   02/25/05   05/21/05   May 2005     140584  
Discern
  Discern Explorer   Discern Help Updates. Enhancement Number 0115917   04/07/05   04/08/05   05/21/05   May 2005     140584  
Discern
  Discern Explorer   Discern Layout Builder — Advanced Options. Enh Number 0116021   02/11/05   05/16/05   05/21/05   May 2005     140584  
Discern
  Discern Explorer   Discern Server Startup Script Enhancements. Enh Number 0116335.   02/09/05   02/14/05   05/21/05   May 2005     140584  
Discern
  Discern Explorer   Discern UAR enhancements. Enhancement Number 0114199   01/21/05   02/14/05   05/21/05   May 2005     140584  
Discern
  Discern Explorer   ExplorerMenu UI Enhancements. Enh Number 0115917   02/11/05   03/18/05   05/21/05   May 2005     140584  
Discern
  Discern Explorer   Visual Explorer Enhancements and Corrections. Enh Number 0111907   02/11/05   05/16/05   05/21/05   May 2005     140584  
Discern
  Discern Expert   Discern Purge/Archive Changes. Enhancement Number 0114971   01/17/05   05/20/05   05/23/05   May 2005     140584  
Discern
  Discern Expert   Expert Downtime ReadMe Inactivation. Enhancement Number 0114971   02/11/05   05/20/05   05/23/05   May 2005     140584  
MDI
  MDI   MDI — ABS2000 Enhancement. Enh Num 0113876.   03/31/05   05/16/05   05/30/05   May 2005     149405  
CVNet
  STS   CVNet — Documentation Tied to a Case ID. Enh Num 0108475.   02/15/05   05/31/05   05/31/05   May 2005     140852  

 

 

Appendix E
2. (a)
                         
Contract                        
Element   Description   Contract Fee   Payment Terms   Timing of Delivery   Allocation of Arrangement Fee   Revenue Recognition Timing
Licensed Software,
and Web-Based
Learning Tools
  Non-exclusive, non-transferable perpetual license to use the licensed software in accordance with the terms of the agreement.   SW $*

WBT $*

$* 		  • $* paid upon *

• $* paid upon *

• $* paid July 1, 2006

• $* paid September 30, 2006

• $* paid December 31, 2006

 

Because these payments do not extend beyond one year, we have not discounted the resultant receivable pursuant to APB Opinion No. 21. 		  Delivered concurrently with contract execution.   F $* equals the combined Software, Web-Based Tools and Installation of allocated revenue which represents the residual amount after allocation to all other elements based on VSOE or objective reliable evidence of fair value.   The combined unit of accounting is recognized over the period starting with delivery of the software and ending at the completion of the installation using the percentage of completion method pursuant to SOP 81-1 using output milestones to measure percentage of completion. 30% of the amount is recognized upon delivery of the software and remaining 70% recognized upon completion of the installation services. These milestone recognition percentages are determined by measuring the average labor effort expended upon completion of the milestones for a sample of representative installation projects.
 
                        
 
                      Due to the insignificance of the amounts related to the Web-Based Tools, these amounts historically have been recognized upon delivery rather than over the installation period.
 
                        
 
                      All of the payments in this arrangement are date-based and are not tied to performance of any other elements. Had any portion of the payments been contingent upon the delivery of another element outside the scope of SOP 81-1, that portion of the fee would have been deferred pursuant to paragraph 14 of SOP 97-2 until the other element has been delivered.
 
                        
Installation
Services
  Initial Software installation.   $*   • *% payable upon *.   Installation services generally are completed within 90 days of delivery of the software.   Included with licensed software as one element under the residual method.   • See above under licensed software.
 
*   Confidential information has been omitted and filed separately with the Commission.

