UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year end December 31, 1999
------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ________ to ________
Commission file number 0-15386
A. Full title of the plan and the address of the plan, if different
from that of the issuer named below:
Cerner Corporation Foundations Retirement Plan
2800 Rockcreek Parkway
Kansas City, MO 64117
B. Name of issuer of the securities held pursuant to the plan and
the address of its principal executive office:
<PAGE>
CERNER CORPORATION FOUNDATIONS
RETIREMENT PLAN
Financial Statements and Schedule
December 31, 1999 and 1998
(With Independent Auditors' Report Thereon)
<PAGE>
KPMG
1000 Walnut, Suite 1600
Kansas City, MO 64106
Independent Auditors' Report
The Board of Directors
Cerner Corporation:
We have audited the accompanying statements of net assets
available for participants of the Cerner Corporation
Foundations Retirement Plan as of December 31, 1999 and 1998
and the related statements of changes in net assets available
for participants for the years then ended. These financial
statements are the responsibility of the Plan's management.
Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the net assets
available for participants of the Cerner Corporation
Foundations Retirement Plan as of December 31, 1999 and 1998
and the changes in net assets available for participants for
the years then ended, in conformity with generally accepted
accounting principles.
Our audits were made for the purpose of forming an opinion on
the basic financial statements taken as a whole. The
supplementary schedules of assets held for investment
purposes and reportable transactions are presented for the
purpose of additional analysis and are not a required part of
the basic financial statements but are supplementary
information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The supplemental
schedules and fund information have been subjected to the
auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated
in all material respects in relation to the basic financial
statements taken as a whole.
KPMG LLP
June 9, 2000
<PAGE>
<TABLE>
CERNER CORPORATION FOUNDATIONS
RETIREMENT PLAN
Statements of Net Assets Available for Participants
December 31, 1999 and 1998
<CAPTION>
Assets 1999 1998
----------- -----------
<S> <C> <C>
Investments at fair value (note 6) $ 72,226,973 61,202,054
Cash 39,806 2,662
Contributions receivable:
Associates 502,178 369,547
Cerner Corporation 100,435 73,910
----------- -----------
Net assets available for participants $ 72,869,392 61,648,173
=========== ===========
</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
<TABLE>
CERNER CORPORATION FOUNDATIONS
RETIREMENT PLAN
Statements of Changes in Net Assets Available for Participants
Years ended December 31, 1999 and 1998
<CAPTION>
1999 1998
------------ ------------
<S> <C> <C>
Additions to net assets attributed to:
Net appreciation (depreciation) in fair
value of investments $ (1,771,273) 9,415,697
Interest and dividends 3,156,056 3,251,403
Employer contributions (note 2) 1,218,959 1,026,321
Associates contributions (note 2) 12,325,312 10,791,357
------------ ------------
Total additions 14,929,054 24,484,778
------------ ------------
Deductions from net assets attributed to:
Distributions to associates (note 3) (3,705,121) (3,854,255)
Investment expenses (2,714) (2,260)
------------ ------------
Total deductions (3,707,835) (3,856,515)
------------ ------------
Net increase 11,221,219 20,628,263
Beginning of year balance 61,648,173 41,019,910
------------ ------------
End of year balance $ 72,869,392 61,648,173
============ ============
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
CERNER CORPORATION FOUNDATIONS
RETIREMENT PLAN
Notes to Financial Statements
December 31, 1999 and 1998
(1) Summary of Significant Accounting Policies
General
The following brief description of the Cerner Corporation
Foundations Retirement Plan (the Plan) is provided for general
information purposes only. Participants should refer to the
Plan Agreement for more complete information.
The Plan was adopted by the Board of Directors of Cerner
Corporation (the Company or Employer) effective November 1,
1987. The Plan is administered by a third-party administrator.
All full-time associates of the Company are eligible for
participation in the Plan after attaining age eighteen.
Basis of Presentation
The accompanying financial statements have been prepared on the
accrual basis in conformity with generally accepted accounting
principles and present the Plan's net assets available for
participants and changes in those net assets.
Expenses
Substantially all costs and expenses incurred in administering
the Plan are paid by the Company. Expenses related to issuance
of loans to participants are charged to the participant
obtaining the loan.
Investments
The Plan's investments and earnings thereon are held in a bank
trust account. The fair values of investments are based
principally on quotations from national securities exchanges.
Purchases and sales of securities are recorded on a trade-date
basis.
Loans to Participants
At the discretion of the Company, loans may be made to
participants in an amount up to 50% of the participant's self-
directed funds balance. The loan period may not exceed ten
years and the interest rate is prime plus 1%.
Use of Estimates
The Plan utilizes a number of estimates and assumptions
relating to the reporting of assets and liabilities and the
disclosure of contingent assets and liabilities to prepare
these financial statements in conformity with generally
accepted accounting principles. Actual results could differ
from those estimates.