 

 

                         
Contract                        
Element   Description   Contract Fee   Payment Terms   Timing of Delivery   Allocation of Arrangement Fee   Revenue Recognition Timing
Software Support
(PCS)
  Monthly support consisting of telephonic support services and unspecified software upgrade rights. Client is required to be on support for initial 12 month period.   $* / month or $* for 12 month period   • Paid monthly; commencing six months after contract signing.   Over the period of support.   Because PCS does not start until 6 months after contract signing, there are 6 months of implied PCS included in the arrangement.

VSOE for licensed software support is determined based on the substantive annual renewal provision ($*) stated in the contract.

   PCS revenue is recognized ratably over the PCS period.
 
                  18 Months of PCS (12 contractual and 6 implied) = $* C    
 
                        
Implementation
Services
  Project implementation fees utilizing the standard Cerner Implementation Methodology. Estimated average project length 12 months.   $*   • $* upon *.

• 12 monthly payments in the amount of $* commencing July 1, 2006. 		  Project implementation services are provided over the implementation period (estimate of 15 months for this project)   $* B

We have established VSOE for hourly professional services rates as discussed further at response 2.d. These rates are applied to an estimate of the hours to complete the project to determine the total VSOE for implementation services. We have an established implementation methodology and a strong history of providing these services, which we believe allows us to make reasonably dependable estimates of the hours to complete the implementation project. 		  Implementation services revenue is recognized as the hours of service are performed.
 
                        
Subscriptions
  Executable content provided to client on a monthly subscription basis.

Typical subscription service agreements are three to five years in length. 		  $* / month

60 Month Term 		  Year 1 – *% at *; remaining *% monthly over last * months.

Year 2 – Annually on the anniversary date of contract execution 		  Content delivered on a monthly basis during the period of the subscription.   $* / month for 60 months equals a total fee of $* E

VSOE for subscription services is based on the substantive renewal provisions stated in the contract. At the end of the 60 month term, the customer may continue to renew the subscriptions for annual periods at the rate of $*/month. 		  Subscription revenue is recognized ratably over the term of the subscription period.

 

 

                         
Contract                        
Element   Description   Contract Fee   Payment Terms   Timing of Delivery   Allocation of Arrangement Fee   Revenue Recognition Timing
Hardware
  Computer equipment that may be purchased from Cerner or directly from a third party.   $*   *% upon *   Typically within 90 days of contract signing; longer for certain elements in multi-phase agreement   $* A

VSOE is determined based on prices charged in stand-alone sales. 		  Upon Delivery
 
                        
Sublicense
Software
  Third-party software that may be sublicensed from Cerner or directly from a third party.   $*   *% upon *   Typically within 90 days of contract signing. Some elements may be later in multi-phase agreements.   $* D

We have established VSOE for substantially all of our sublicense software. VSOE is determined based on prices charged in stand-alone sales. If no standalone sales occurred for a particular item, objective reliable evidence of fair value is determined by independent third party pricing for the particular item. 		  Upon Delivery
 
                        
Maintenance
(Hardware /Sublicensed Software)
  *Item not included in response 2(a) bundled fee summary as contract amounts represent fair market value option rather than a commitment by client to purchase maintenance services. The client had not elected to purchase maintenance at the date of contract signature and the revenue recognition allocation.   $* / year   Paid annually commencing upon the maintenance coverage period.   Over the period of maintenance.   $* per month commencing upon maintenance coverage period.

VSOE for maintenance is determined based on the substantive renewal provision stated in the contract. 		  Maintenance revenue is recognized ratably over the maintenance period.
 
*   Confidential information has been omitted and filed separately with the Commission.