4 (Continued)
<PAGE>
CERNER CORPORATION FOUNDATIONS
RETIREMENT PLAN
Notes to Financial Statements
December 31, 1999 and 1998
(2) Contributions
Participating associates may elect to make pretax contributions
from 1% to 15% of their compensation to the Plan, subject to
annual limits imposed by the Internal Revenue Service.
Participants may direct contributions into nine different
investment funds. These funds include investments in the
Company common stock, the American Century Ultra Fund, the
American Century Growth Fund, the American Century Select Fund,
the American Century Balanced Fund, the American Century Value
Fund, the American Century International Growth Fund, the
American Century Stable Asset Fund, and the Charles B. Schwab
Personal Choice Account. The Company will make matching
contributions in an amount equal to 20% of the participant's
annual contribution, not to exceed the lesser of 2% of the
participant's compensation or $600 per participant. All Company
contributions are directed to Company common stock.
On June 1, 1999, American Century merged all assets from the
American Century Preservation Trust Fund into the American
Century Stable Assets Fund. The investment objective and fees
of the merged funds are identical.
(3) Distributions
Upon normal retirement, retirement for permanent disability, or
death, a participant is entitled to the full value of the
assets attributable to his or her contributions and Company
contributions made on his or her behalf. Upon termination for
any other reason, a participant is entitled to 100% of his or
her contributions and the vested portion of Company
contributions. Company contributions vest 20% after three years
of service and 20% for each additional year of service until a
participant is 100% vested upon completing seven years of
service. Forfeitures of nonvested contributions are allocated
to all Plan participants as of the Plan year-end on a pro rata
basis according to individual participant annual earnings.
Participants receive distributions of Company common stock in
shares of the Company's common stock, except that cash is
distributed for fractional shares. Participants may also elect
to receive cash for distributions with a value less than
$1,000. During the years ended December 31, 1999 and 1998,
46,925 and 79,572 shares of the Company's common stock,
respectively, were distributed to withdrawing participants.
Participants receive distributions from all other funds in
cash.
(4) Tax Status
The Plan received a favorable determination letter, dated
August 25, 1994, from the Internal Revenue Service confirming
the tax-exempt status of the Plan under Section 401(a) of the
Internal Revenue Code. The Company is not aware of any activity
or transactions that may adversely affect the qualified status
of the Plan.
5 (Continued)
<PAGE>
CERNER CORPORATION FOUNDATIONS
RETIREMENT PLAN
Notes to Financial Statements
December 31, 1999 and 1998
(5) Plan Participants
<TABLE>
The following summarizes the number of participants by fund as
of December 31:
<CAPTION>
1999 1998
----- -----
<S> <C> <C>
Company common stock 2,746 2,348
American Century Mutual Funds:
Ultra 1,837 1,553
Growth 1,543 1,298
Select 1,125 922
Balanced 639 584
Value 332 208
International Growth 363 198
Stable Asset 493 418
Charles B. Schwab Personal
Choice Account 33 18
===== =====
</TABLE>
Because associates may invest in more than one fund, the number
of associate participants above exceeds the total number of
associate participants.
(6) Investments
In September 1999, the American Institute of Certified Public
Accountants issued Statement of Position (SOP) 99-3, Accounting
for and Reporting of Certain Defined Contribution Plan
Investments and Other Disclosure Matters. SOP 99-3 simplifies
the disclosure for certain investments and is effective for
plan years ending after December 15, 1999. The Plan adopted SOP
99-3 during the Plan year ended December 31, 1999. Accordingly,
information previously required to be disclosed about
participant-directed fund investment programs is not presented
in the Plan's 1999 financial statements. The Plan's 1998
financial statements have been reclassified to conform to the
current year presentation.
<TABLE>
The following presents investments that represent 5% or more of
the Plan's net assets:
<CAPTION>
1999 1998
------------ ------------
<S> <C> <C>
Company common stock $ 29,762,204 34,139,126
American Century:
Ultra Fund 17,581,138 10,739,820
Growth Fund 11,431,439 7,102,584
Select Fund 6,349,799 4,354,084
Other 7,102,393 4,866,440
------------ ------------
$ 72,226,973 61,202,054
============ ============
</TABLE>
6 (Continued)
<PAGE>
CERNER CORPORATION FOUNDATIONS
RETIREMENT PLAN
Notes to Financial Statements
December 31, 1999 and 1998
<TABLE>
During 1999 and 1998, the Plan's investments (including gains
and losses on investments bought and sold, as well as held
during the year) appreciated (depreciated) in value as follows:
<CAPTION>
1999 1998
------------ ------------
<S> <C> <C>
Mutual funds $ 6,496,676 2,438,398
Common stock (8,267,949) 6,977,299
------------ ------------
$ (1,771,273) 9,415,697
============ ============
</TABLE>
(7) Nonparticipant-directed Investment
<TABLE>
As described in note 2, Company contributions are invested
exclusively in Company common stock. Information about the net
assets and significant components of the changes in net assets
relating to the nonparticipant-directed investment at December
31, 1999 and 1998 are as follows:
<CAPTION>
1999 1998
------------ ------------
<S>
Net assets available for participants - <C> <C>
Company common stock $ 30,043,055 34,327,903
============ ============
Changes in net assets available for participants:
Contributions $ 4,633,822 4,306,323
Dividends 2,219 2,458
Transfers in (out) 243,192 (88,582)
Net appreciation (depreciation) (8,267,949) 6,977,299
Distributions (896,132) (2,092,624)
------------ ------------
$ (4,284,848) 9,104,874
============ ============
</TABLE>
(8) Subsequent Event
The Plan was restated for the Plan year beginning January 1,
2000. The effect of the amendments were to increase the
Employer matching contributions, provide for a discretionary
Employer match, shorten the vesting schedule, and revise the
loan policy.
7 (Continued)
<PAGE>
CERNER CORPORATION FOUNDATIONS
RETIREMENT PLAN
Notes to Financial Statements
December 31, 1999 and 1998
(9) Transactions with Parties-in-interest
<TABLE>
Transactions with parties-in-interest during the years ended
December 31, 1999 and 1998 were as follows:
<CAPTION>
Description of
transaction Cost
------------------------------- -----------
<S> <C>
1999:
Purchased 298,982 shares of
Company common stock $ 5,102,832
===========
1998:
Purchased 197,531 shares of
Company common stock $ 4,640,928
===========
</TABLE>
8
<PAGE>
<TABLE>
Schedule 1
CERNER CORPORATION FOUNDATIONS
RETIREMENT PLAN
Item 27(a) - Schedule of Assets Held for Investment Purposes
December 31, 1999
<CAPTION>
Fair
Asset Description Cost Value
--------------------- ------------------------------------------------------- ------------- ----------
<S> <C> <C> <C>
Cerner Corporation 1,511,731 shares of common stock $ 20,145,780 29,762,204
American Century Ultra Investors Mutual Fund, 384,035 shares (1) 17,581,138
American Century Growth Investors Mutual Fund, 354,134 shares (1) 11,431,439
American Century Select Investors Mutual Fund, 120,535 shares (1) 6,349,799
American Century Balanced Investors Mutual Fund, 161,385 shares (1) 2,779,047
American Century Value Mutual Fund, 110,046 shares (1) 604,152
American Century International Growth Mutual Fund, 45,840 shares (1) 686,231
American Century Stable Asset Fund, 1,957,116 units of participation (1) 1,957,116
Charles B. Schwab Schwab Personal Choice Account, 599,770 shares (1) 599,770
Loans to participants Loans to participants (bearing interest from 7% to 10%) (1) 476,077
------------
$ 72,226,973
============
</TABLE>
(1) In accordance with instructions to the Form 5500, the Plan is no longer
required to disclose the cost component of participant directed investments.
See accompanying independent auditors' report
9
<PAGE>
<TABLE>
Schedule 2
CERNER CORPORATION FOUNDATIONS
RETIREMENT PLAN
Schedule of Reportable Transactions
Year ended December 31, 1999
<CAPTION>
Identity of party Description Purchase Selling Original Net gain
involved of asset price price cost (loss)
------------------ ------------ ---------- ------- --------- --------
<S> <S> <S> <C> <C> <C>
Cerner Corporation Common stock $ 5,102,832 -- 5,102,832 --
========== ======= ========== ========
</TABLE>
NOTES:
A reportable transaction is defined by the Department of Labor as:
. A single transaction in excess of 5% of the fair value of Plan assets.
. A series of transactions with or in conjunction with the same person,
involving property other than securities, which amounts in the
aggregate to more than 5% of the fair value of the Plan assets.
. A series of transactions with respect to securities of the same issue
which amounts in the aggregate to more than 5% of the fair value of the
total Plan assets.
. Any transaction with or in conjunction with a person if a prior or
subsequent single transaction has occurred with respect to securities
with or in conjunction with the same person in an amount in excess of
5% of the fair value of Plan assets.
A reportable transaction is identified by comparing the fair value of the
transaction at the transaction date with the fair value of the Plan assets
at the beginning of the year ended December 31, 1999.
See accompanying independent auditors' report.
10
<PAGE>
Independent Auditors' Consent
The Board of Directors
Cerner Corporation:
We consent to incorporation by reference in the registration statements (No.
33-56868, No. 33-55082, No. 33-41580, No. 33-39777, No. 33-39776, No. 33-20155,
and No. 33-15156) on Form S-8 of Cerner Corporation of our report, dated June 9,
2000, relating to the statements of net assets available for participants of
Cerner Corporation Foundations Retirement Plan as of December 31, 1999 and 1998,
and the related statements of changes in net assets available for participants
for the years then ended and the related supplemental schedules of assets held
for investment purposes and reportable transactions, which report is included
herein.
KPMG LLP
Kansas City, Missouri
June 28, 2000
<PAGE>
SIGNATURES
The Plan, pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
FOUNDATIONS RETIREMENT PLAN
Dated: 6/28/2000 By: \S\David M. Evans
--------------------- -------------------------