 

 

Appendix F
Cerner Corporation
Schedule of Audit Differences
2004 and 2005
                                                         
                                            Projected    
    Q1 2004   Q2 2004   Q3 2004   Q4 2004   2004   2005   Q3 2005
Pre-tax net income
     23,412       23,940       24,823       35,745       107,920       128,000       36,149  
 
                                                        
To properly remove depreciation expense recorded in 2004 for a fixed asset which was disposed of in 2003
     142       142       142       142       568       (568 )     —  
 
                                                        
To properly reduce accrued commissions to account for commissions paid in November
     81       82       82       82       327       (327 )     —  
 
                                                        
To properly state accounts receivable as a result of our confirmation procedures (known error $69,000 extrapolated across the population)
                             (551 )     (551 )     551       —  
 
                                                        
To properly remove out of period accrued vacation adjustment
                     3,346               3,346       —       —  
 
                                                        
                 
Total adjustments
     223       224       3,570       (327 )     3,690       (344 )     —  
                 
 
                                                        
As a % of pre-tax income
     1.0 %     0.9 %     14.4 %     -0.9 %     3.4 %     -0.3 %     0.0 %
 
                                                        
Net income
     14,129       14,314       14,779       21,426       64,648       84,000       26,556  
 
                                                        
To properly remove depreciation expense recorded in 2004 for a fixed asset which was disposed of in 2003
     88       88       88       88       352       (352 )     —  
 
                                                        
To properly reduce accrued commissions to account for commissions paid in November
     50       50       51       51       202       (202 )     —  
 
                                                        
To properly state accounts receivable as a result of our confirmation procedures (known error $69,000 extrapolated across the population)
                             (341 )     (341 )     341       —  
 
                                                        
To properly remove out of period accrued vacation adjustment
                     2,076               2,076       —       —  
 
                                                        
To properly record tax benefit on Zynx sale
     4,812                               4,812       (4,812 )     (4,812 )
 
                                                        
To properly reverse tax expense which was recorded as an estimate on the sale of Zynx and then reversed in Q4 when client realized the sale would result in a tax loss
     1,197                       (1,197 )     —       —       —  
 
                                                        
                 
Total adjustments
     6,147       138       2,215       (1,399 )     7,101       (5,025 )     (4,812 )
                 
 
                                                        
As a % of net income
     43.5 %     1.0 %     15.0 %     -6.5 %     11.0 %     -6.0 %     -18.1 %

 

 

Appendix G
Impact of Tax Benefit on Sale of Zynx
(amounts in ‘000 except for EPS)
                                 
            Full Year             Full Year  
    Q1 2004     2004     Q3 2005     2005  
As Originally Reported:
                                
Income tax expense
     9,283       43,272       9,593       48,993  
Net Income
     14,129       64,648       26,556       86,251  
Basic EPS
     0.20       0.90       0.35       1.16  
Fully diluted EPS
     0.19       0.86       0.33       1.10  
 
                                
As Adjusted, if tax benefit would have been recorded in Q1 2004
                                
Income tax expense
     4,471       38,460       14,405       53,805  
Net Income
     18,941       69,460       21,744       81,439  
Basic EPS
     0.27       0.96       0.29       1.10  
Fully diluted EPS
     0.25       0.92       0.27       1.04  

 

 

Appendix H
Cumulative Comparison of Reported vs. Proforma Income Statement
if all Proposed Audit Adjustments were Booked
Exhibit H
                                                                                                                 
    Q104 As     Q104 As     Q204 As     Q204 As     Q304 As     Q304 As     Q404 As     Q404 As     YTD2004 As     YTD2004 As     Q305 As     Q305 As     YTD2005 As     YTD2005 As  
In thousands, except per share data   Reported     Adjusted     Reported     Adjusted     Reported     Adjusted     Reported     Adjusted     Reported     Adjusted     Reported     Adjusted     Reported     Adjusted  
Revenues:
                                                                                                                
System sales
     84,512       84,512       84,853       84,853       82,882       82,882       99,614       99,614       351,861       351,861       110,173       110,173       449,734       449,734  
Support, maintenance and services
     127,069       127,069       133,949       133,949       140,123       140,123       141,273       141,273       542,414       542,414       175,208       175,208       677,664       677,664  
Reimbursed travel
     7,146       7,146       9,588       9,588       8,062       8,062       7,285       7,285       32,081       32,081       9,241       9,241       33,387       33,387  
 
                                                                                    
 
                                                                                                                
Total revenues
     218,727       218,727       228,390       228,390       231,067       231,067       248,172       248,172       926,356       926,356       294,622       294,622       1,160,785       1,160,785  
 
                                                                                    
 
                                                                                                                
Costs and expenses:
                                                                                                                
Cost of revenues
     46,673       46,673       50,564       50,564       45,013       45,013       54,098       54,649       196,348       196,899       65,305       65,305       0       0  
Cost of system sales
                                                                                                     171,073       170,522  
Cost of support, maintenance and services
                                                                                                     50,226       50,226  
Cost of reimbursed travel
                                                                                                     33,387       33,387  
Sales and client service
     92,842       92,761       94,232       94,150       98,919       98,837       97,635       97,553       383,628       383,301       117,010       117,010       466,206       466,533  
Software development
     42,554       42,554       42,769       42,769       42,837       42,837       43,429       43,429       171,589       171,589       53,968       53,968       211,455       211,455  
General and administrative
     14,145       14,003       14,919       14,777       17,942       14,454       16,321       16,179       63,327       59,413       21,142       21,142       81,620       82,188  
Write off of in-process research and development
     0       0       0       0       0       0       0       0       0       0       0       0       6,382       6,382  
 
                                                                                    
 
                                                                                                                
Total costs and expenses
     196,214       195,991       202,484       202,260       204,711       201,141       211,483       211,810       814,892       811,202       257,425       257,425       1,020,349       1,020,693  
 
                                                                                    
 
                                                                                                                
Operating earnings
     22,513       22,736       25,906       26,130       26,356       29,926       36,689       36,362       111,464       115,154       37,197       37,197       140,436       140,092  
 
                                                                                                                
Other income (expense):
                                                                                                                
Interest expense, net
     (2,115 )     (2,115 )     (1,792 )     (1,792 )     (1,585 )     (1,585 )     (660 )     (660 )     (6,152 )     (6,152 )     (1,358 )     (1,358 )     (5,858 )     (5,858 )
Other income
     3,014       3,014       (174 )     (174 )     52       52       (284 )     (284 )     2,608       2,608       310       310       666       666  
 
                                                                                    
 
                                                                                                                
Total other income (expense), net
     899       899       (1,966 )     (1,966 )     (1,533 )     (1,533 )     (944 )     (944 )     (3,544 )     (3,544 )     (1,048 )     (1,048 )     (5,192 )     (5,192 )
 
                                                                                    
 
                                                                                                                
Earnings before income taxes
     23,412       23,635       23,940       24,164       24,823       28,393       35,745       35,418       107,920       111,610       36,149       36,149       135,244       134,900  
Income taxes
     (9,283 )     (3,359 )     (9,626 )     (9,712 )     (10,044 )     (11,399 )     (14,319 )     (15,391 )     (43,272 )     (39,861 )     (9,593 )     (14,405 )     (48,993 )     (53,674 )
 
                                                                                    
 
                                                                                                                
Net earnings
     14,129       20,276       14,314       14,452       14,779       16,994       21,426       20,027       64,648       71,749       26,556       21,744       86,251       81,226  
 
                                                                                    
 
                                                                                                                
Basic earnings per share
     0.20       0.28       0.20       0.20       0.20       0.23       0.30       0.28       0.90       0.99       0.35       0.29       1.16       1.10  
 
                                                                                                                
Basic weighted average shares outstanding
     71,322       71,322       72,088       72,088       72,506       72,506       72,174       72,174       72,174       72,174       75,778       75,778       74,144       74,144  
 
                                                                                                                
Diluted earnings per share
     0.19       0.27       0.19       0.19       0.20       0.23       0.29       0.27       0.86       0.95       0.33       0.27       1.10       1.04  
 
                                                                                                                
Diluted weighted average shares outstanding
     74,444       74,444       75,020       75,020       75,306       75,306       75,142       75,142       75,142       75,142       79,794       79,794       78,090       78,090